In a market where getting good talent for your fast growing company is difficult, compensation strategies matter! This slideshare will make it easy for you to know what's important in a compensation strategy.
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Comp Strategies for Fast Growing Companies
Rusty Lindquist
VP of HCM Thought Leadership
BambooHR
Mykkah Herner
Modern Compensation Evangelist
Payscale
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Comp Strategies for Fast Growing Companies
What we’ll talk about
1. Challenges and byproducts of rapid growth
2. Comp plans can help
3. Aligning across multiple locations
4. Three options for M&As
5. Things to do today
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Comp Strategies for Fast Growing Companies
Making the Compensation
Conversation a Culture Builder
Don’t be offended
Be open
Take it seriously Be objective
Be proactive
Be Positive
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Comp Strategies for Fast Growing Companies
Feeling appreciated, valued, and adequate rewarded for your effort.
Value
Total rewards
Va Value
Rewards Recognition Compensation
What you get from work
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Comp Strategies for Fast Growing Companies
Comp is about an
Exchange of Value
Not just Money
Experience in industry
Experience in market vertical
Experience in adjacent markets
Experience in field of discipline
Experience in adjacent disciplines
Experience with competitors
Product knowledge
Competitor knowledge
Time and experience in company
Education
Discipline training and certification
Supply and demand
Employer Value DriversEmployee Value Drivers
Base pay
Performance Pay
Paid time off
Benefits
Travel
Culture and environment
Work flexibility
Work/Life balance
Meaningful work
Who you work with
Challenging work
Opportunity to impact
Job security
Shared purpose / mission
Career advancement opportunities
Autonomy
Senior leadership
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Comp Strategies for Fast Growing Companies
Things to do today
1. Things to do today
2. Clarify alignment of business goals to talent strategy
3. Discover your talent markets
4. Prioritize pay decisions based on the above
5. Decide between pay ranges and pay grades
6. If merging, get to know both plans
7. Make a plan to develop a comprehensive comp plan
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Questions?
Rusty Lindquist
V P S T R A T E G I C H R I N S I G H T S
B A M B O O H R
@ r u s t y l i n d q u i s t
r u s t y @ b a m b o o h r . c o m
w w w . l i n k e d i n . c o m / i n / r u s t y l i n d q u i s t
Mykkah Herner
M O D E R N C O M P E V A N G E L I S T
P A Y S C A L E
@ m y k k a h _ h e r n e r
M y k k a h H @ p a y s c a l e . c o m
w w w . l i n k e d i n . c o m / i n / m y k k a h h e r n e r
Hinweis der Redaktion
Mykkah
When organizations get into a high growth phase, everything starts moving faster. Recruiting speeds up. Making sure that new hires have what they need to do their jobs (computer, software, access to internal networks, etc.) on day one becomes a challenge.
Compensation is another aspect that you must get right as you scale quickly. Neglecting to think about compensation planning can cost you top talent, slow down recruiting, and create internal inequities down the line. So how can you make sure you’re getting the comp equivalent of the right set-up as you grow?
Join PayScale for this webinar where you’ll learn:
How comp can help make hiring easier during high growth
Ways to pay fairly across multiple locations
3 options for your comp plan during a merger or acquisition
Both,
Why am I qualified to talk with you now and/or why am I so excited about growth
BHR
BHR
BHR
BHR
BHR
BHR
BHR
PAYSCALE
Let’s face it, comp is a huge part of the budget. A scalable comp plan that is well defined and communicated will not only make budgeting easier but it will attract top talent and retain valuable assets to your team.
PAYSCALE
Boat
What are you trying to accomplish as an organization
Where do you compete for talent
How competitive do you want to be in your various functional levels
What do you want to reward?
Not all can be 1st – some need to be second or third.
PAYSCALE
CASH is limited. Spend it in the right places
Biz Goal = 2x revenue
Biz Strategy = 1 new product per year
Talent Strategy = Engineer (innovators)
Comp Strategy = retain / reward top engineers & incentivize to innovate
PAYSCALE
Pay Ranges – smaller number of unique job titles
Pay Grades – bucketing a number of similar internal worth
Where will new employees enter ranges?
How will current employees move through ranges?
What happens when employees are promoted?
PAYSCALE
As the organization beings to grow, the number of new jobs will be quick to follow. If you currently have job based ranges, where each individual job has it’s own range ask yourself: Is that scalable, and can we continue to replicate this strategy as we expand?
If the answer is no, developing a grade structure will allow ease of administration during growth and allows adjustments for internal equity.
Also, to note:
-You can hire faster and feel confident with quick decisions knowing there are policies/boundaries in place
-You will find it easier to communicate and drive everyone in the right direction
PAYSCALE
Align your locations to one another so you know, without taking the time to calc with each hire, how different the locations are.
Bonus: you can message this to managers to they get on board with the rationale.
Based on cost of labor (demand) in those locations, not cost of living.
Note: Sales jobs and/or highly mobile jobs. Jobs above a certain level (either “national” or “HQ” or “highest”)
More about the challenges of aligning across locations in a minute.
Bamboo
Bamboo
Bamboo
Bamboo
Bamboo
PAYSCALE
Align your locations to one another so you know, without taking the time to calc with each hire, how different the locations are.
Bonus: you can message this to managers to they get on board with the rationale.
Based on cost of labor (demand) in those locations, not cost of living.
Note: Sales jobs and/or highly mobile jobs. Jobs above a certain level (either “national” or “HQ” or “highest”)
More about the challenges of aligning across locations in a minute.
PAYSCALE
Align your locations to one another so you know, without taking the time to calc with each hire, how different the locations are.
Bonus: you can message this to managers to they get on board with the rationale.
Based on cost of labor (demand) in those locations, not cost of living.
Note: Sales jobs and/or highly mobile jobs. Jobs above a certain level (either “national” or “HQ” or “highest”)
More about the challenges of aligning across locations in a minute.
PAYSCALE
Some of these challenges are especially prevalent with M&A, but we’ve also seen them in companies that just grow faster than they can keep track.
PAYSCALE
Identifying same job different title when benchmarking jobs (if the match is the same across a ton of titles, probably the same job)
- priced “Machine Operator 3” in NY, PDX, and Tampa – was about $37K, $36K, and $35.5K respectively. (NY s/b 2.8% higher than PDX, Tampa s/b 1.4% lower than PDX by geo differentials)
PAYSCALE
If you think you have the same job across a bunch of locations and your managers wont agree, you probably have different jobs.
In the eg above, the PDX version might be more of a Shop Laborer, NY might be a true Machinist, and Tampa might actually be a Shop Foreman, all in the Shop realm, but some have much more responsibility and market value than others.
PAYSCALE
scrap everything and decide what jobs you need. Realign all employees to the new structure. Grandfather as few as possible.
Consider company culture.
Can you roll it out all at once? Staggered implementation? Or do you really just have to pinpoint a few problems and make do.
PAYSCALE
If you can’t do a complete overhaul, identify the jobs that have either the biggest or the smallest disparity between highest and lowest paid employee in the job and start with those.
PAYSCALE
One of the quickest ways that people grow is through M&A. Many focus on merging business objectives, goals, company cultures, etc. Getting a handle on what you intend to do with comp early on will set you up for success
PAYSCALE
One of the quickest ways that people grow is through M&A. Many focus on merging business objectives, goals, company cultures, etc. Getting a handle on what you intend to do with comp early on will set you up for success
PAYSCALE
good – path of least resistance at the point of M&A
improve: leaves room for inequities b/n groups
works: if the new entities won’t interact much and are in different locations
PAYSCALE
good – fairly easy at least for some in the group, especially if one is well-established
improve: may leave the other group feeling slighted
works: if the rationale is communicated well
PAYSCALE
good – sets the tone that the companies both have merit
improve: will take the longest time to coordinate
works: if you have strong decision-makers and people who know each plan inside & out