The Widening Skills Gap and its Link to Compensation
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The Widening Skills Gap and its Connec5on to Compensa5on Mykkah Herner, MA, CCP Senior Compensa-on Consultant, PayScale, Inc.
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Transcript of The Widening Skills Gap and its Link to Compensation
The Widening Skills Gap and its
Connec5on to Compensa5on
Mykkah Herner, MA, CCP Senior Compensa-on Consultant, PayScale, Inc.
www.payscale.com
14,000 Posi5ons
2500 Customers
36 Million Salary Profiles
250 Compensable Factors
11 Countries
www.payscale.com
AGENDA
o What is the Skills Gap?
o Defini5on
o Who it Impacts
o What it Costs
o Bridging the Gap
o Iden5fying Skilled Talent
o Retaining Skilled Talent
o Comp Philosophies
o Notes on Millennials
o Cri5cal Ac5on Steps
www.payscale.com
What is The Skills Gap?
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Skills Gap Defined
Simply put…
“job applicants don’t have the right skills for the job”
-‐ Kathy Robertson, Sacramento Business Journal
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Prevalence of the Skills Gap
“67% of companies are having a hard 5me filling skilled
job posi5ons with 61% of those saying the reason is a
lack of qualified job applicants. Though unemployment is
s5ll high, the reported skills gap shows us that there are
many job categories in high demand.”
-‐ PayScale’s 2013 Compensa5on Best Prac5ces Report
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Effect of Skills Gap
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Who it Impacts (Industry & Org Size) o Industries:
o Mining, Oil & Gas Explora5on o Construc5on o Informa5on, Media & Telecommunica5ons o Manufacturing
o Organiza5onal Size o Small o Medium o Large
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Who it Impacts (Jobs)
Depends on Org Size Other Includes: • STEM Jobs • Finance • Medical
Specialists • Maintenance • Machinists • Truck Drivers
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Costs of the Skills Gap
o Turnover o Over5me
o Employee pay for “skilled” posi5ons
o Produc5vity
o Employee morale
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Is it a Myth?
The opposi5on says…
“The ‘skills gap’ myth plays a vital role in taking the
spotlight off corporate decisions and pro-‐corporate
government policies”
-‐ Roger Bybee, “The ‘skills gap’ myth”
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Bridging the Gap
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Iden5fying Skilled Talent?
Finding…
o Skilled foreign workers o Schools with the ‘right’ programs o Other companies
Airac5ng…
o Right-‐sized total compensa5on packages
Cul5va5ng…
o Succession planning o Educa5ng exis5ng workforce
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Retaining Skilled Talent
Complexity of the mix…
Company Culture
Base Pay Structure
Variable or Incen-ve Pay Structure
Individualized Rewards & Recogni-on
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Base Pay Strategy
o Define labor market
o Know market value for cri5cal posi5ons
o Manage fixed costs
o Pay for performance
o Target hot skills jobs higher
o Pay structure right-‐sized for organiza5on
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Variable & Incen5ve Pay Strategy
o Keep it simple
o Reward the right behaviors
o Align to organiza5onal goals
o Leverage variable costs
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Comp Philosophies
Compensa)on Philosophy – Be Flexible
o Uncertainty of “post” Great Recession
o Impacts of the Affordable Care Act
Company Philosophy – Be Fearless
o Take chances on exis5ng staff
o Consider what is “overqualified” and “unskilled”
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Notes on Millennials
o Transparency and communica5on
o Reward and recogni5on
o Engagement – to the extremes
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Cri5cal Ac5on Steps
• Benchmark cri-cal jobs – know their worth
• Consider strategy – are you willing to target higher for hot skills?
• Examine total compensa-on package
• Develop marke-ng around company culture
• Iden-fy missing skills in the organiza-on
• Iden-fy exis-ng or poten-al internal talent
• Develop a talent pipeline
• Calculate the cost of con-nued empty roles
• Ask yourself if the skills gap in your organiza-on is real or imagined
PayScale Delivers Where Other Compensa5on Providers Fall Short Connect with PayScale: Visit our blog: www.payscale.com/compensa-on-‐today Join our Group on Linkedin: Compensa-on Today: HR Best Prac-ces Get the 2013 Comp Best Prac5ces Report: hTp://resources.payscale.com/2013-‐compensa-on-‐prac-ces-‐report.html
Mykkah Herner, MA, CCP Senior Compensa-on Consultant, PayScale, Inc.
www.payscale.com
