Attracting and retaining the workforce of the future

To help answer this question, Mercer and the Ontario Society of Professional Engineers (OSPE) have worked in partnership to produce the 2017 Mercer OSPE National Engineering Compensation Survey. With a legacy of over 60 years, the survey is a powerful tool for understanding compensation for a range of engineering specialties across six levels of responsibility.

In Ontario specifically, this year’s survey included data from 183 companies, representing more than 11,000 engineers. Improvements in the Canadian economy allowed for base pay rates to rise modestly for engineers in 2017 versus 2016. When Mercer looked across the companies that provided data to the survey in Ontario over five of the last six years, engineers in professional positions (levels A to C) saw increases between 2.5 and 4 per cent, and greater than the Consumer Price Index of 1.2 per cent. However, economists project that the economy will slow over the coming years and that 2 per cent GDP growth will be the new normal. What other mechanisms will organizations that employ engineers be able to leverage to attract and retain talent?

INCENTIVES

As we look to incentives as a way to entice employees into the profession, we notice that pay is heavily weighted to guaranteed pay or base salary, especially in Ontario (see Figures 1 and 2). And how does this stack up against the market at large? When referencing the robust 2017 Canada Mercer Benchmark Database, made up of data from almost 800 organizations, we see the short-term incentive package for engineers falls short, especially at the more junior levels. In the general market, professionals on average receive short-term incentives of approximately 11 per cent of their base salary, higher than the comparative levels of engineers in the 2017 Mercer OSPE National Engineering Compensation Survey. Outside of pay, what should companies consider in order to stay ahead of changing market dynamics?

Figure 1: Pay mix of total cash compensation by Canadian region

Figure 2: Short-term incentive eligibility, receivership and as a per cent of base salary in Ontario

A CHANGING WORKFORCE

As baby boomers retire, we continue to see the millennial generation increase their ranks within companies in the Mercer OSPE National Engineering Compensation Survey (see Figure 3). How will this impact the work environment and arrangements between company and employee? What is clear is that employees are seeking more flexible and personalized work arrangements. Globalization and technology are making the world smaller as well as shaping employees’ expectations of when and how they want to work. It is important to understand what is most valued by employees in our changing workforce. Based on findings from Mercer’s 2017 Global Talent Trends Study, 55 per cent of employees want their company to offer more flexible work options to help create work/life balance. This is interesting, considering that almost 35 per cent of organizations that provided turnover data within the 2017 Mercer OSPE National Engineering Compensation Survey indicated that work/life balance issues were a rationale for voluntary turnover, which impacts the professional levels more significantly.

Figure 3: Generational mix in Ontario

Considering the findings above, how are companies adapting and creating this much sought-after flexible work culture? Fifty-seven per cent of companies in Canada have workforce flexibility policies in place, but only 30 per cent say it is a core part of their value proposition. Additionally, approximately one in three companies offer flexible work arrangements only on an ad-hoc basis. Employees were also asked about their experiences with flexible working in practice. Employees in Canada generally note support from their managers and from their colleagues. However, one in three employees in Canada reported they requested a flexible work arrangement in the past and were turned down, and half expressed concern that working part-time or remotely would negatively impact their opportunities for promotion. Progress is certainly being made, but possibly not fast enough for employees. What are the biggest priorities when determining where to work and create a lasting career? After taking pay out of the equation, the ask is clear: more time off or more flexible ways to spread their time off, as well as working fewer hours for less pay (see Figure 4).

Figure 4: Workplace flexibility findings for Canada from Mercer's 2017 Global Talent Trends Study

How will your company adapt to the workforce of the future?

The Mercer OSPE National Engineering Compensation Survey helps establish meaningful criteria for engineering pay levels for the benefit of both engineers and employers of engineers. Compensation and workforce metrics data for over 24,000 engineers nationally across six engineering responsibility levels and 14 job types were collected from 242 organizations in both the private and public sector. The survey results are available in PDF and in an online format through Mercer WIN, allowing employers to assess their organization’s competitive position and analyze market data. The design and implementation of the survey was overseen by an advisory committee comprised of representatives from industry as well as the engineering and human resources communities. The committee ensures that the survey remains a current and reliable resource on compensation for engineers across Canada. Employers can order the 2017 Mercer OSPE National Engineering Compensation Survey by contacting Mercer at imercer.com/engineering, 800-333-3070, or info.services@mercer.com. OSPE members can access a complimentary copy of the member market compensation summary online at www.ospe.on.ca.


Mark Bowling is a senior associate in Mercer’s Career Information Solutions business.

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