market pricing – Knowledge Pay Website

Funny Market Pricing Stories

Posted on November 10, 2011 by Chris Kelley Posted in KnowledgePay

Funny how? Ha-ha funny, or funny like a clown. Well neither really. These are just a few of the quirky, humorous situations I’ve stumbled across. Would love to hear your stories.

Towers’ Data Always Runs High – I’ve actually heard this one on several occasions. My response is always, “Really? Do they have bigger calculators or something?” I think not. It’s better to look at the participant lists and see if there’s a driving force behind why there may be data differences between survey vendors for the same benchmark job. Towers Watson does have a very high percentage of large companies and better representation amongst a few of the higher paying industry groups which offers a better rationalization for why their data might be higher. But what if, just maybe, that is the relevant labor market where you compete for talent. Conversely, what if you’re a smaller firm in a notoriously low paying labor market? You would likely be looking to compare to a different set of participating companies. The real story here is make sure you select the survey vendors that are the best reflection of the labor pool where you swim and don’t just knee-jerk react to some off-handed comment that one vendor “runs high”.

Market Pricing Social Media Jobs (Really, Any Emerging Job Family)

Posted on September 13, 2011 by Chris Kelley Posted in KnowledgePay, Market Pricing, Salary Surveys

Ann Bares recently posted a blog on market pricing social media jobs. She really hit the nail on the head by using a very timely and relevant example many of us in the compensation profession are wrestling with right now. Today it is social media jobs, a few years ago it was web development, and tomorrow it will be some other emerging field. We need practical guidance for market pricing emerging job families

I don’t disagree with Ann’s advice at all, but rather wanted to add some additional perspective.

Understand the Labor Market: Know where people come from and/or go to when trying to fill those emerging job families. The social media job family that Ann has queued up is a fantastic example because five years ago, these jobs didn’t even exist. Think about it…no kid was playing in the sandbox twenty years ago saying, “When I grow up, I want to be a Community Moderator.” Yet today, there are thousands of people making a living by doing just that.

So, where did they come from?

Clearly, there’s no single answer, but when I look at the survey job summaries, the Monster job postings or the LinkedIn profiles of people doing this type of work, I see threads of both journalism and marketing. This prompts me to study the market data for those job families as well. Granted, this is not your typical “70% of job duties” type of job match for the social media jobs, but it does provide some insight on the wages paid to people in a nearby talent pool. If the tasks and qualifications are reasonably similar, the market data for these adjacent, but more established, job families will tend to track with the emerging field.

Salary Planning Surveys…and a Grain of Salt

Posted on August 23, 2011 by Chris Kelley Posted in Compensation Planning, KnowledgePay, Market Pricing, Salary Surveys

It’s that time of year when salary planning surveys get published and compensation professionals all over the world look for guidance about how much to age their market data and build their compensation budgets for the upcoming year. There are several sources of salary planning survey data that get used year in and year out.

The most prolific is the WorldatWork…which has been used be virtually every company where I’ve worked or consulted. But there are also many other sources that compensation professionals turn to, such as AonHewitt, Mercer, HayGroup, Towers Watson, etc. Which ones are going to be right for any one company is really going to depend on their labor market and which salary survey vendor has the best representation within that labor market.

Job Evaluation Methodologies

Posted on July 4, 2011 by Chris Kelley Posted in Job Evaluation, KnowledgePay

There was an interesting post in Ann Bares blog post titled “Are We Looking at a Job Evaluation Revival in ’09?” back in early 2009 and I first commented on it under my old blog, The Market Pricing Manifesto. A couple of things have happened since then…not the least of which has been two plus years of a crappy labor market and moving my blog to KnowledgePay. I’ve taken the opportunity here to provide a fresh perspective on the job evaluation methodologies we’re seeing.

In her article, Ann accurately describes the history and migration that we have experienced in the past few decades surrounding the shift away from internal job evaluation methods (i.e., Point-Factor) and the predominant use of external job evaluation, aka, Market Pricing.

In her article, Ann is dead-on for why organizations have adopted market pricing as the primary method for valuing jobs. To build on that though, organizations, starting back in the ’70s started to shatter that whole employment relationship paradigm of people going to work somewhere right out of school and then working there until they retire. Prior to that time period, mass layoffs were very uncommon…now, we pick up the morning paper (or rather, log onto our online news sources) and read through to find out which company announced a major layoff.

What this has created is a “free-agency” labor market. I’m sure there are a whole host of other social dynamics that have contributed to the paradigm shift, but now, the paradigm is much more about “This is the work that I do. I do it for you today, but tomorrow, I might do this work somewhere else.”

Workers are much more focused on their work, instead of just being focused on who they do the work for. As a result, the mind-set is much like that of free agent in sports who goes to play for the team who is able to maximize their pay.