Compensation Management Workshop

Compensation Management Workshop – Nairobi, Kenya

Birches Group is pleased to announce our Compensation Management Workshop for the Development Community.  The session will be held September 28-30, 2020, in Nairobi, Kenya.

This course is designed for development community HR professionals who want to learn the basics of compensation management.  Topics include:

The Practice of HR

  • HR as a Strategic Practice
  • Challenges of Globalization
  • Re-Integrating HR

Introduction to Compensation

  • The Purpose of Compensation
  • Perspectives on Pay – Labour Market vs. Cost of Living
  • Community Values and the Value of Mission

The Nature of Emerging Markets

  • Understanding Context – the Uniqueness of Emerging Markets
  • The Market and the Proxy
  • Case Study: Zambia

Measuring the Market – The Salary Survey Methodology

  • How to Measure Markets
  • Challenges to Market Measurement

Structure of the Survey – Jobs

  • The Primary Unit of Measure – the Job/Grade
  • Job Matching – The Foundation of the Survey

Structure of the Survey – Jobs

  • The Primary Unit of Measure – the Job/Grade
  • Job Matching – The Foundation of the Survey

Structure of the Survey – Salaries

  • Three Reference Points – Why More Than One
  • The Questionable Utility of Average and Occupation Data

Structure of the Survey – Benefits

  • The Purpose of Benefits – Why not just cash
  • Pension and Insurance

Data Aggregation –Building Your Market Proxy

Moving from Data to Design

Building the Salary Scale Structure of the Survey – Jobs

  • What is a Pay Scale?
  • The Three Judgments and a Prayer
  • The Art of the Curve
  • Testing the Fit
  • Practical Exercise – Scale Construction

Benefit Package Design

  • Thoughtful Benefit Design

Sustaining Compensation Over Time

  • Continuity in Market Intelligence
  • Bringing Transparency and Predictability
  • Maintaining Salary Scales: Interim Survey Updates

Managing Through Volatility

  • Challenging Situations
  • The Use of Special Measures

Building the Workforce

  • Community™ Human Resources
  • Salary Surveys and Salary Scale Design
  • Skills Assessment
  • Performance Evaluation

Truly Strategic HR

  • The Challenges and Risks
  • Re-Integrating HR

Birches Group is Changing the Way You Use Salary Surveys

Most human resources professionals are familiar with salary surveys. Consulting firms around the world offer labor market data, and have been doing so for decades.

And, you would agree that offering a competitive compensation and benefits package is a key element in attracting talent to your organization and retaining and motivating that talent towards the achievement of your organization’s mission.

So, isn’t it odd there are still many organizations that don’t participate regularly in salary surveys?

Are Salary Surveys Even Worth It?

Some organizations believe salary surveys are luxuries – expenses with little value – and so choose to do without them.  Others simply purchase surveys on an ad-hoc basis when acute pay issues are encountered. Without regularly updated labor market information, organizations are unable to make informed, data-based decisions on pay – relying instead on anecdotal ‘evidence’ from staff and managers (who hasn’t heard: “Well, in Company X they pay Y dollars for that job?”).  Participation in salary surveys – especially for global organizations – is critical. 

It’s a big world.  Compensation and benefits packages, the rate of market movement, and general labor market conditions vary greatly from one country to another.  For organizations that don’t participate regularly in salary surveys, what they know about the labor market can easily become outdated or inaccurate.  Basing pay decisions (often one of the highest expenditures in an organization’s budget) on outdated, inaccurate assessments of the market simply because salary surveys are expensive, or relying on word-of-mouth market information, is – as the saying goes – penny-wise and pound-foolish.

But when it comes to surveys, what is it that you are paying for?

One Size Does Not Fit All

Many consulting firms that carry out yearly salary surveys take methodologies designed for large, developed labor markets (e.g. the US) and apply the same approach in developing countries (e.g. Uganda).  But there are big differences between developed and developing markets, as shown in the table below:

As you can see, there are some important differences between developing and developed markets.  The salary survey you choose should apply a methodology that accounts for these differences and captures the nuances in each country.

One of the most common mistakes companies make in developing markets is seeking only sectoral data.  There are several reasons why this doesn’t work:

  1. The sectors are too small.  There are insufficient employers for a meaningful sample.
  2. The sector is highly stratified.  There could be enough employers in a sector, but only a few are leading the market and the rest are well-below those levels.  The data is skewed low.
  3. You ignore other prominent sectors.  In developing markets, the leading employers across sectors will provide a richer market position than a single sector view.

Don’t overlook the international public sector, such as embassies and multi-lateral international organizations, and international NGOs.  These organizations are well-structured and provide competitive packages.  They recruit a lot of the same talent most large, global companies seek.

Birches Group Knows What Works in Developing Markets

Birches Group has been conducting salary surveys in 150 developing countries globally for almost fifteen years. Recognizing the limitations of traditional, developed-market-based survey methodologies, Birches Group tailored its approach to meet the requirements of developing markets:

  • Developing markets are dynamic and fast-moving:

We update salary survey data three times a year in order to reflect the most current data from participating employers.

  • Labor market competition is multi-sector:

We gather data from targeted, leading private industry companies (both local and multinational), embassies and governmental organizations, and international NGOs.

  • Job matching expertise is highly variable:

Birches Group specialists match your jobs, ensuring a high level of accuracy and consistency in our survey data.  The whole data collection process is streamlined and customer focused.

We Don’t Stop There

Birches Group’s new Community™ Market Compensation and Benefits Survey Report provides comprehensive labor market data in 150 countries in a standard format that is simple, concise and easy to use, and consistent across all survey locations. Each report comes with an Executive Summary that identifies your organization’s placement in the market (i.e. how far ahead or behind you are) and how aligned you are with market practices in terms of benefits. Further, all annual subscriptions come with a free custom cut that allows you to select a sub-group of organizations, so you can target the ones that are of most interest to your organization.

We are available to assist salary survey participants in interpreting the salary survey report, selecting their custom cut of participants, and extending their use of survey data to salary scale design. Visit our website to learn more.

Integrated Human Resources Management Workshop

Integrated Human Resources Management Workshop – Dubai, UAE
October 14-18, 2019

Birches Group is pleased to announce it will continue to run its Integrated Human Resources Management Workshop for the Development Community, which focuses on Job Design and Evaluation, Compensation Management, and Recognition and Reward.  The 5-day session will be held on October 14-18, in Dubai, UAE.

This course is designed for professionals in the development community who wish to emerge as strategic partners of their organization. In the span of five intensive days, workshop participants will learn the fundamentals of how to link four critical areas of Human Resources:

  • Evaluation of Jobs
  • Design of Salary Scales
  • Assessment of Skills
  • Measurement of Performance

The workshop is built on Birches Group’s integrated Human Resource platform – Community™. The Community™ application will be used across the job evaluation, skills assessment, and performance evaluation exercises. Practical exercises and diagnostic activities are also included.

Participants will not only know more about each of these components, but how they can be integrated to accomplish the organization mission. Join us and learn from the experience and expertise of our facilitators and from other participants. 

To know more about the course, please view our training prospectus here.

Why Incumbent Data in Salary Surveys is Misleading

For many years, employers have used salary surveys to provide market references to manage compensation in their organization and to “price jobs” in the market.  Conventional wisdom suggests a high-quality, reliable survey has the following characteristics:

  • The largest possible group of participants
  • The greatest number of specific jobs
  • The highest number of incumbents reported
  • Survey statistics based on incumbent-weighted averages

In short, bigger is better.

As is often the case, we believe that the conventional wisdom is wrong!

Incumbent-based data is not job-based – it’s personal!

Think about it.

  • Salary ranges represent the range of pay an employer is prepared to offer for position with the same level of contribution to their organization (e.g., the same equivalent worth).
  • All incumbents are placed within the same internal, generic range (employers do not usually have separate salary scales for each occupational group or function).
  • Individual salary levels are not determined by any job factor!  Incumbent salaries are based on personal characteristics such as qualifications, skills, experience and performance, and organizational constraints such as internal policies and guidelines, and internal equity.

There are no job-based factors used to determine placement in the range.  It is easy to conclude using actual incumbent salaries instead of salary ranges is — at best – misleading, if not entirely invalid.  But don’t take our word for it.  Let’s put it to a test.

Salary Range Data is Highly Correlated to Incumbent Values

Birches Group did an analysis of actual incumbent data values and the corresponding salary range values for BG-10 level Senior Working Professional roles in Jamaica.  The dataset included positions from seven different job families.  Twenty-nine employers reported data at this level.

To start the analysis, we examined each discrete position reported by each employer.  In the chart below, the positions are color-coded by occupation (job family), and each employer is represented by a vertical array of dots.  The chart shows all observations, not a specific percentile.

You can see there is a wide variety of values, both within each employer and across different ones.

Next, we examined the salary ranges for these employers, and determined how the incumbent salaries fell into each employers’ salary range.  The chart below shows the ranges.

It’s clear that except for two employers with no formal range defined (the two single dots in the chart circled in red), the rest all have salary ranges defined.  Some of the incumbent values are distributed across the ranges, while some are more clustered, but they are all within the range!  You will also notice that the range spans (the “distance” from minimum to maximum) varies quite a bit – some employers use narrow ranges, others wider ranges, depending on their unique circumstances and requirements.

A common benchmark that many clients use is the 50th percentile or median of the market.  While we could debate the definition of “the market” (and we will in another post), it is possible to measure the median of the salary ranges in a market.

For BG-10 in Jamaica, the subject of this analysis, the 50th percentile salary range is J$ 6,273,150 to J$ 9,576,152.  We calculated these numbers by simply separately calculating the median of all the reported minimum values, and all the reported maximum values. The next chart shows this median range added to the incumbent chart.

Now you can see which incumbent data points are within the 50th percentile range in the market.  It’s important to realize that a percentile value in a salary survey should never be a single number; it should always be a salary range.  If you rely only on incumbent data points when using surveys, you are missing out on what is really happening in the market.

Combining the two prior charts yields the next one, which shows the employer salary ranges against the 50th percentile (shaded blue horizontal bars):

You can observe that just 6 employers (about 21% of the sample) have ranges that are totally outside of the 50th percentile range of the market.  Or stated another way – nearly 80% of employers have a salary range that intersects with the market median range.

We also examined the data by occupation, looking at the mean range for each occupation versus the market.

In the above chart, you can see, aside from Logistics and Program, which were matched by fewer than 8 employers and not truly representative, the rest of the occupational data ranges fall well within the overall 50th percentile.  In other words, the occupation or job family doesn’t impact the going rate for a job very much at all, and it would be very easy to just use the overall data, without any occupational designations, as the basis to determine your market position.

Think about it.

You go crazy trying to match multiple benchmark jobs in surveys.  Then you take that data and apply a secret formula (perhaps weighted averages by incumbent count, for example) to arrive at a “going rate” for your midpoint.  But the data you are combining isn’t really that different; our data shows you could just take the range we report and go from there.  Much easier.

A New Vision for Salary Survey Data

Birches Group believes that salary survey data should be job-based, not personal.  Salary ranges represent for an employer the potential range of salary which the organization is willing to pay for a job at a specific grade level in the organization.  In other words, the range represents the value the organization attaches to all jobs at that grade level, which are deemed to have equivalent worth because they have been evaluated to the same grade.  Salary ranges, not incumbent data, represent job-based values which are appropriate for benchmarking salaries.

By comparing salary ranges instead of incumbent data, employers avoid using personal data, which is volatile and introduces a level of false precision which is misleading when specific jobs or occupations are compared to each other.

Introducing Community™ Market

Community Market is the new name for the Birches Group salary and benefits survey.  The survey format has been streamlined and simplified and includes several new features, including an easy and convenient way to assess your market position at a glance.  Another important change is the way job information will be captured.  We will no longer show separate market values for each benchmark job.  Instead, we will show data aggregated for all jobs at the same Birches Group level.  We will still identify which jobs are in which grade, but as we’ve demonstrated, the occupational differences reported in surveys (including ours) are resulting from personal data, not job-based information, and are not appropriate for benchmarking.

Beginning in October 2019, the new format will be the standard report output for all our surveys.  And starting in April 2020, we will no longer collect incumbent-based data since it will no longer appear in the survey reports.

Community™ Market is part of the Birches Group Community™ platform for integrated HR management.  The platform includes modules for job evaluation (Community™ Jobs), skills assessment (Community™ Skills) and performance management (Community™ Performance) in addition to market surveys.  The job levels established using our Community™ Jobs methodology are used to provide job levels in our surveys, and to assess skills and performance against standards that reflect the same job levels.  It’s the first integrated approach to human resources management.

Learn More

Contact us to learn more about the changes in our survey methodology, or to explore how the Community™ platform can be useful for your organization.

Integrated Human Resources Management Workshop

Integrated Human Resources Management Workshop – Nairobi, Kenya
July 29-August 2, 2019

Birches Group is pleased to announce it will continue to run its Integrated Human Resources Management Workshop for the Development Community, which focuses on Job Design and Evaluation, Compensation Management, and Recognition and Reward.  The 5-day session will be held on July 29-August 2, in Nairobi, Kenya.

This course is designed for professionals in the development community who wish to emerge as strategic partners of their organization. In the span of five intensive days, workshop participants will learn the fundamentals of how to link four critical areas of Human Resources:

  • Evaluation of Jobs
  • Design of Salary Scales
  • Assessment of Skills
  • Measurement of Performance

The workshop is built on Birches Group’s integrated Human Resource platform – Community™. The Community™ application will be used across the job evaluation, skills assessment, and performance evaluation exercises. Practical exercises and diagnostic activities are also included.

Participants will not only know more about each of these components, but how they can be integrated to accomplish the organization mission. Join us and learn from the experience and expertise of our facilitators and from other participants.

To know more about the course, please view our training prospectus here

Birches Group On-Site Visit to Dili, Timor-Leste

We are pleased to announce that Birches Group will be in Dili, Timor-Leste from July 8 to July 12, 2019!

On July 9, 2019, we will be conducting a round table meeting of leading employers in Timor-Leste to discuss compensation and benefits trends, practices, as well as findings from our Birches Group salary survey in Timor-Leste, which is updated three times annually. This event will be sponsored by Birches Group.

We will also be meeting with target employers in Dili during the week. For more information, please contact us.

This is a wonderful opportunity to meet with peers and share information about the challenges of human resources in Timor-Leste.

Integrated Human Resources Management Workshop

Integrated Human Resources Management Workshop – Johannesburg, South Africa
May 20-24, 2019

Birches Group is pleased to announce it will continue to run its Integrated Human Resources Management Workshop for the Development Community, which focuses on Job Design and Evaluation, Compensation Management, and Recognition and Reward.  The 5-day session will be held on May 20-24, in Johannesburg, South Africa.

This course is designed for professionals in the development community who wish to emerge as strategic partners of their organization. In the span of five intensive days, workshop participants will learn the fundamentals of how to link four critical areas of Human Resources:

  • Evaluation of Jobs
  • Design of Salary Scales
  • Assessment of Skills
  • Measurement of Performance

The workshop is built on Birches Group’s integrated Human Resource platform – Community™. The Community™ application will be used across the job evaluation, skills assessment, and performance evaluation exercises. Practical exercises and diagnostic activities are also included.

Participants will not only know more about each of these components, but how they can be integrated to accomplish the organization mission. Join us and learn from the experience and expertise of our facilitators and from other participants. 

To know more about the course, please view our training prospectus here.

Integrated Human Resources Management Workshop

Integrated Human Resources Management Workshop – Dubai, United Arab Emirates
October 8-12, 2018

Birches Group is pleased to announce a second run of our Integrated Human Resources Management Workshop for the Development Community, which focuses on Job Design and Evaluation, Compensation Management, and Recognition and Reward.  The 5-day session will be held on October 8-12, 2018, in Dubai, UAE.

This course is designed for professionals in the development community who wish to emerge as strategic partners of their organization. In the span of five intensive days, workshop participants will learn the fundamentals of how to link four critical areas of Human Resources:

  • Evaluation of Jobs
  • Design of Salary Scales
  • Assessment of Skills
  • Measurement of Performance

The workshop is built on Birches Group’s integrated Human Resource platform – Community™. The Community™ application will be used across the job evaluation, skills assessment, and performance evaluation exercises. Practical exercises and diagnostic activities are also included.

Participants will not only know more about each of these components, but how they can be integrated to accomplish the organization mission. Join us and learn from the experience and expertise of our facilitators and from other participants. 

Integrated Human Resources Management Workshop

Integrated Human Resources Management Workshop – Dubai, United Arab Emirates
October 1-5, 2018

Birches Group is pleased to announce our first Integrated Human Resources Management Workshop for the Development Community, which focuses on Job Design and Evaluation, Compensation Management, and Recognition and Reward.  The 5-day session will be held on October 1-5, 2018, in Dubai, UAE.

This course is designed for professionals in the development community who wish to emerge as strategic partners of their organization. In the span of five intensive days, workshop participants will learn the fundamentals of how to link four critical areas of Human Resources:

  • Evaluation of Jobs
  • Design of Salary Scales
  • Assessment of Skills
  • Measurement of Performance

The workshop is built on Birches Group’s integrated Human Resource platform – Community™. The Community™ application will be used across the job evaluation, skills assessment, and performance evaluation exercises. Practical exercises and diagnostic activities are also included.

Participants will not only know more about each of these components, but how they can be integrated to accomplish the organization mission. Join us and learn from the experience and expertise of our facilitators and from other participants. 

Birches Group Announces Newest Multisector Survey in the Cayman Islands

Birches Group is pleased to announce the addition of the Cayman Islands to our global multisector salary survey footprint.  The first survey released is effective April, 2018.  Additional survey updates are planned according to the usual Birches Group schedule, with further releases in July and October. The addition of this new market brings the total number of multisector salary surveys to 156 high-growth and developing markets, and expands our coverage in the Caribbean region to ten countries.

Employers from all sectors are invited to participate in the salary survey. Our surveys capture comprehensive information on salaries and benefits for local employees. Participation is easy, as Birches Group analysts collect data through employer interviews and conduct the job matching exercise on behalf of the employer.

For more information about how to join our salary survey, please contact us.