IQcatalyst

Private companies have total rewards advantage

A 2007 pre-IPO and private company total Compensation Survey indicates private companies continue to attract key technical and executive talent with aggressive pay packages.

It is common knowledge that high profile public companies like Google and VMware pay big bucks, but we see private companies - hungry for talent - shell out $160,000 for a top developer plus a big chunk of pre-IPO stock. The authors also noted in the release the number of private companies providing cash compensation to board members doubled in 2007, and the survey found a dramatic increase in the use of annual stock grants.

The survey found comprehensive health care benefits packages are also commonplace, and 90% of the companies are contributing to employee tax-deferred retirement plans.

Other key findings of the survey include:

Aggregate employee ownership increased 10%, jumping from 15.13% to 16.64% of a company’s total shares outstanding.
Stock options remained the dominant means of providing employees with equity, however, use of performance-based stock option grants doubled, now provided by 48% of the companies surveyed.
Restricted stock, which is outright grants of stock to employees, saw a slight increase in prevalence, from 24% to 26%.
CEO and executive pay also increased. The typical executive team now holds more than 8% of the company - a powerful incentive for top performers.
The software industry showed the largest increase in overall employee ownership – jumping to 20% in 2007. Annual cash compensation showed a nearly identical leap.

Source(s): Syzygy Consulting Group

U.S. retention and staffing data

Employers are confident about employee retention this year, but hiring managers are finding it increasingly difficult to attract skilled workers, especially in the professional/technical positions, as well as supervisory roles, according to recent survey results.

The 2007 report found that 90% of employers said it is equally or more difficult to find qualified candidates today compared to one year ago. Roughly the same number felt that the hiring environment will be equally or more challenging 12 months from now.

More than half of hiring managers say the primary recruiting obstacle remains a shortage of qualified workers. The three positions that are most difficult to fill are sales, customer service and information technology (IT) roles, according to employers.

More than one-third (37%) of hiring managers said they anticipate increasing compensation levels for job offers in the next year.

Nearly a third of employers have implemented policies or programs to spur retention in the past year, with the most common tactics being bonuses (23%), salary hikes (16%) and a better office environment (15%).

Eight out of 10 hiring managers said their attrition rate has remained the same or decreased compared to last year.

Fifty-five percent of employees said they have received salary increases over the last 12 months, up from 45% in the 2006 survey; however, employees said that in terms of perks flexible work arrangements (65%), employee stock purchase plans (33%) and telecommuting (33%) opportunities are the most attractive.

More than half (58%) of workers are more likely to negotiate better compensation with a new employer now versus 12 months ago, double the percentage from last year.

Source(s): Robert Half International, CareerBuilder.com

An interconnected approach may work best

Workforce consulting firm urges interconnected approach to ensuring employee development, onboarding programs, culture integration and work-life balance. Organizations that cite workforce retention struggles typically have a host of interconnected problems beneath the surface. Creative approaches are needed before top-performing employees are lost in the dwindling talent pool.

The core problem usually stems from a lack of talent management and onboarding programs, which triggers a ‘ripple effect’ across recruiting, hiring and retaining, as well as professional development and succession planning.

With the workforce talent pool shrinking and employees seeking greater flexibility, organizations need to redouble their talent management efforts or risk losing top performers to competitors with progressive approaches. Illustrating the need for flexible thinking is a July 2007 survey from the Pew Research Center, which found that 60% of working mothers prefer part-time work rather than full-time – compared to 48% a decade earlier.

Corporate consolidations are also straining employee cultures. Companies once merged businesses, but now mega-organizations merge internal business units without always considering the need to integrate cultures.

Companies can no longer afford to be fuzzy, inefficient and disconnected when it comes to managing their employees. The changes in the marketplace demand that a corporate culture be connected and precise. Different challenges require different approaches. Experts stress that businesses need to “connect the dots” when modifying their traditional strategies. A talent management initiative should consider four guiding principles:

Persistence – A leadership team must be named and held responsible for overseeing and communicating ongoing success
Flexibility – Onboarding, coaching, team-building and other elements must be flexible in design and execution to fit with different cultures, operations and priorities within the organization
Accountability – Leaders and managers at all levels must be held accountable – financially and non-financially – for the initiative’s success. Without accountability, this work is likely to be postponed or unfinished due to competing priorities
Measurability – Success metrics must be established up front, implemented and reviewed to ensure effectiveness

The key is not to be overly cerebral, but rather to understand people and the workplace on a personal level. Once in place, this approach can be scaled to any level, focusing on individuals, departments and the organization.

Source(s):Corporate Counseling Associates (CCA)

Did we really need a study to tell us this...

Human Resources continues to be a big cost center, one of the functions business leaders look at first for cost reductions and productivity improvements.

So how can HR groups operate more effectively and efficiently? A comprehensive HR metrics study may have the answers. The study provides one common set of performance metrics for your key HR functions: Staffing, Benefits, Relocation, LOA, FMLA, Workers' Compensation and Medical Services.

For example, where do companies spend most of their HR cost? According to the study...

The majority of costs were spent on internal labor ranging from 55% to 82%
Outsourcing costs are the second highest at between 13 and 31% of all staffing costs
Interestingly, the largest companies in the benchmark had the most substantial investment in systems, at 32% of the total costs

Source(s): Best Practices, LLC