haygroup presentation

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Hay Group S.A.
2004 European ICT Market - Trends in
RewardHarry Meintassis
Athens, December 2004
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Contents

• Pay in ICT Europe Western Eastern
• What really matters for IT professionals
  Keeping and managing key talent
• Other interesting trends in ICT Labour market

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ICT Labour Market is becoming More Volatile

• Supply under pressure despite large number of
  entrants into work force
• Demand is increasing rapidly for world class
  professionals
• New Operating Models impact on IT processes,
  organisations and jobs Outsourcing, Off-
  shoring

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Trends and Developments in Pay

• Variable pay (i.e. based on performance)
  flexible scheme designs
• Team Based Pay
• Skills and Competency Based Pay
• Focus on Total Reward and Recognition

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The Western European ICT market trends

• Top priority align reward policy with business
  objectives and company strategy
• ICT Managers are rewarded for Technical
  abilities and know-how Behaviors
• The outsourcing is in existence so to maximise
  cost efficiency

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The Eastern European ICT market trends

• Compensation is focused on fixed pay
• Limited opportunity for significant performance
  related pay (bonus)
• Employee benefits is gradually increasing within
  the remuneration packages

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Compensation Western Europe vs. Greece

• Purchasing Power Parities (PPPs) have been
  included in the above calculations

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Compensation Eastern Europe vs. Greece

• Purchasing Power Parities (PPPs) have been
  included in the above calculations

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The composition of the Total Cash Package
Western Europe

• More emphasis is given on variable pay, which
  results in higher on-target bonuses
• Short-term variable pay represents at the Median
  level
• 23-25 of Base Salary for management positions
• 15-18 of Base Salary for middle management
  positions
• 8-10 of Base Salary for non-management positions
• Variable pay policies, aligned with the
  performance of the individual are the most
  appropriate manner in preserving top performers
  in the company

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The composition of the Total Cash Package
Eastern Europe

• Variable pay is low, guaranteed pay remains a
  higher proportion of the Total Cash package
• Short-term variable pay represents at Median
• 12-15 of Base Salary for management positions
• 10-12 of Base Salary for middle management
  positions
• 5-6 of Base Salary for non-management positions

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Key retention drivers HayGroup Study 2004
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What matters most for IT professionals Towards
Total Reward

• Career Opportunity
• Clear career development plan
• Leadership
• Trust the Management
• Coaching
• Active development
• My ideas adopted

• Enjoyment of the Work
• Working on interesting projects
• Job challenge
• Fit with job
• Reward
• Base pay Bonus
• Recognition
• Technical training
• New technologies

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From Static to Flexible and Performance Based
pay

• Hiring Bonuses
• Premium-Paid Hot Skills
• Pay-for-Competencies and Skills
• Fast Track Salary Reviews
• Achievement Bonuses
• Objective-Based Incentives

• Paying Teams
• Profit-Sharing Plans
• Cash Retention Plans
• Equity-Based Retention
• Sabbatical Leave

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Western Europe Outsourcing

• 31 of organisations, including a significant
  proportion of the FTSE 100, find outsourcing a
  useful and cost-effective way to finance and
  resource their IT activities.

• Companies outsourcing supporting ICT activities
  and invest in high added value processes and
  jobs.

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Flexible Working Systems

• 86 of Western European IT companies offer
  flexible working to IT staff to some degree
• Flexible Working is on the increase.
• It gives employees more control
• It allows people to match choice against their
  lifestyle
• It can give a competitive edge
• It enables effective resource management

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Western Europe Work-Life Balance

• In 75 of companies Work is confined to
  regular hours of employment
• 15 of companies Work demands frequently
  encroach upon social life and activities
• 10 of companies Work demands severe
  restrictionson employees life outside work

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Hay Group S.A.
2004 European ICT Market Trends in Reward
Athens, December 2004