Compensation trends and strategies for 2017 trends for 2017...© 2016 Korn Ferry. All rights reserved 2 Contents 1 ECONOMIC FORECASTS FOR 2017 3 2 SALARY FORECASTS FOR 2017 13 3 WHAT’S

Compensation trends and strategies for 2017

September, 2016

© 2016 Korn Ferry. All rights reserved 2

Contents

1 ECONOMIC FORECASTS FOR 2017 3

2 SALARY FORECASTS FOR 2017 13

3 WHAT’S TRENDING IN TALENT ACQUISITION 31

4 APPENDICES 47

1Economic forecasts for 2017


-4

-2

0

2

4

6

8

10

India China Mexico U.S. U.K. Canada Euro Zone Japan Brazil

Real GDP

2015

2016f

2017f

annual % change

Source: Scotiabank Economics.

Forecasts as of August 3, 2016

Global growth remains moderate


Global Growth Remains Moderate

-4

-2

0

2

4

6

8

10

India China Mexico U.S. U.K. Canada Euro Zone Japan Brazil

Real GDP

2015

2016f

2017f

annual % change






-5

-4

-3

-2

-1

0

1

2

3

4

B.C. Alberta Saskatchewan Manitoba Ontario Quebec Atlantic Canada

Real GDP

2015

2016f

2017f

annual % change

Shifting regional growth performance




-5

-4

-3

-2

-1

0

1

2

3

4

5

04 06 08 10 12 14 16

Real GDP

y/y % change

Canada

United States

forecast

Canada benefits from a strengthening US recovery


Source: Bank of Canada, Scotiabank Economics.


0

25

50

75

100

125

150

0.6

0.7

0.8

0.9

1

1.1

1.2

11 12 13 14 15 16 17

Canadian Dollar

CADUSD WTI Oil (US$/bbl)

WTI Oil(RHS)

Canadian Dollar

forecast

Moderate global growth tempers commodity prices and the C$




0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2010 2011 2012 2013 2014 2015 2016f 2017f

Canadian Employment

annual % change

Moderate employment gains




-2

-1

0

1

2

3

4

06 07 08 09 10 11 12 13 14 15 16 17

Inflation

forecast

monthly % change

Total CPI

Core CPI

Inflation still restrained




0

1

2

3

4

5

6

04 06 08 10 12 14 16 17

Central Bank Rates

%

Fed Funds Rate

BoC Overnight Rate

forecast

Bank of Canada moderate increase


Economic summary

Steady as she goes!

Clear skies or the calm before the storm?

2% and steady

Inflation GDP growth Exchange rate

Improving to 2% - 2.5% except for the Atlantic provinces

Employment growing slowly

Non-oil exports improving

Steady or strengthening to $0.8

2Salary projections for 2017


699 organizations were surveyed in June and July 2016

63%Industrial

N=263

21%Financial

N=85

33%Broader Public

N=136

66%

17% 17%

37%

0%

10%

20%

30%

40%

50%

60%

70%

Industrial Financial Pure Public Broader Public

N=461 N=117 N=121 N=260

Note: 699 participating organizations is the sum of industrial, financial and pure public only. Broader public is the sum of pure public

plus those industrial/financial organizations which also qualify as public organizations.

% o

f p

art

icip

ati

ng

org

an

iza

tio

ns

Survey participants – by sector


13% 14%

9%

2%

46%

10%

4%2% 1%

0%

10%

20%

30%

40%

50%

BritishColumbia

Alberta Saskatchewan Manitoba Ontario Quebec Maritimes* Nfld/Labrador Territories

N=88 N=68N=98 N=60 N=321

699 organizations were surveyed in June and July 2016

% o

f p

art

icip

ati

ng

org

an

iza

tio

ns

N=16 N=30 N=14N=4

Survey participants by geography

Note: * Maritimes projections are for NS, NB and PEI


1.4% 1.4%1.5%

1.1%

1.3%

1.6% 1.6%

1.8%

1.4%1.5%1.5%

1.6%1.7%

1.3%1.4%

0.0%

0.5%

1.0%

1.5%

2.0%

All organizations Industrial Financial Pure public Broader public

2017 projections 2016 realized 2016 projected

Compensation elements: Structure Sub-sector: Combined Approved & not

Including 0%: Yes Geographies: Combined yet approved: Combined

Sector: Separated Job levels: Combined Revenue: Combined

Range structure movement by sector


1.2%

0.8%

1.5%

1.3%

1.6% 1.6%

1.0%

0.0%

1.7%1.6%

1.5% 1.5% 1.5%1.6% 1.6%

1.2%

0.9%

1.5%

0%

1%

2%

British Columbia Alberta Saskatchewan Manitoba * Ontario Quebec Maritimes** Nfld/Labrador * GTA

2017 projections 2016 projections

National

average 1.4%

Notes: * less than 10 organizations

** Maritimes projections are for NS, NB and PEICompensation elements: Structure Sub-sector: Combined Approved & not

Including 0%: Yes Geographies: Separated yet approved: Combined

Sector: Combined Job levels: Combined Revenue: Combined

Range structure projections by geography


2.2% 2.2%

2.5%

1.8%1.9%

2.2%2.1%

2.5%

2.1%2.2%

2.4%2.5%

2.8%

2.0%

2.3%

0%

1%

2%

3%


2017 projections 2016 realized 2016 projected

Compensation elements: Salary Sub-sector: Combined Approved & not



Base salary movement by sector


1.8% 1.8%

2.2%

1.6%1.7%

2.3%2.2%

2.5%

1.8%

2.1%

0%

1%

2%

3%


2017 approved 2017 not yet approved

23% 77% 20% 80% 9% 91% 37% 63%46%54%


Including 0%: Yes Geographies: Combined yet approved: Separated


Approved vs. not yet approved


2.3%

1.3%

2.2%

2.4%2.3%

2.5%

1.9%

1.4%

2.4%2.3%

2.5%

2.7%

2.5%2.5% 2.5%

1.9%

2.3%

2.5%

0%

1%

2%

3%

BritishColumbia

Alberta Saskatchewan Manitoba Ontario Quebec Maritimes** Nfld.Labrador

GTA


National

average 2.2%


** Maritimes projections are for NS, NB and PEI




Base salary projections by geography


Base salary projections by geography for past 10 years

1

1.5

2

2.5

3

3.5

4

4.5

5

5.5

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Pro

jecte

d b

ase s

ala

ry c

han

ge (

%)

Year

BCAlbertaSaskatchewanManitobaOntarioQuebecAtlanticNationalNL


39%

17%

44%

65%

7%

28%

48%

19%

33%

70%

6%

24%

58%

15%

27%

83%

4%

13%

59%

17%

24%

85%

5%

10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Increases No increases Not decided Increases Freezes Not decided

2017 projections 2016 projections 2015 projections 2014 projections

Base salary range Actual base salary

Compensation elements: Structure & Salary Sub-sector: Combined Approved & not

Including 0%: Not applicable Geographies: Combined yet approved: Combined


Direction


1.4% 1.4%1.5%

1.1%

1.3%

1.9%2.0%

1.9%

1.6%

1.8%

0%

1%

2%


2017 projections including 0% 2017 projections excluding 0%


Including 0%: Yes / no Geographies: Combined yet approved: Combined


Range structure projections including and excluding 0%


2.2% 2.2%

2.5%

1.8%1.9%

2.4% 2.4%

2.6%

2.1%2.2%

0%

1%

2%

3%




Including 0%: Yes / no Geographies: Combined yet approved: Combined


Base salary projections including and excluding 0%


2.3%

1.3%

2.2%

2.4%2.3%

2.5%

1.9%

1.4%

2.5%

2.1%2.4%

2.6%

2.4%2.5%

1.9%

2.3%

0%

1%

2%

3%

BritishColumbia

Alberta Saskatchewan Manitoba Ontario Quebec Maritimes** Nfld/Labrador *


National

average 2.2%


** Maritimes projections are for NS, NB and PEICompensation elements: Salary Sub-sector: Combined Approved & not

Including 0%: Yes / No Geographies: Separated yet approved: Combined


Base salary projections by geography including and excluding 0%


Source: Hay Group PayNet Landscape

2.2%

8.0%

4.8%

3.0%

1.7%

2.5% 2.7%

7.0%

2.5%3.0%

8.0%

10.0%

2.1%2.4%

7.0%

3.0%

1.5%

2.5% 2.5%

7.6%

10.8%

2.0%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

11%

Canada Brazil Mexico U.S. France Germany Italy Russia U.K. Australia China India Japan


N/AN/A N/AN/A

Global base salary projections

3What’s trending in talent acquisition


Agenda

1 WHO IS FUTURESTEP? 29

2 CANDIDATES ARE IN THE DRIVER’S SEAT 31

3 SMART DATA TO SOURCE AND DEVELOP TALENT 34

4 TALENT FROM WITHIN WILL BE REALIZED AS A TRUE ASSET 37

5 EMBRACING DIVERSITY PROVING KEY TO GROWTH 40


Futurestep talent solutions

Internal

Mobility

Talent Acquisition

Advisory

Audit, benchmark and diagnose

talent acquisition strategy

Talent Communications & Employer

Branding

Define, launch and sustain

the employer brand

On Demand

Web-based solutions for:

Internal

mobility

Assessment

& development

Professional

Search

From single search to multiple professional level

hires

Project

Recruitment

Volume recruitment with defined delivery time and number of hires

Recruitment Process Outsourcing

Ongoing volume hiring and outsourced process management

Talent Acquisition

Talent Consulting


1. Candidates are in the driver’s seat


Talent pool is getting smaller

Increasing need for specialized, hard-to-find skill sets

Qualified candidates have multiple job offers

Job security is no longer a major selling point

Young professionals have different and specific criteria for potential employers

5%6%

26%

63%

PromotingQuickly

Offering HigherSalaries

LeadingEmployer Brand

OrganizationalCulture

What’s the top criteria that gives a company a

competitive advantage for hiring the best in the

industry?

The talent shortage and associated challenges


Burger King was going through a period of significant growth and culture change, generating an increased need for hiring.

With career-driven graduates as the target candidates, Futurestep worked closely with Burger King to develop and implement its ‘Bring It’ campaign to reach this demographic and attract them into vital roles within the organization, from in-restaurant positions to corporate careers all over the world.

Revamped EVP to align with culture

Redefinition of Burger King’s employer brand for campus, restaurant, and professional roles to encompass the meteoritic, fast-paced culture with advancement opportunities

Mobile-optimized career website with ATS integration, image library, video series and toolkits are currently in development

Result: 50% increase in graduate applications

Burger King and promoting career development

2. Smart data to source and develop talent


Key Performance Indicators

Quality of hire

Retention

Impact of talent on business performance

Recruitment process efficiency

Workforce planning

Assessment

Talent acquisition metrics

Time to hire Cost per hire Quality of candidate

Number of hiresInterview to offer ratio

Source of hire

Offer to acceptance

ratioAttrition rate

Number of applications

Employee referrals to hire

ratioJob views Cost per click

Metrics for evaluating success


Innovative tools and resources required

An integrated and consolidated approach enables more informed decision

making.

Proprietary

Reporting

Assessment

Analytics

Process

Analytics

SLA & KPI

Reporting

Self

Service

Talent

CommunityCRM

Candidate

Portal

Applicant

Tracking

System

Background

Check

System

HRIS

Job Marketing

System

Integrated Talent Acquisition Performance Dashboards and Reporting

New Hire

Quality

Survey

System

Applicant

Tracking

System

Candidate

Portal

3. Talent from within will be realized as a true asset


52 % of young talent (Gen Y) said the ability to rise rapidly was the main attraction when choosing their employer.

The average cost of finding and hiring someone from outside the company is 1.7 times more than an internal hire ($8,676 vs. $15,008), reports the Saratoga Institute

People leave companies – especially if they aren’t given opportunities to advance their careers. At least that’s wat 7,350 LinkedIn members said in an “exit survey” of professionals.

Investing in highly engaged employees drives profitability


Internal mobility initiatives still missing

4. Embracing diversity proving key to growth


Firms with diversity in leadership are 45%

likelier to report a growth in market share

over the previous year and 70% likelier to

report that the firm captured a new market.

(Harvard Business Review, 2013)

Companies in the bottom quartile (of the

data set) for gender, ethnicity and race

diversity are statistically less likely to

achieve above-average financial returns.

(McKinsey, 2015)

Data continues to support the impact of diversity


Organizations making a difference

We have seen a number of organizations adopt a strategy to encourage women in STEM careers and make significant progress.

27% of workforce - female

-% of women on their SLT is highest ever at 27.2%

Rich community of Employee Resource Groups and Employee Networks to foster D & I

STEM events to attract middle to high-school female STEM

Paid internships worldwide

Microsoft Verizon Ericsson


Managers receive training to raise awareness of bias

Management compensation tied to increasing women in tech and people of color

Skill based training programs for women

Female exec’s speak at STEM events to attract middle to high-school female STEM



Target 2020 = 30%

Job descriptions – gender neutral language

Skill based training programs for women

Sponsors Robogals – educational org. designed for primary and secondary youth


4Appendices


1.5%1.7%

1.9%1.7%

1.3%

0.9%

2.0%

1.3% 1.4% 1.3% 1.2%

1.9%

1.3%

0.0%

1.0%

2.0%

3.0%

Note: * Less than 10 organizations reporting base salary range projections

1.7% 1.7%

4.4%

1.0% 1.2%

0.0%

1.9%1.6%

0.9%

1.6% 1.4% 1.4%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

National

average 1.4%

National

average 1.4%

Range structure projections by sub-sector


2.4% 2.4% 2.3% 2.2%2.5%

2.0%2.5%

2.6%

2.1% 1.8%

1.5%

2.6%

1.9%

0%

1%

2%

3%National

average 2.2%

National

average 2.2%

2.6%2.4%

2.2%

1.7%1.9%

1.0%

2.7%2.4%

2.2% 2.1% 2.3% 2.1%

0%

1%

2%

3%

Base salary projections by sub-sector

Note: * Less than 10 organizations reporting base salary projections


2.1% 2.2% 2.2% 2.1% 2.2%

2.4%2.5% 2.5% 2.4%

2.2%

0%

1%

2%

3%

Executive/seniormanagement

Middle Mgmt./seasonedprof.

Supervisory/juniorprofessional

Clerical/operations (non-union)

Clerical/operations(union)


National

average 2.2%



Sector: Combined Job levels: Separated Revenue: Combined

Base salary projections by job level


2.1% 2.1% 2.2%2.3%

2.2% 2.1%

0%

1%

2%

3%

Up to $99MM $100 - $249MM $250 - 499MM $500 - 999MM $1 - $2.49B $2.5B and above

National

average 2.2%



Sector: Combined Job levels: Combined Revenue: Separated

Base salary projections by revenue group


1.4%1.5%

2.3%

2.0%

2.2%

2.5%

3.1%3.0%

0%

1%

2%

3%

2017 Canada 2017 U.S.

Industrial

range

Industrial

base salary

Financial

range

Financial

base salary

Compensation elements: Structure & salary Sub-sector: Combined Approved & not



Range structure and base salary projections – Canada vs US


2.2%

1.5%

2.4%

1.3%

2.3%

2.5%

1.9%

0.9%

2.5%

1.3%

2.6%2.7% 2.7%

2.4%

1.5%

1.9%

0.2%

2.1%

2.6%

2.2%2.3%

1.7%

0.9%

0%

1%

2%

3%

British Columbia Alberta Saskatchewan Manitoba Ontario Québec Maritimes** Nfld/Labrador

Industrial Financial Broader public



Sector: Separated Job levels: Executive/sr. mgmt. Revenue: Combined

Notes: * Insufficient data

** Maritimes projections are NS, NB & PEI

*

Base salary projections for executive/senior management


2.3%

1.6%

2.4%

1.5%

2.3%2.5%

1.8%

0.6%

2.4%

1.6%

2.8% 2.7%2.6%

2.4%

1.5%

2.2%

0.6%

2.3%2.5%

2.2% 2.3%

1.7%

0.9%

0%

1%

2%

3%

4%

BritishColumbia

Alberta Saskatchewan Manitoba Ontario Québec Maritimes** Nfld/Labrador




Sector: Separated Job levels: Middle mgmt./season prof. Revenue: Combined

*



Base salary projections for middle management/ seasoned professional


2.3%

1.6% 1.6%1.5%

2.3%

2.5%

2.1%2.0%

2.4%

1.6%

3.0%

2.7%2.6%

2.4%

1.5%

2.2%

0.8%

2.4%2.5%

2.3%2.4%

1.8%

0.9%

0%

1%

2%

3%

BritishColumbia





Sector: Separated Job levels: Supervisory/jr. prof. Revenue: Combined

*



Base salary projections for supervisory/junior professional


2.2%

1.6%1.5% 1.5%

2.3%

2.5%

1.9%

1.6%

2.4%

1.9%

2.7% 2.7%2.6%

2.9%

1.5%

2.2%

0.7%

2.3%

2.5%

2.2%

2.6%

1.8%

0.9%

0%

1%

2%

3%

BritishColumbia





Sector: Separated Job levels: Clerical/Ops (non-union) Revenue: Combined

*



Base salary projections for clerical/operations (non-union)


2.2%2.3%

2.6%

1.9%2.0%

2.2%2.1% 2.1%

1.9%

2.5%

3.1%3.0%

2.9%

2.3%

2.7%

2.4%

2.0%1.9%

2.7%

1.8%

1.3%

0%

1%

2%

3%

BritishColumbia





Sector: Separated Job levels: Clerical/Ops (Union) Revenue: Combined

* *



Base salary projections for clerical/operations (union)

*


2.2%2.3%

2.3%

2.2% 2.2%

2.5%2.4% 2.4% 2.4%

1.9%1.9%

2.2%2.2% 2.2%

2.3%

0%

1%

2%

3%


Middle mgmt./seasonedprof.






Including 0%: Yes Geographies: British Columbia yet approved: Combined

Sector: Separated Job levels: Separated Revenue: Combined

National

average 2.2%

Note: * Insufficient data

Base salary projections for British Columbia


1.5%1.6% 1.6% 1.6%

2.3%

1.3%

1.6% 1.6%

1.9%

2.5%

0.2%

0.6%

0.8%0.7%

2.7%

0%

1%

2%

3%








Including 0%: Yes Geographies: Alberta yet approved: Combined



National

average 2.2%

Base salary projections for Alberta


2.4% 2.4%

1.6% 1.5%

2.6%2.6%2.8%

3.0%

2.7%

3.1%

2.1%2.3%

2.4%2.3%

2.4%

0%

1%

2%

3%

4%








Including 0%: Yes Geographies: Saskatchewan yet approved: Combined



National

average 2.2%

Base salary projections for Saskatchewan


2.3% 2.3% 2.3% 2.3%

2.0%

2.7%2.6% 2.6% 2.6%

3.0%

2.2% 2.2%2.3%

2.2%

1.9%

0%

1%

2%

3%



Supervisor/juniorprofessional





Including 0%: Yes Geographies: Ontario yet approved: Combined


National

average 2.2%

Base salary projections for Ontario


2.5% 2.5% 2.5% 2.5%

2.2%

2.4% 2.4% 2.4%

2.9% 2.9%

2.3% 2.3%2.4%

2.6% 2.7%

0%

1%

2%

3%








Including 0%: Yes Geographies: Québec yet approved: Combined


National

average 2.2%

Base salary projections for Québec


National

average 2.2%

1.9%1.8%

2.1%

1.9%

2.1%

1.5% 1.5% 1.5% 1.5%

1.7% 1.7%1.8% 1.8% 1.8%

0%

1%

2%

3%







*


Including 0%: Yes Geographies: Atlantic Canada yet approved: Combined




Base salary projections for Maritimes **


1.1%

0.7%

0.9%

1.3%

1.8%

1.2%

1.7%

1.2%

1.7%

0.6%

1.0%

1.4%

1.8%

1.5%1.4%

1.5% 1.5%

1.3%

1.7%

1.1%

0%

1%

2%

Vancouver Calgary Edmonton Regina Saskatoon Winnipeg GTA Ottawa Montreal HRM


National

average 1.4%




Range structure projections by city


2.4%

1.2%

1.5%

2.3%

2.5%2.4% 2.4%

2.1%

2.5%

1.9%

2.3%2.2%

2.9%

2.6% 2.5% 2.5% 2.5% 2.5%2.4%

2.1%

0%

1%

2%

3%

Vancouver Calgary Edmonton Regina Saskatoon Winnipeg GTA Ottawa Montreal HRM


National

average 2.2%




Base salary projections by city

Documents

Compensation trends and strategies for 2017 trends for 2017...© 2016 Korn Ferry. All rights reserved 2 Contents 1 ECONOMIC FORECASTS FOR 2017 3 2 SALARY FORECASTS FOR 2017 13 3 WHAT’S