Keep This on Your Recruitment Radar in 2018, What’s Trending Today in Compensation

By J. James O’Malley, Former Andersen National Director of Experience Recruiting,

Jim joined TalentRISE as a partner in 2012 to focus on clients’ executive leadership challenges by leveraging his passions for executive search, on-demand recruiting, workforce planning and analytics and executive coaching. jimomalley@talentrise.com

As someone who specializes in executive search, I’m often asked to prognosticate about trends that will influence hiring. While there are many factors that will impact your ability to attract, engage and hire the best talent, particularly within professional services firms, that one that potentially has the greatest impact of all will be compensation.

On its face, my focus on compensation may seem counter-intuitive. It may also seem like a yawner as overall U.S. salary budget increases (for all jobs, excluding very specialized, in-demand positions) are pegged at approximately 3.2%, and flat compared to last year. This phenomenon can largely be attributed to employers shying away from institutionalizing across-the-board pay increases that end up as fixed costs, as reported in this article titled “Your Chances of Getting a Bigger Raise or Bonus in 2018 Just Went Down”. Globally, according to Aon, the pay picture is somewhat rosier with 84% of surveyed countries planning to spend more.

However, even within this context, I stand firm. For 2018, my mantra is “follow the money”. Here’s my best advice for what you need to do when hiring talent in the coming months:

Scan external markets. Pay especially close attention to talent supply and demand on several levels: (1) within your industry (2) for specific positions within your business units and (3) for the geographic regions in which you operate. Like many of my clients, you may uncover surprises within various niches that impact your compensation competitiveness. Subscribe to professional salary reviews; use compensation-related info from exit interviews; check out Glassdoor and other similar sites for insights and use your external recruitment consultants as a sounding board about pay practices. Professionals in my industry - and those running your internal recruitment function - ought to be able to provide an up-to-the-minute snapshot of total compensation for specializations, by geography. If not, you’re probably not working with the right consultants or your internal talent acquisition team doesn’t have the time, resources or skills that you need.

Invest time in internal education. Share the information gained about compensation with all hiring managers, especially as it relates to their functional areas. I have found that hiring managers often have no idea or, alternatively, outdated ideas about realistic pay scales. Armed with “real” and current information, they will gain a much better understanding of the type of hire they can afford. As the saying goes, “you get what you pay for” so having realistic, data-based expectations is critical to getting the best talent possible at the right price.

Monitor recruitment-related regulations in your city/state. There is a growing movement to prohibit employers from asking job candidates about their salary history in interviews or on applications in an effort to eventually eliminate pay inequalities between men and women and for minorities. The regulatory landscape is shifting rapidly but already New Orleans, New York City, San Francisco and Philadelphia have adopted this law or it is about to go into effect. States on the list include Oregon, Massachusetts and Delaware as well as Puerto Rico. This is one to really watch in 2018. My firm is doing a live poll on this issue - to participate, go here.

Finally, consider the connection between compensation practices and employee behaviors. More than a handful of recent business headlines have focused on corporate misdeeds where compensation was the culprit. Compensation practices, for instance, motivated a prominent bank’s frontline staff to open up over 3.5 million bogus customer accounts. Knowing that money motivates people in both good and bad ways, conduct a holistic review of your total rewards package and look for potential problems before they become serious. This just makes good business sense. Admittedly, there are no guarantees that bad stuff won’t occur but mitigating the risk now, as opposed to potentially dealing with scandals later, is well worth the effort.


Yes, there is a lot to consider in 2018 regarding compensation. Some of what I’ve advocated above may require a reaction given the legal consequences. Others (such as re-tooling compensation to avoid rewarding unwanted behavior) may seem “optional” or lower on the scale of priorities. I’d warn against that, however. Compensation is a powerful tool, whether it’s used to hire, motivate and retain the best people. It’s also possibly your single largest business expense. Now, more than ever, make a resolution to get it right in 2018.

Happy New Year, everyone!