The ultimate goal of PGN HR’s market study is to determine the client's external competitiveness position within the "defined labor market," not against the universe. Our actions seek to support an organization's business strategy of either operational excellence, market dominance, or product leadership. We deliver our market study results through a six-step process.Elena Mason, CCP, SPHR, Prudential Global Network
Step I — Finalize Compensation Philosophy. The discussions we carry out and finalize about the compensation philosophy in the earlier part of the project is used as guiding principles for the market study. This powerful statement guides our actions for the next steps.
Step II — Define Labor Market (Target Comparison Market). Curating peer organizations means inclusion of criteria and parameters that are directly linked to the organization's core services and market competition conditions. An example of criteria and parameters is shown below:
Step III — Identify and Finalize Benchmark Jobs. PGN HR works with the client's human resources leadership in selecting the benchmark jobs that will be used for comparison. These jobs stand as formal representatives for specific classification or job family. Benchmark jobs must be generic enough that comparable jobs are available in the market. If a job is unique and the incumbents is an individual contributor, we may opt for internal comparison in a sense that the job will be slotted based on the level of work complexity alone, that is to say, without external analysis.
Step IV — Determine and Finalize Data Collection Method PGN HR recommends both primary research method and secondary research method for data collection. The primary research involves developing survey materials and collecting data directly from participants. Whereas the latter involves the use of reputable published data.
Step V — Conduct Statistical Analysis. The statistical tests that we use include descriptive and inferential such as, measures of central tendencies, measures of variability and measures of association. We define external competitiveness as 95% confidence level, calculating the upper and lower boundaries for each job class. The result of this step is the market composite.
Step VI — Convert Market Data into Internal Structure. When converting the market data into internal structure, we use our proprietary statistical tests and method which involves exponential regression analysis, Kendall's Tau, and Compounded Salary Growth Rate or (CSGR).
The author of this article, Elena Mason, CCP, SPHR, is the CEO of Prudential Global Network.
For further information about our strategy for defining labor market, please reach out to our industry experts.