Spotlight, our regular Q&A with clients and colleagues, highlights leading viewpoints on trending topics in the world of human resources.
Andrea De Ville
Associate Partner, Rewards Solutions
Director, Rewards Solutions
Associate Partner, Rewards Solutions
Partner, Rewards Solutions
An Era of Change: Transforming Our Compensation Data Platform
A new year brings with it both a new set of challenges and opportunities. The onset of the COVID-19 pandemic has pushed many longstanding issues — such as the cross-industry competition for key talent — to the forefront, emboldening us to accelerate updates to our data offerings to ensure they meet evolving client needs.
To examine this further, we recently interviewed four colleagues on our data transformation team – Andrea de Ville, Conrad Lee, Rachel Silverman and Tim Brown. In our conversation, we discussed how firms should rethink their approaches to compensation.
Our compensation surveys for various industries are becoming part of a new Radford Global Compensation Database. What exactly does this mean?
We have reinvented our offering, pivoting away from the traditional compensation survey to give our clients access to a global platform that provides comprehensive job coverage, while recognizing that each sector has unique needs. For the tech sector, these needs are underpinned by the dual management and professional individual contributor career tracks and detailed coverage of its engineering staff. For life sciences, this means recognizing the unique needs of precommercial and commercial organizations, as well as the PhD scientific career ladder. Beyond those two sectors, we have worked with numerous companies with diverse needs, from large tech to gaming and medical device companies, adding to our wide range of coverage. To meet the demands of an increasingly digital market where industry lines are continuing to blur, our new data platform enables clients to benchmark pay on demand for jobs by applying customizable industry, region, revenue, headcount and ownership filters. – Andrea de Ville
Is sector-specific compensation data important in today's market?
Companies today are vying for talent across sectors, with particularly keen competition for technology and digital skills. With an accelerated shift towards online transactions, companies understand that creating a positive digital experience is essential to positioning themselves for success. The pandemic has especially shined a light on this in the retail sector. Those retailers who invested in the proper talent to support a seamless digital experience for customers are thriving, while those that did not are either in decline or no longer exist. Organizations need skilled employees who can assess clients’ needs and deliver a compelling experience, coupled with strong management of costs to remain competitive. Benchmarking sector-specific data is a good start, but it is also important to understand pay across all industries for these key jobs in order to attract the right talent. – Rachel Silverman
How can firms benefit from integrating survey data into their executive compensation plans?
Successful organizations recognize the benefit of having an executive team that spans multiple industries. In the broad employee population, having diverse, cross-sector perspectives is often the key to most effectively honing and executing your business strategy. Executive compensation is no different. This reinforces the importance of expanding your executive benchmarking beyond your industry, as there are considerable variances in how executives are compensated per sector (e.g., pay mix, the use of deferred cash, perquisites). Additionally, operating models have become more dynamic in order to respond to and help manage the high degree of change that’s occurring, meaning that an executive’s responsibilities may not be easily pegged to a conventional role. In response, we updated our platform by adding more granularity to our jobs — both in terms of career level and job function. This gives users the opportunity to explore an array of relevant pay options. – Rachel Silverman
How does survey data help private companies compete for top talent and optimize compensation programs?
Private companies are disruptors and often thrive between traditional industries. The transformation of our data platform enables companies to access more specific benchmarks, regardless of industry designation, and compare how companies of all stages pay their employees — from the seed stage of a business all the way to the tech giants.
Industries continue to converge and candidate pools now reach well beyond the scope of tech and life sciences. The emergence of FinTech and HealthTech companies require hiring managers to expand their talent search from traditional industry roles. Therefore, having an updated database is critical for a converging world that continues to blur industry lines.
While understanding how a company pays against its peers is one part of the equation, recognizing the full competitive labor market is the only way to compete for top talent. Having the unique ability to depict this big picture view (from seed stage to big tech) ensures that private companies are well positioned to communicate compelling equity value propositions against the broader market. – Conrad Lee
What is one takeaway message you’d offer to rewards professionals thinking about the new year and decade ahead?
I’d encourage every rewards professional to remember that compensation surveys provide insight into what other companies are doing. They do not tell you what you must do, but rather, share an informed perspective for decision-making. It is important that you commit resources to maximize your return on investment. For example, merit increase budgets largely appear to be remaining at 3% for another year. One initial response to this is to offer every employee a raise of 2-4% since that is the common trend revealed in most surveys. But, if you think unconventionally, you can distribute the same amount of money differently by focusing resources on top performers, improving gender pay equity and boosting compensation for those performing effectively while being paid below market rate. Survey results suggest that there are many companies that have taken foundational steps to identify these audiences, but fewer have taken bold action to behave differently. And what better year than this to think outside of the box?
– Tim Brown
To learn more about the cutting-edge compensation data and insights you need for 2021 and beyond, please visit: https://aon.io/survey-2021.