Description: Every year, MRA conducts a compensation study to look at compensation and pay, from strategy to pay adjustments to market data to putting it all together with communication and transparency. In addition to publishing the survey results we also offer a webinar to talk about the results and share current trends and data.
Our podcast listeners are getting a special look at the survey data, as well as the opportunity to hear from MRA's experts and their takeaways from the webinar and ...
Description: Every year, MRA conducts a compensation study to look at compensation and pay, from strategy to pay adjustments to market data to putting it all together with communication and transparency. In addition to publishing the survey results we also offer a webinar to talk about the results and share current trends and data.
Our podcast listeners are getting a special look at the survey data, as well as the opportunity to hear from MRA's experts and their takeaways from the webinar and questions that were asked.
Resources:
Salary Data Aging Calculator
2023 Compensation Trends Survey
2023 Compensation Trends Survey Executive Summary
MRA Membership
About MRA
Let's Connect:
Guest Bio - Mackenzie Button
Guest LinkedIn Profile - Mackenzie Button
Guest Bio - Melissa Wymer
Guest LinkedIn Profile - Melissa Wymer
Host Bio - Sophie Boler
Host LinkedIn Profile - Sophie Boler
Transcript:
Transcripts are computer generated -- not 100% accurate word-for-word.
00:00:00:00 - 00:00:21:03
Unknown
Hello everybody and welcome to 30 minute Thrive, your go to podcast for anything and everything HR, powered by MRA, the Management Association. Looking to stay on top of the ever changing world of HR? MRA has got you covered. We'll be the first to tell you what's hot and what's not. I'm your host, Sophie Boler, and we are so glad you're here.
00:00:21:05 - 00:00:55:00
Unknown
Now it's time to thrive. Well, hello everybody, and welcome to this episode of 30 Minute Thrive. Today we're here to talk about compensation trends. So every year MRA conducts a compensation study to look at compensation and pay. From strategy to pay. Adjustments to market data, to putting it all together with communication and transparency. And in addition to publishing the survey results, we also offer a webinar to talk about these results and share current trends and data, which we just got done.
00:00:55:02 - 00:01:17:23
Unknown
So today our podcast listeners are getting kind of a special behind the scenes look at the survey data, as well as the opportunity to hear from two compensation experts and their takeaways from the webinar and also questions that they were asked today. So let me introduce you to our experts, Mackenzie Button, MRA's Total Rewards director, and Melissa Wymer.
00:01:18:01 - 00:01:45:23
Unknown
Our surveys manager at MRA. So thank you to you too, for joining me today. Thanks for having us. Well, let's just dive right in into the first question. So we actually conducted a poll on social media right before this com trends webinar. And we asked organizations, what are your top concerns surrounding compensations and its trends? And we actually got 53% to say that their top concern was on compensation strategy.
00:01:46:00 - 00:02:05:13
Unknown
So first, let's kind of talk a little bit about compensation strategy. Mackenzie, can you define what is a good strategy? Sure. So it's kind of funny that the 53% said that that was their top concern because I think Melissa knows from the comp trend survey that that was probably about the number that said they actually had a strategy.
00:02:05:14 - 00:02:39:03
Unknown
Really? Yeah. So we did see about half to respondents saying they had an actual compensation strategy. So first thing is to know that one might need to exist. And then when we work through our different projects and helping people figure out what a strategy might be, we want to look at things like your market position, how you internally value your jobs, figure out things for geography if it matters or not to your organization, internal or external equity, you know, frequency of updates and and figuring out how those things align when you know how often you want to do things.
00:02:39:05 - 00:03:08:00
Unknown
So having a strategy has all those different steps in it, and you want to have it aligned with leadership too. So understanding across the organization what strategy might be and how it might impact your organization's overall strategy for sure. Kind of diving a little deeper into that question, what impact does getting your compensation right have for employers? So I think it is it can do a lot of different things for an organization.
00:03:08:02 - 00:03:30:22
Unknown
So you can get the right candidates for your group with the right amount of money. It doesn't necessarily necessarily have to be above or below market, but having a good package that you put together does might not scare people away. And then it also can help retain, retain your or your employees and help them, you know, be successful and be motivated to to help your organization thrive.
00:03:31:01 - 00:03:57:08
Unknown
Yeah, absolutely. Good answer. So MRA conducts this annual compensation trend survey, as we said about this time of year to help employers start planning for the year ahead. So, Melissa, I'm curious regarding the survey itself, was there anything that really surprised you with any of the data or results? Actually, no. Well, we had the results from a nature perspective, and I was not shocked by the results.
00:03:57:09 - 00:04:21:15
Unknown
You know, pay transparency, continues to be a hot topic. Some of our respondents have pay strategies. Some do not. It is interesting to see how this all plays out. Yeah, absolutely. So, McKenzie, I know you've done this for a couple of years now, this event. So I'm curious to know how the competition trends have kind of evolved in recent years.
00:04:21:17 - 00:04:43:06
Unknown
Sure. So I think a couple of years ago, we tried to have a title called Something along the Lines of the Power of Pay Transparency. I think we might have used it a year recently, more recent than that, but that's something. Pay transparency was an anomaly for a very long time. I mean, people in the public sector or using public funds often would see some pay transparency within their ranges.
00:04:43:06 - 00:05:07:00
Unknown
People might know what's going on, but now it's way more in the forefront. So yeah, Melissa saw it in her data from the survey that people are becoming more open, organizations are more open to pay transparent and see, and then employers are having to react to that. So if you have pay transparency, you have to have typically a range or something to anchor your jobs to and not just the person.
00:05:07:02 - 00:05:23:14
Unknown
So we we still hear organizations say, you know, we ask them, how do you determine how much to pay someone? And they say, well, we looked at how much the last person made. And, you know, we try to align it with the last person in the job versus looking at it from a market perspective for a job versus a person.
00:05:23:15 - 00:05:51:19
Unknown
So pay transparency is making people do a lot of things differently. And I think it's good for organizations to get their strategies aligned. Absolutely. Well, getting some data out there, some numbers out there, according to this, your survey. 95% of respondents gave pay increases in the last 12 months and respondents who provided increases over the last 12 months reported issuing an average 4.5% increase, which seems like a pretty large increase.
00:05:51:19 - 00:06:21:13
Unknown
So I guess the question everyone and our listeners are probably wondering is what can we expect for next year, that percentage? Yes. So we did see pretty much an outrageous amount given COVID. And you were still dealing with the effects of COVID and we're retaining talent, but also recruiting because remote work really is the way to go. And so we have to find ways to incentivize them to come to the office.
00:06:21:15 - 00:06:48:09
Unknown
So we're expecting, because the economy is stabilizing a little bit more, we are expecting it to lower down to 3.8%, which is actually the current national average them. So with that being said, the 4% is actually not as outrageous compared to other sources that we use. So like world of Work is around 4%. Wells Tower, Watts is around 4%.
00:06:48:09 - 00:07:15:06
Unknown
And then one of our other companies that we look at is actually closer to the 3.8%. Gotcha. Okay. Can I add something to that? So when we talk about it in our compensation roundtable this month, we were talking about how the survey's last year, I think everyone predicted their budgets were going to be around 4%, maybe 3.8%. And but what they really did was at 4.5%.
00:07:15:06 - 00:07:29:22
Unknown
So people weren't able to stick to their budgets. They gave a little bit more than what they were planning on. So this year, seeing that the numbers are still up around the same, we'll see if people are able to you know, organizations need to give a little bit more outside of their predicted budgets for the year to year.
00:07:29:24 - 00:07:54:05
Unknown
The days of 3% increases are long over. I mean, not that they were that great back prior to COVID, but I know all of my employees were like, oh, this is a cost of living increase, not a merit increase. So I don't foresee us getting back down to the 3%, but probably more that middle three to upper. 402i gotcha.
00:07:54:06 - 00:08:13:23
Unknown
Yeah. And with anything you're going to have a range there depending on your compensation strategy, right? If you're going to do merit increases, what's important for those for those increases and what does your budget look like? Yeah. And nonprofits are going to have a hard time competing with that. I came from a nonprofit and doing 4% was just not in the budget, really.
00:08:13:23 - 00:08:39:01
Unknown
It's actually fewer grant funded. Mm hmm. So in our webinar today, we got a ton of chat questions. I think we got over like 48. Yes. So today I'm just I pulled out a few of them to go over. So the first one says, regarding aggregators, some comp professionals do recommend them, but the caution was just given to not rely solely on these pay factors, comp analysts, etc. per purchase.
00:08:39:01 - 00:09:04:09
Unknown
The trusted surveys to create their data sets. So how often do you see a truly significant difference in the aggregated data on the trusted source data? Anyone can take this on though. I think for the for the aggregators, they they can be good. But even with any survey source, they are not every job is going to be in there for every different survey cut and being able to fill in the gaps with an algorithm.
00:09:04:11 - 00:09:21:03
Unknown
That's where we usually want to dig in and see how many people have reported on it in this area. So if there's, you know, what's your number you use, what's the I have five or more, then we can respond on the data cut. So the the aggregators will be saying there might be zero people that have responded, but they're able to report on that data point.
00:09:21:05 - 00:09:42:01
Unknown
So it's just making sure you're using them with, you know, with some caution and with your eyes open and seeing if, you know, the data seems too good to be true. They probably are people reporting on it. The right not even be those industries in the area. Right. Just make sure you're looking at other sources to to to align that that you can validate whether participants and in numbers.
00:09:42:03 - 00:10:04:10
Unknown
So there is also a lot of tech questions around aging data. So one of them was what percentage do you use to age data? Oh, this is always a fun question because there's two factors when considering it. You want to know what the percentage which is typically aligned to the average market salary increase and then the desired date you want to use.
00:10:04:10 - 00:10:30:14
Unknown
If you plan to update your salary ranges in 2024 and the salary survey effective date is March of 2023, using a 4% as a market average salary increase, that data would be aged around 3.3%. The formula is usually ten divided by 12 times 0.4. So there's a fun little formula for it. And we also have that formula on our website for members to use.
00:10:30:16 - 00:10:56:03
Unknown
Okay. Well, we'll include that in the resources then. So another question we got was as pay transparency becomes more common, we'll start to see salary ranges included in job postings more often. So do you anticipate this becoming a more valid data source as more companies transition to open communication regarding positions and ranges? So I think Melissa has a good point to talk about.
00:10:56:03 - 00:11:17:19
Unknown
Like the we have the data points of like the five different levels of transparency. And one of the things is like, do do you tell your employees about what's on more than just on their paycheck? Do you train your employees on it? So it's one thing to actually be proactive and train them on this points. And the other perspective is we post it and they have to go looking for it and then they might come ask questions.
00:11:17:19 - 00:11:43:00
Unknown
So are you proactive about it with the pay transparency if you have to post it or are you, you know, more reactive because people see, you know, you're not sending them links to the job that they're in that you're hiring for, but you know, you have to be reactive. Yeah. McKenzie brings up a really good point. As I know, before even Ohio in Cincinnati was probably was in the timing.
00:11:43:02 - 00:12:29:15
Unknown
But some of our major cities in Ohio are having their position their pay scale bad hosted. And it did cause a lot of issues and lowered morale, especially when it came to someone just job hunting and then they stumble upon, oh, my company's hiring. Oh, I make way less than that for players. So being able to have that tough conversation and mentally prepare your staff, I know with us it was difficult to have those conversations, but also being transparent and hey, yes, we know you're underpaid.
00:12:29:15 - 00:12:56:09
Unknown
This is our plan to correct that. Mm hmm. And just being open again, I always like to say, if you have a range, try to stick within it. Right. So if people do see those ranges posted and they're below the minimum, then that's definitely something you should be reviewing. Yeah. Well, as we kind of wrap up today, McKenzie, I know you talked about some hot trends in your webinars, so can you and nurse with some of those hot trends for 2024 in relation to compensation?
00:12:56:13 - 00:13:17:01
Unknown
So we already talked too much about AI and we're still all learning about that too. But from the total rewards perspective we are seeing, yeah, that shift, that big thing that's shifting from what what are we spending our money on and is it what our employees want us to be spending our money on so much? And I talked about the, you know, polling your your employees to see what's important to them.
00:13:17:06 - 00:13:49:02
Unknown
And then I think when we had one of the questions in the chat about being, you know, what are some some lower cost options or ones that aren't hitting the budget too hard that can really motivate employees or attract the right candidates. So we think that balance of compensation benefits, the work life balance, the four different quadrants that we talk about when we look at total rewards, total compensation, you know, it's really balancing those things out to keep your workforce happy and getting the right people to work for, you know, some good trends to keep in the back of your head.
00:13:49:04 - 00:14:10:19
Unknown
Yeah. Well, thank you both for coming on to the podcast today and great job with the webinar. I appreciate both of you. And to our listeners, if you liked our chat and topic today, I would urge you to share out this episode. Consider joining MRA if you aren't a member already. We have all the resources you need in the show notes below, including resources from today.
00:14:10:21 - 00:14:33:06
Unknown
Otherwise, thank you so much for tuning in today and thank you both and we'll see you next week. Thanks. Thanks. And that wraps up our content for this episode. Be sure to reference the show notes where you can sign them to connect. For more podcast updates, check out other MRA episodes on your favorite podcast platform. And as always, make sure to follow MRA's 30 minutes drive so you don't miss out.
00:14:33:06 - 00:14:37:24
Unknown
Thanks for tuning in and we'll see you next Wednesday to carry on the conversation.
