An Effective Solution for Your Cost Pains
Pay Costs should be Your Investment
Pay and cash compensation typically make up 50% or more of total company costs. If you need to cut them, such a step should be taken using facts and figures – based on a deep dive analysis. Pay costs are one of your biggest investments and you want to be efficient with their spend. Pure headcount reduction will not help – a change of compensation system and practice is required.
Pay Costs Efficiency Index
We can help you find the monies. We know exactly which stones to turn over. Our unique methodology tells us how much of your pay and cash compensation costs are not well spent. The BDA Pay Costs Inefficiency Index will provide you with a snapshot of your current situation as well as project what your future potential loss is should you not change your practice today. With our modeling, we can also identify future risks. We have been doing these analyses for more than 10 years and know exactly where to look.
What usually causes these inefficiencies?
TO LIST A FEW: A history of exceptions and creeping off-cycle salary increases | Poor incentive scheme design | Lack of a pay policy and/or a grading structure | Too many premiums or allowances without a link to performance
The Time is Now
Today is the best day to change your practice or system. Thanks to the Covid-19 crisis, companies realize they urgently have to be more efficient with cost management. Maybe you too are one of those companies who were very generous and did not pay much attention to the distribution of your pay and cash compensation costs. Come tomorrow, you have a chance to already be on the new path towards business sustainability.
Before you change anything, you should understand your current practice in depth.
What do we offer?
A comprehensive analysis of your compensation system and practice covering:
- External market benchmark
- Internal equity across your organisation
- Job grading (job evaluation of your job catalogue)
- BDA Pay Costs Efficiency Index
- Incentive schemes and allowances (total cash structure)
- Compensation system audit (Corporate Guidelines and CLA)
Customized analyses tailored to specific Client´s needs and typically focusing on:
- Sales incentive schemes
- Blue-collar bonus plans
- Benefits portfolio review
Our unique methodology, that nobody else offers, often reveals results that senior management consider to be significant.
Our Standard Analysis in Detail
Process and Outputs
- Key findings and inefficiencies quantified
- Recommendations for compensation system changes
- Customized outputs (graphs and visuals)
- Market benchmark and ´gap to market´ calculations
- Excels with detailed employee compa-ratios
Inputs. Timing. Pricing
In 4 weeks we will prepare a comprehensive snapshot of your pay costs efficiency and compensation practice in detail.
What do we need from you?
Your decision to go for it and find out for yourself. We will take care of the rest.
How much involvement on your side?
Data collection at the start. Then just sit and listen to our key findings presentation and recommendations.
How much is it?
If you are interested we will be happy to prepare a non-binding offer for you.
A long-time market leader in Consumer Goods faced declining profits due to a slowdown in the market. They decided to reduce headcount but this, however, appeared to be insufficient. They asked BDA to help them find a solution where their pay cost structure would be set to allow for future business growth in succeeding years.
We helped our Client to achieve their business goals, reduce their pay costs by 7.5 % in three years (equal to EUR 4mil), while ensuring zero headcount reduction and zero base salary reduction. Total paymix was changed and BDA Strategic Job Segmentation concept was introduced as one of the solutions applied.
Through our analysis, we typically find “inefficiencies” of 5-10% of total pay and cash compensation costs (before any headcount reductions which might be separately identified).