HRA-NCA

Compensation 2009

September 2, 2009 • Washington, DC

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Compensation 2009

Welcome

Cynthia WardPresident, HRA-NCA

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• Mission of HRA-NCA– To promote the exchange of ideas and

practices and the development of mutual assistance among Human Resource professionals

• 30th Edition of HRA-NCA Compensation Survey• Government Contractors Survey – Partnership

with Professional Services Council (PSC)• Benefits Survey - Partnership with WACABA

and WEB

HRA-NCA Survey History

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JOIN HRA-NCA!Our Members receive discounts on

HRA-NCA survey products.

www.hra-nca.org

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2009 Compensation Survey

Cara CarterCompensation Survey Chair, HRA-NCACompensation Manager, BAE Systems

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• 2009 Benefits Survey– George Lane, Principal, Mercer Company

Chair of Benefits Survey

• 2009 Compensation Highlights– Mike Kostrzewa, PhD, HR Director, YRCI

• Trends in Policies & Practices– Suzanne Goulden, Senior Manager, Compensation and Benefits,

American Society of Clinical Oncology

• Government Contractor Compensation Highlights– Alan Chvotkin, Executive Vice President & Counsel,

Professional Services Council

• Online Survey Query Tool – Angelo Kostopoulos, AKRON, Inc.

• Questions and Answers

Agenda

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• Jesse Cantrill, Cantrill & Moyer • Cara Carter, Committee Chair, BAE Systems• Alan Chvotkin, Professional Services Council• Suzanne Goulden, American Society of Clinical Oncology• Erika Johnson, Watson Wyatt Worldwide• Michael Kostrzewa, PhD, YRCI• Anna Liu, Navy Federal Credit Union• Sonya Ousley Lee, SES-Americom • Dave Sturtevant, AKRON Team• Angelo Kostopoulos, AKRON Team

Compensation Committee Members

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George LaneHRA-NCA Chair of Benefits Survey

Principal, Mercer

2009 Benefits Survey

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• 265 respondents (63% repeat participation)• Includes:– Health (medical, dental, vision, CDH)– Welfare (FSA, life insurance, disability

insurance)– Work-Life – (leave, tuition assistance,

telecommuting, work environment, health and wellness)

– Retirement – (defined contribution, defined benefit)

• Survey Results available at: http://survey.akroninc.net/hrancaportal

The Benefits Survey Overview

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Fringe Rates

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What was the FINAL percentage change in your 2009 plan costs?

Weighted average of percent change in plan rates (increases, decreases, and no change), weighted by number of employees was 4.9%

Medical – Plan Financials

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Medical – Plan Financials

10%

13%

14%

20%

23%

26%

28%

37%

48%

49%

0% 10% 20% 30% 40% 50% 60%

Evaluated other funding mechanisms

Added or increased deductibles for Rx

Worked with a wellness vendor to facilitate on-site health assessments/screenings

Raised deductibles

Raised co-payments

Increased the percentage of the premium EMPLOYEES were asked to pay, but DID NOT pass on the entire increase to the employee (single coverage)

Increased the percentage of the premium EMPLOYEES were asked to pay, but DID NOT pass on the entire increase to the employee (family coverage)

Reviewed the marketplace for more competitively priced medical plans

Kept same percentage and shared the increase/decrease proportionately with employees (single coverage)

Kept same percentage and shared the increase/decrease proportionately with employees (family coverage)

Which of the following actions did you take in response to 2009 plan rate changes?

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Percent of Employers who have a PTO Policy

Work Life Benefits - PTO

37% 35%42% 43%

0%

10%

20%

30%

40%

50%

2006 2007 2008 2009

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What types of leave are replaced by PTO?

Work Life Benefits - PTO

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2009 Compensation Survey

Survey Highlights from Job Data

Mike Kostrzewa, PhDYRCI

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• Participants • Several Year-to-Year Comparisons

• Senior HR Jobs• Job Families• Individual Jobs

• New Hire Rates• Variable Pay

Topics

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Participants - 2009• 324 Participants • Representing 349,936 employees• Provided data on 77,752 Incumbents• Across 337 jobs• 69% Repeat participants• Average EEs – 1068, Median EEs – 210

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Assoc.14%

Educ.4% Fin. Services

7%

Local Govt4%Health

6%

Hospitality &Transp.

2%Manuf. & Constr.

2%

Non Profit17%

Prof. Services17%

Publ. and Broadcasting

3%

Tech & Science16%

Telecom &

Network Svc.2%

All Others6%

Employers by Industry

Participants - 2009

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Assoc.4%

Educ.14%

Fin. Services12%

Local Govt10%

Health17%Hospitality

&Transp.2%

Manuf. & Constr.

1%

Non Profit5%

Prof. Services11%

Publ. and Broadcasting

1%

Tech & Science

15%

Telecom & Network Svc.

1%

All Others7%

Incumbents by Industry

Participants - 2009

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• Survey includes 3 types of year-to-year comparisons:• Pay increase budgets• Actual pay increase to employees• Year-to-year change to average and

median of each job

Year-to-Year Comparisons

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Representative HR Positions-Repeat 2006 2007 2008 2009

Chief Human Resources Officer

$136K $135K $161K $175K

% Change -1% +20% +9%

Human Resources Director

$106K $107K $120K $130K

% Change 1% +13% +8%

Compensation & Benefits Director

$106 $106 $129K $131K

% Change 0% +22% +1%22

Change in Median by Job Family-RepeatIncumbent-weighted average of the median change increased by 3.5%

Job Family # Jobs

Average Incumbents/Jo

b

% Change

Banking10 169 24.6%

Legal9 112 12.5%

Warehousing & Manufacturing15 71 11.1%

Building & Facilities Management14 316 8.3%

Program/Project Management14 181 5.1%

Computer Operations & Networks17 147 5.1%

Software & Systems Development13 190 4.2%

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Change in Median by Job Family-RepeatJob Family #

JobsAverage

Incumbents/Job

% Change

Information Technology18 193 3.6%

Media & Communications18 82 2.9%

Secretarial & Clerical11 778 2.8%

Human Resources20 61 2.5%

Executive9 54 2.3%

Accounting, Finance, & Purchasing32 125 1.7%

Engineering & Field Services20 139 1.7%

Customer Service & Product Support10 67 0.3%

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2004-2005

2005-2006

2006-2007

2007-2008

2008-2009

Increased 69% 75% 66% 67% 72%

No Change 6% 6% 6% 6% 6%

Decreased 25% 19% 28% 27% 22%

Within+/- 10%

- 80% 72% 76% 75%

Percentage of Jobs Reporting Median Increases & Decreases

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Changes in Median – Widely Held JobsJob Family EEs % Change

in Median Repeat EEs % Change

(repeat)

Database Administrator 269 4.5% 131 9.7%

Marketing Manager 167 6.8% 66 6.7%PC/Network Support Specialist 766 5.1% 490 6.0%

Receptionist 293 10.1% 203 5.5%

Accounting Manager 327 7.5% 172 3.6%

Graphics Designer 251 5.3% 156 3.4%Building and Facilities Manager 134 1.5% 79 2.4%Executive Assistant/Secretary 1012 0.9% 743 2.1%Professional/Technical Recruiter 213 1.8% 152 1.0%26

New Hire RatesJob # Job Total

Survey ERs

ERs Reporting New Hire

Rates

New Hire ERs as % of all ERs

New Hire as

% of Median

New Hire as

% of Avg.

121 Analyst/Developer II 61 10 16% 119% 102%

230 Contracts Administrator 74 9 12% 116% 107%

212 Accountant III 100 14 14% 111% 99%

630Public Relations Representative 62 9 15% 108% 103%

1601 Program/Project Manager 107 12 11% 106% 96%

151Senior PC/Network Support Specialist 97 12 12% 106% 96%

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Short Term Incentive

Highest Targets % Target of Base

% Actual

Senior Inside Sales Representative-Telemarketer 42% 54%

Chief Executive Officer (CEO) 32% 42%

Sales Manager 29% 42%

Director of Sales 27% 25%

General Counsel 26% 25%

Business Development Manager 24% 37%

Highest Actual Percentage of Base PayAccount Executive 22% 83%

Senior Inside Sales Representative-Telemarketer 42% 54%

Sales Manager 29% 42%

STI was reported on 305 of 337 positions (91%)

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2009 Compensation Survey

Compensation Policies and Practices

Suzanne GouldenAmerican Society of Clinical Oncology

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Pay Increase Budgets Referral Bonuses Hours Worked/Overtime

Pay Increase Practices

Signing Bonuses Compensation Philosophy

Non-Cash Performance Awards

Retention and Completion Bonuses

Job Evaluation

Incentive Cash Compensation

Employee Turnover

Salary Structure

Shift Differentials Severance Pay Organization of the Compensation Function

On-Call/Standby Pay Practices

Security Clearance

Performance Management

Compensation Policies and Practices Surveyed in 2009

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Budgeted Pay: Average Pay Increase Budgets are significantly lower for all employee groups in 2009

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What was the actual average pay increase last year?

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2004 2005 2006 2007 2008

% Employers Offering

27% 26% 29% 41% 34%

Average Bonus

$3,599 $4,843 $4,185 $4,092 $4,332

Typical % of Base pay

5.0% 6.0% 5.0% 5.5% 5.5%

Pay 100% After months

3 3 2 1 1

• Drop in use as seen in previous survey• Amounts have remained relatively consistent with prior years

Signing Bonus

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Severance Pay

2005 2006 2007 2008 2009

% Employers Offering to All Employees

67% 65% 65% 65% 65%

Maximum Weeks of Payout

25 22 23 19 19

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Hours Worked and Overtime

2009

% Employers paying overtime ONLY after 40 hrs per week

81%

% Paying overtime for hours worked only (e.g. excluding holidays, PTO, other)

78%

% Paying a premium to exempt employees for hours over standard hours

13%

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Salary Structure

2009

% Employers with formal salary structure 73%

Methods used

Salary Grades 57%

Broadbands 16%

Market Ranges 25%

Other 2%

Typical salary spread 50%36

The Compensation Function

2009

Organizational Structure

Formal compensation department 18%

HR function integrates compensation dept. 65%

Finance function integrates compensation dept.

7%

We do not have a formal HR department 11%

Average number of compensation professionals

3

Average number of employees per comp. professional

33537

Target Compensation Philosophy

2009

Organization has a compensation philosophy

58%

Average and median target percentile 65%

% of employers targeting the 50th percentile 45%

% of employers targeting the 75th percentile 7%

% of employers targeting a different percentile 6%

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Performance Management2009

% Employers using performance evaluation form

94%

% Employers using same form across all employee levels

47%

% Employers using performance rating 87%

Number of levels used in rating system

4 levels or fewer 34%

5 levels 59%

6 or more levels 7%39

2009 Government Contractors Compensation Survey

Alan ChvotkinExecutive Vice President & Counsel

Professional Services Council

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Overview

• Definition: 50% or more of firm’s revenue derived from government contracts

• 101 organizations reported• 302 jobs reported• 27,323 employee salaries reported• Voluntary responses, but best that

exists• Aggregated trends; year-over-year

comparisons41

Survey Trends2008-2009 Year-over-year changes in median pay

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3.4%

5.3%

3.3%

0%

1%

2%

3%

4%

5%

6%

All Survey Employees Federal Government Pay

Government Contractor Pay

Survey Trends2008-2009 Year-over-year changes in median• 62 jobs declined in pay, 185 went up (+/- more than

0.5%)• 4.4% overall pay differential for government contractor

employees ABOVE federal employees (vs. 6.3% in prior survey)

• 3.0% if we exclude “Executive” pay (vs. 4.9% in prior survey)

• Government Contractor “Executive” pay levels on average 54% higher than federal employee counterparts

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Security Clearance Policies• Surveyed at the organizational level• 51% provide additional compensation to

cleared personnel• 3% - 13% average differential in base pay

reported through all clearance levels (Secret through TS/Poly), in Policies and Practices section.

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Survey Trends - Security Clearance

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Clearance Level

Jobs Compared

Median & Average

Premiums

Incumbent Weighted Premium

Secret 41 2-3% 4-6%

Top Secret 26 9-11% 10-14%

Top Secret SAP 25 7-9% 7-8%

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• Further analysis shows that some jobs with security clearances consistently have higher pay rates than others, when looking at a number of parameters:– Number of respondents– Number of employees– Level of clearance– Type and level of job

• Trends – Higher pay is evident in:– Highest levels in job family (Senior-level jobs)– Highest security levels (TS vs. Secret)

Survey Trends - Security Clearance

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Top Jobs – Top Secret/SAPJob Premium

Systems/Electronics Engineer V 14.9%

Software Developer V 13.4%

Senior Telecom/Network Hardware Engineer 11.2%

Telecom/Network Hardware Engineer 10.8%

Systems/Electronics Engineer IV 9.9%

Systems/Electronics Engineer III 9.1%

Systems/Electronics Engineer VI 9.0%

Network Analyst III 6.2%

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Top Jobs – Top SecretJob Premium

Systems/Electronics Engineer II 26.3%

Systems/Electronics Engineer VI 22.1%

Systems/Electronics Engineer III 21.0%

Chief Marketing Officer (CMO) 18.8%

Systems/Electronics Engineer IV 14.5%

Contracts Director 14.2%

Program/Project Senior Director 11.8%

Senior Computer System Administrator 11.0%

2009 Compensation Survey

Online Query Tool

Angelo KostopoulosAKRON, Inc.

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Cynthia WardVice President Market ServicesLee Hecht Harrisoncynthia.ward@lhh.com(202) 942-0431

George LanePrincipalMercerGeorge.Lane@marsh.com(202) 263-7847

Alan Chvotkin, Esq.Executive Vice President and CounselProfessional Services Councilchvotkin@pscouncil.orgwww.pscouncil.org(703) 875-8059

Cara CarterCompensation ManagerBAE Systemscara.carter@baesystems.com 703-668-4361

Suzanne GouldenSenior Manager, Compensation and BenefitsAmerican Society of Clinical Oncology Suzanne.Goulden@asco.org(571) 483-1464

Mike Kostrzewa, Ph.D.Director, Human ResourcesYRCImkostrzewa@YRCI.com(703) 995-9615

Angelo KostopoulosAKRON, Inc.akostopoulos@akroninc.net(202) 745-0400

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