Marketing unveiled its 2012 Salary Benchmarks survey in its Oct. 8 issue, running a sector-by-sector breakdown of salary ranges for every level of the marketing industry alongside reporting and commentary on issues shaping the marketing job market. Over the coming days, MarketingMag.ca will present some of that editorial package, explore freelancing, pay raises, title changes and talent retention.
Today’s staffing and compensation strategies are changing. Here’s why
Predicting the future used to be easy.
But with the economy fluctuating wildly from week to week and a host of other variables regularly surprising us, it’s challenging to know what the future holds for businesses or for salaries. Marketing’s survey tells us what year-over-year compensation fluctuations look like. But what about next year, or five years from now? What will the future of compensation look like then?
Here are five trends to keep in mind that will affect our industry in the coming years.
Salary Band Compression
As the “silver tsunami” moves through marketing, we’ll see the salary bands compress across organizations. Overall salary budgets will increase between 3% to 4% per year, but the vast majority of the increases will go to the lower levels of the business. Mid- to senior management salaries will remain flat and in some cases may actually decline. This bi-generational trend will continue for the next 10 years and may result in some star employees making as much or more than their managers. Think of the high-profile sports teams with their million-dollar players out-earning their managers and coaches. Why will senior-level talent work for less? We’re facing an over-supply of baby boomer managers staying in the workforce longer due to wiped-out savings.
Better Hiring and Retention
Hiring people is expensive. It’s even more expensive when you do it wrong. Many companies still don’t apply measures to their hiring, employee performance or retention. This will change. As companies continue to streamline and focus on improved productivity, they’re going to have to get better at hiring, performance and retention. Platitudes won’t cut it, real performance measures will. Compensation increases will be tied to results rather than tenure. And as employees get more productive, companies will pay fewer people more money to achieve more while still lowering overall wage costs.
It’s Not (Just) About the Money
While the up-and-coming workforce will make more money than their retiring boomer bosses used to, money alone won’t buy their efforts or their loyalty. The current and next generation of junior- to mid-level staff are socially conscious, fiercely independent and more cynical about their corporate bosses than ever before. Many boomers assume that Gen Y and Millenials don’t want to work hard—that isn’t true. But they are looking for more than just a salary. They want work-life balance and greater purpose. If you can effectively articulate your company’s vision and mission, you’ll get a commitment that will knock your socks off.
High Demand for Natural Leaders
In the past, companies nurtured and honed management skills for years and even mediocre talent could achieve a middling competency before assuming leadership. But leaned-out organizations gave up training a long time ago and future generations will find themselves escalated into jobs faster and with less training than ever before. This doesn’t mean they aren’t capable—this is the most educated generation in history—it just means that many will learn and make mistakes on the company’s dime. And the ones who are good—intuitive leaders who pursued their own training—will be in even more demand.
Rise of the Contract Nation
Over the next five years, the increasing use and engagement of contract workers could drive costs up—or down—depending on how savvy companies use their workforce. Over the past two years we’ve seen a vast increase in the number of contract/temporary workers in marketing and management roles. This used to be a common occurrence in IT and creative positions, but now permeates all roles. Partially, it’s a reflection of the “free agent” mentality—those who eschew corporate loyalty for independence—but more commonly these days it is companies utilizing a piece-work contract approach to increase productivity and decrease long-term employment costs. Is it good or bad? That’s to be determined—but this is one trend that will definitely affect all of our futures.
Bruce Powell is managing partner at IQ Partners in Toronto and one of 17 recruitment professionals who advised Marketing on its Salary Benchmarks reporting