Compensation Strategies for Fast Growing Companies

of 38/38
bamboohr.com 1-866-387-9595 Comp Strategies for Fast Growing Companies
  • date post

    21-Apr-2017
  • Category

    Business

  • view

    28
  • download

    0

Embed Size (px)

Transcript of Compensation Strategies for Fast Growing Companies

PowerPoint Presentation

bamboohr.com1-866-387-9595Comp Strategies for Fast Growing CompaniesMykkah

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 youre getting the comp equivalent of the right set-up as you grow?Join PayScale for this webinar where youll learn:How comp can help make hiring easier during high growthWays to pay fairly across multiple locations3 options for your comp plan during a merger or acquisition

1

Rusty LindquistVP of HCM Thought LeadershipBambooHR

Mykkah HernerModern Compensation EvangelistPayscale

bamboohr.com1-866-387-9595Comp Strategies for Fast Growing CompaniesBoth,

Why am I qualified to talk with you now and/or why am I so excited about growth

2

What well talk aboutChallenges and byproducts of rapid growthComp plans can helpAligning across multiple locationsThree options for M&AsThings to do today

bamboohr.com1-866-387-9595Comp Strategies for Fast Growing CompaniesBHR3

Understanding Rapid Growth(and how it relates to comp)

bamboohr.com1-866-387-9595Comp Strategies for Fast Growing CompaniesBHR

4

GrowthTimeSTAGE 1STAGE 2STAGE 3MarketViabilityClientAcquisitionBusinessScalability

Organizational Waste(grow)(validate)(operationalize)BYPRODUCTSOF GROWTHCultural DilutionReduced (Intrinsic) EngagementReduction In TransparencyStrained ManagementInconsistencies Create Friction

bamboohr.com1-866-387-9595Comp Strategies for Fast Growing CompaniesBHR

bamboohr.com1-866-387-9595Comp Strategies for Fast Growing CompaniesBHR6

bamboohr.com1-866-387-9595Comp Strategies for Fast Growing CompaniesBHR

7

Ram CharanBest-selling Author, Business Advisor

bamboohr.com1-866-387-9595Comp Strategies for Fast Growing CompaniesBHR

8

OUR PEOPLE SYSTEMSARE THE MOST IMPORTANT SYSTEMSIN OUR ORGANIZATIONS

bamboohr.com1-866-387-9595Comp Strategies for Fast Growing CompaniesBHR

9

Comp Plans Can Help

bamboohr.com1-866-387-9595Comp Strategies for Fast Growing CompaniesPAYSCALE

Lets 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.

10

Reinforce Clear Strategy

bamboohr.com1-866-387-9595Comp Strategies for Fast Growing CompaniesPAYSCALE

Boat

What are you trying to accomplish as an organizationWhere do you compete for talentHow competitive do you want to be in your various functional levelsWhat do you want to reward?

Not all can be 1st some need to be second or third.

11

Align Resources to Goals

bamboohr.com1-866-387-9595Comp Strategies for Fast Growing CompaniesPAYSCALE

CASH is limited. Spend it in the right places

Biz Goal = 2x revenueBiz Strategy = 1 new product per yearTalent Strategy = Engineer (innovators)Comp Strategy = retain / reward top engineers & incentivize to innovate

12

Develop Guidelines for Pay

bamboohr.com1-866-387-9595Comp Strategies for Fast Growing CompaniesPAYSCALE

Pay Ranges smaller number of unique job titlesPay 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?

13

Enable Quicker Pace

bamboohr.com1-866-387-9595Comp Strategies for Fast Growing CompaniesPAYSCALE

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 its 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 direction14

Ensure fairness across locations

bamboohr.com1-866-387-9595Comp Strategies for Fast Growing CompaniesPAYSCALE

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.15

Comp & Culture

bamboohr.com1-866-387-9595Comp Strategies for Fast Growing CompaniesBamboo

16

bamboohr.com1-866-387-9595Comp Strategies for Fast Growing CompaniesBamboo

17

Everything you dobecomes part of that storyThe story of what you value

bamboohr.com1-866-387-9595Comp Strategies for Fast Growing CompaniesBamboo18

Compensation:The story of how much you are valued

bamboohr.com1-866-387-9595Comp Strategies for Fast Growing CompaniesBamboo19

Making the CompensationConversation a Culture Builder

Dont be offendedBe openTake it seriouslyBe objectiveBe proactiveBe Positive

bamboohr.com1-866-387-9595Comp Strategies for Fast Growing CompaniesBamboo20

bamboohr.com1-866-387-9595Comp Strategies for Fast Growing CompaniesPAYSCALE

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.21

Make Sure Your Approach To CompTells The Right Story

bamboohr.com1-866-387-9595Comp Strategies for Fast Growing CompaniesPAYSCALE

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.22

Aligning Across Multiple Locations

bamboohr.com1-866-387-9595Comp Strategies for Fast Growing CompaniesPAYSCALE

Some of these challenges are especially prevalent with M&A, but weve also seen them in companies that just grow faster than they can keep track.

23

Same job in multiple locations has different titles and pay

bamboohr.com1-866-387-9595Comp Strategies for Fast Growing CompaniesPAYSCALE

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)

24

Different jobs in multiple locations have the same titles

bamboohr.com1-866-387-9595Comp Strategies for Fast Growing CompaniesPAYSCALE

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.

25

How do you fix it?

bamboohr.com1-866-387-9595Comp Strategies for Fast Growing CompaniesPAYSCALE

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.26

Target Specific Issue Areas

bamboohr.com1-866-387-9595Comp Strategies for Fast Growing CompaniesPAYSCALE

If you cant 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.

27

Comp & Engagement

bamboohr.com1-866-387-9595Comp Strategies for Fast Growing CompaniesPAYSCALE

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 success28

bamboohr.com1-866-387-9595Comp Strategies for Fast Growing Companies

Feeling appreciated, valued, and adequate rewarded for your effort.

ValueTotal rewardsVa

ValueRewardsRecognitionCompensation

What you get from work

bamboohr.com1-866-387-9595Comp Strategies for Fast Growing Companies

30

Comp is about anExchange of ValueNot just Money

Experience in industryExperience in market verticalExperience in adjacent marketsExperience in field of disciplineExperience in adjacent disciplinesExperience with competitorsProduct knowledgeCompetitor knowledgeTime and experience in companyEducationDiscipline training and certificationSupply and demandEmployer Value DriversEmployee Value DriversBase payPerformance PayPaid time offBenefitsTravelCulture and environmentWork flexibilityWork/Life balanceMeaningful workWho you work withChallenging workOpportunity to impactJob securityShared purpose / missionCareer advancement opportunitiesAutonomySenior leadership

bamboohr.com1-866-387-9595Comp Strategies for Fast Growing CompaniesThree Options for M&As

bamboohr.com1-866-387-9595Comp Strategies for Fast Growing CompaniesPAYSCALE

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 success32

Maintain separate plans

bamboohr.com1-866-387-9595Comp Strategies for Fast Growing CompaniesPAYSCALE

good path of least resistance at the point of M&Aimprove: leaves room for inequities b/n groupsworks: if the new entities wont interact much and are in different locations

33

Use one plan

bamboohr.com1-866-387-9595Comp Strategies for Fast Growing CompaniesPAYSCALE

good fairly easy at least for some in the group, especially if one is well-establishedimprove: may leave the other group feeling slightedworks: if the rationale is communicated well34

Merge plans too

bamboohr.com1-866-387-9595Comp Strategies for Fast Growing CompaniesPAYSCALE

good sets the tone that the companies both have meritimprove: will take the longest time to coordinateworks: if you have strong decision-makers and people who know each plan inside & out35

Things to do todayThings to do todayClarify alignment of business goals to talent strategyDiscover your talent marketsPrioritize pay decisions based on the aboveDecide between pay ranges and pay gradesIf merging, get to know both plansMake a plan to develop a comprehensive comp plan

bamboohr.com1-866-387-9595Comp Strategies for Fast Growing CompaniesPAYSCALE36

Thank you!Follow BambooHR on social media:

bamboohr.com/blog

bamboohr.com1-866-387-9595Comp Strategies for Fast Growing Companies

37

Follow BambooHR and PayScale on social media:bamboohr.com/blog | payscale.com/compensation-today

Questions?Rusty LindquistVP Strategic HR InsightsBambooHR

@[email protected]/in/rustylindquistMykkah HernerModern Comp EvangelistPayscale

@[email protected]/in/mykkahherner

bamboohr.com1-866-387-9595Comp Strategies for Fast Growing CompaniesBHR

38