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June 08, 2016
Pay practices for 'hot jobs' critical to your organization

By Chris Ceplenski, Managing Editor, News

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'Hot jobs' is a term HR professionals are certainly familiar with, but what does it really mean? And how can you determine whether these hot jobs are critical to your organization? Finally, what kinds of rewards or compensation should you be giving those employees in hot jobs who are critical to your company?

At the WorldatWork Total Rewards Conference session, a team of experts provided insights and answers to these questions.

A job is defined as 'hot' when "the demand for skilled talent currently outstrips the labor supply," explained Jeremy Feinstein, managing director of Empsight International LLC. Feinstein outlined the "life cycle" of a hot job as consisting of the following stages:

  1. New business models, regulations, and technologies emerge.
  2. New jobs and skills are required by the labor market.
  3. Hot jobs emerge with premium pay.
  4. Employees receive education and training for hot skills. (Feinstein notes that at this stage, employers first provide internal on the job and industry specialized company training. Eventually external training—in the way of trade associations and degree/certification programs—emerges to respond to meet the need.)
  5. Demand for hot skills are met and hot jobs are integrated into mainstream benchmarks.

Feinstein then asked attendees to identify what they see as hot jobs at their organizations before revealing recent Empsight research findings. It turns out that most often mentioned job titles/groups provided by attendees were one in the same with the three hottest jobs according to Empsight: data scientists, IT security, and digital marketing specialists.

Next, Greg Stoskopf, managing director of Deloitte Consulting established an important distinction between all hot jobs and those that are one of an organization's critical workforce segments, emphasizing that the latter group is specific to the organization.

How do you determine your critical workforce segments? The process of "identifying the key talent segments that produce the most value will enable the organization to make investments that yield the greatest return," Stoskopf explained. The critical workforce segments of each individual organization consist of "highly skilled individuals who drive disproportionate value."

Sheila Sever, CCP, senior manager at Deloitte, then stepped in to provide attendees with various options to address compensation for hot jobs.

Among several strategies Sever presented, is to provide separate line item premium pay for a hot skill needed on a temporary basis—she provided the example of the demand for COBOL programmers needed to prepare for Y2K, a demand that diminished quickly after 2000 arrived.<.p>

Another popular strategy is to provide short-term incentives above and beyond the normal award the job would receive if it weren't a hot job or critical workforce segment role, Sever noted.

And how about those hot jobs that fall into critical workforce segments at your organization? Sever provided the following suggestions:

  • Target base pay at the 60th percentile to the 75th percentile (through higher pay grades or higher placement in the range)
  • Provide short term incentives targeted at the 75th percentile (through higher tier/target levels or discretionary awards)
  • Provide long-term incentives, irrespective of grade level and whether the job is normally eligible to receive
  • Provide retention awards as needed to retain talent and meet organization objectives

Chris CeplenskiChris Ceplenski Chris Ceplenski is Managing Editor, News. Mr. Ceplenski also manages BLR’s human resources, employment law, and compensation and benefits newsletter content. He has authored hundreds of articles that have appeared in BLR print and on Prior to joining BLR in 1999, Mr. Ceplenski worked as an editor for a book producer and literary agency and as a college writing instructor. Mr. Ceplenski received his B.A. from Eastern Connecticut State University and an M.A. in English from Clarion University of Pennsylvania.

Questions? Comments? Contact Chris at for more information on this topic.

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