The world of high-tech has always been shrouded in a bit of mystery, and its pay practices is no exception. Organizations in all fields seek to learn the ins and outs of pay in that space, especially when it comes to geography, job type, and pay for performance. They want this information because it can inform their compensation decisions regarding their own high-tech people.
Now comes results from a study conducted by the leading global HR consultant Mercer that can help you make knowledgeable decisions about pay in the high-tech realm so that you’re duly competitive during a time when employee recruitment and retention is of utmost importance.
What the Study is About
Mercer explored pay practices in high-tech firms across the United States, paying close attention to industry variations plus those across employers.
The goals were to learn the facts about pay practices among high-tech organizations and variations among industry segments. Another aim was to determine the extent of variation across companies – whether compensation for performance is the rule across all tech types, for example.
The Kind of Data Included
The study includes information about work type, tenure, job levels, and employee performance. The data framework is standardized across the database, meaning that an entry-level position in whatever field is counted as the same across organizations.
What the Data Reveals
The study tuned up important findings regarding high-tech pay practices:
- Experience matters in high-tech, but that varies among organizations and segments. Thus, you should mull how much premium you put on experience as well as tenure when making competitive comparisons. During recruitment, job candidates and their prospective employers might consider point-in-time benchmarking to get started. Note, though, that once hired, such employees will likely look at where their compensation is going, as compared with other employers, and how much their organizations value them.
- Some high-tech segments reward performance more than others, even as high-tech has a more robust pay-for performance model overall. A good example would be the software/SaaS and computer/hardware segments. Differences, meanwhile, are most stark in target data computer (TDC). What this means for you is that, if your rivals are in the high-tech realm, you’re going to have to fork over more for performance, especially in the areas of bonuses and equity awards.
- Disparities in employee compensation, for the most part, have to do with job level and function, especially when it comes to senior professionals and managers. Compensation consultants recommend paying senior professionals at least as much as some managers and even some execs.
- Employees in the Bay area are more apt to earn more than their counterparts in other regions. Still, such regional disparities may not be as prominent as you might think. So, when establishing salary paradigms, and using any sort of regional differential, be sure to consider competitive labor markets. Note that, from a national average, the premium of pay or discount will always be different for positions that are in highest demand.
In summary, when employers are considering high-tech pay practices, they usually focus on high-level patterns or on case studies that are job specific. The Mercer study should go a long way toward giving you the facts about high-tech pay, which should help you make informed decisions about your own high-tech workforce.
As you’re putting together your strategy for compensating these employees, perhaps you should consider enlisting the help of Mercer, which not only conducted this study, but also employs sound data and expertise to help organizations of all sizes and in all fields with their compensation decisions.