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TalentTakeawayswebinar & podcast series
How To Use BigData For BetterCompensationBenchmarking
Guest Presenter: Cary SparrowFounder & CEO, Greenwich.HR
AGENDAThe Series
TalentTakeawayswebinar & podcast series
Talent Takeaways Series
AGENDAAGENDAThe Sponsor
Talent Takeaways Series
Talent Management Made for Managers
Compensation Planning Total RewardsStay Interviews
Introduction
Solutions that bring next-generation labor market intelligence to all audiences
Personal• CEO and Founder Greenwich.HR• VP (HR, IT) at Cargill, Inc.• Global Practice Leader at Towers Perrin
(now Willis Towers Watson)• Submarine Officer• Engineer and Geek Dad
Today’s Discussion
• Setting The Stage• How the growing array of powerful data options is impacting how
we need to approach pay benchmarking• A framework for segmenting talent markets based on economic
drivers• What’s Out There
• The current landscape for pay data, including trends, risks, and opportunities
• Getting The Most Value• Approaches to help you get the most value from new and more
powerful data (for the business and your comp team)
Understanding Pay Markets
Then(Focal Point)
Well-defined sources and processes (surveys and benchmarking)
Owned by Compensation Department
Highly manual
Now(Many Silos)
Explosion of ‘market data’ from online sources
Many stakeholders owning processes that control the supply and pay of talent
Still very manual
Future(Integrated)
A suite of data sources best suited to specific situations
Tighter collaboration across stakeholders
Stronger automation
Talent Markets With Distinct Economics• Talent At Rest – Current Employees
• Talent In Motion – Employees Changing Jobs (typically to a different company)
• Talent For Rent – Contract, Temporary, and Freelance workers
Based On A True Story• A large company was expanding operations into a new
country, requiring them to add about 300 positions locally• Key management and technical positions were sourced
from existing employees – pay, benefit, relocation decisions were based on existing policies
• All other positions were intended to be recruited locally and paid according to published market data
• 2-3 years ago, this would be the end of the discussion. And the company would have failed to launch its new business.
Based On A True StoryBUT In This Case….• Analysis of the local talent supply indicated the number of
recruiters with requisite skills employed in the market was 30, and this company needed to fill 7 recruiting positions
• The company adopted a more aggressive compensation approach for these positions
• To manage risk, they also engaged a local staffing company to fill interim talent and recruiting needs, expecting a more challenging talent situation than they originally planned
• The new site launched on time.
Talent At RestWho Are They: Current employees
Economics: Internal labor market; often very stable• Exceptions: Hot Skills, talent segments
experiencing high turnover, and countries with high wage inflation or key skills shortages
Typical Rewards Goals: Retention, Alignment
Data Sources: Compensation surveys and online databases usually administered through compensation departments• Large survey firms• Boutique survey shops specializing in
specific markets/industries• Associations• Online data sources (e.g., salary.com,
Payscale.com)
Strengths:• Robust analysis• Range of providers to fit budgets and
desired precisionLimitations:• Time delay between initial collection and
final outcomes• Administrative burden• Inconsistent sampling/precision• Limitations with lower-cost providers• Excess data in some countries (e.g., US),
but limited data in othersEmerging Trends:• Online data services are increasingly
marketing themselves for this segment• Use of Survey Aggregators (e.g.,
MarketPay)• Removing data complexity
Maximizing Value Of DataFor Talent At Rest
Main Themes1. Reduce Complexity
2. Leverage Power From New ’Talent In Motion’ Data
Simpler More Powerful Processes Simpler More Powerful Data Structures
Maximizing Value Of DataFor Talent At Rest
DeveloperMedian 105K
Developer – Full StackMedian 110K
Developer – BackendMedian 100K
Developer – FrontendMedian 102K
Job (75th-25th)/Median
△Median
Full Stack Developer
31.4% 4.5%
Backend Developer 38.0% 4.5%Frontend
Developer34.3% 2.9%
Developer 36.2% 0%
Reduce complexity of job pricing and the number of benchmark jobs
Source: Greenwich.HR
Maximizing Value Of DataFor Talent At Rest
Reduce Complexity In Job Pricing Through A Job Catalog
Job Catalog: A synchronized framework that defines a standard list of benchmark jobs that have been aligned to the company’s salary structure
Impact: - Significantly reduces the complexity of market pricing- Reduces complexity of systems administration and data maintenance- Serves as a framework for other talent management processes- Breaks down silos across the organization
Job CatalogJob CatalogJob CatalogJob Catalog
LevelingFramewor
kJob Family Taxonomy
Salary Structure
Job Catalog Fit
Position Requireme
nts
Market Data
Position Pricing and
Banding
Catalog Structure Position Pricing Process
Talent In MotionWho Are They: Employees changing jobs (typically by changing companies)
Economics: External labor market• More dynamic and subject to localized
supply/demand conditions• Has a built-in premium for switching cost
and in-demand experience
Typical Rewards Goals: Attraction
Data Sources: Online services that measure job posting data and online recruiting profile data
Emerging Trends:• Significant investment in data providers for
this segment
Typical Data Providers:• Burning Glass• CEB• Job BoardsStrengths:• Dynamic and real-time• Solutions geared for talent sourcing
requirements• Powerful business intelligence capabilitiesLimitations:• Market data is often ‘inferred’ from posting
data• Some providers use self-reported data from
individuals• Very limited predictive usefulness
Maximizing Value Of DataFor Talent In Motion
Source: Greenwich.HR
• Become familiar with the new strengths of online sources that can be applied more broadly (e.g., ability to show sensitivity of pay to skills, etc.)
• For any business situation, recognize the labor market that needs to be considered and choose the data source that best fits
• Strengthen partnerships with recruiting organizations and foster data transparency
Talent For RentWho Are They: Contractor, temporary, and freelance workers
Economics: External labor market for temporary talent• Very dynamic• Has premiums for administration and non-
employee status• Supply chain for talent can be very complex
Typical Rewards Goals: Control spending while maintaining access to critical skills
Data Sources: In general the data picture for this space is immature and highly fragmented
Emerging Trends:• Larger providers deliver market data based
on their own client base• Vendor Management System (VMS)
providers are beginning to develop their own data solutions
Typical Data Providers:• Large contract recruiting firms• Large temporary staffing firmsStrengths:• Larger providers are investing in their
data/analytics capabilitiesLimitations:• Very limited data sources• No standards – therefore many competing
views • Very limited matching precision• Very limited visibility – audience is typically
procurement manager or operations leader and is shared situationally
The Talent Economist• Compensation professionals in particular have the
opportunity to be the stewards of talent economics across the organization, e.g.,
• Building awareness of the ‘whole picture’ of the labor market
• Advising on the interplay of decisions for each market segment on near-term and longer-term business outcomes
• Integrating labor market data
• Fostering collaboration across talent process owners
• Demonstrating the power of an expanded set of tools
Recap• Bring perspective and use data more powerfully
across all three talent segments• Talent at Rest• Talent In Motion• Talent For Rent
• Become savvy accessing and appropriately using data for each of these segments
• Adjust data structures and processes to simplify administration
• Serve as the stewards for the ’whole picture’ and collaborate closely with other process owners
“Big Data” and Compensation Benchmarking
Cary SparrowFounder and CEOGreenwich.HR
Thank You
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