Korn Ferry · NYSE:KFY

Korn Ferry — Pay Forum 2016

52 slides from Korn Ferry's conference presentation, May 2016

Slide 1: Pay Forum 2016
Pay Forum 2016 May 2016 «7 KORN FERRY" | HayGroup
Slide 3: It isn't rocket science, but it is science
IT ISN’T ROCKET SCIENCE, BUT IT IS SCIENCE. Korn Ferry knows more about human performance in the workplace than any other organization. Engagement data on 7,000 6M colleagues professionals 100,000 Assessment people One candidate developed in our Roots dating data on placed every leadership back to 3
Slide 4: Our solutions are aligned to this framework
Our solutions are aligned to this framework ORGANIZATION PEOPLE STRATEGY EXECUTION AND ASSESSMENT AND SUCCESSION ORGANIZATIONAL DESIGN TALENT STRATEGY AND WORK DESIGN EXECUTIVE SEARCH AND RECRUITMENT REWARDS AND BENEFITS LEADERSHIP DEVELOPMENT © 2016 Korn Ferry. All rights reserved 4
Slide 5: A total approach to talent
A total approach to talent Korn Ferry Executive Korn Ferry Hay Group Korn Ferry Futurestep Search helps you attract helps you align your delivers professional the best executive talent organization to your people talent that builds up for moving your company – developing, engaging, leadership. in th
Slide 15: Global Salary Forecast 2016 – Real Increases
Global Salary Forecast 2016 – Real Increases Latin America Regional average -1.4% Africa Regional average 1.6% Middle East Regional average 3.8% North America Regional average 2.0% Europe Regional average 2.3% Asia Regional average 4.2% Pacific 1.5% Regional average © 2016 Korn Ferry. All rights res
Slide 16: Global Salary Forecast 2016 Asia/Pacific
Global Salary Forecast 2016 Asia/Pacific  In Asia, salaries are forecast to increase by 6.4% – down 0.4% from last year. However, real wages are expected to rise by 4.2% – the highest globally.  The largest real wage increases are forecast in Vietnam (7.3%), China (6.3%) and Thailand (6.1%).  In
Slide 17: Key points global salary forecast 2016
Key points global salary forecast 2016 Globally Forecasts remains Economic turmoil Global salary rise is highest in positive in Europe impacting workers three years. Real wages up 2.5%, as pay Salaries in Europe have been buoyed by the improving in Latin America rises combine with low inflation. Wag
Slide 20: Client Forecast and Movements – Fixed Annual Reward
Client Forecast and Movements – Fixed Annual reward 5.0% Fixed Annual Reward Annual Movements (%) 4.5% 4.0% 4.0% 3.9% 3.8% 3.5% 3.5% 3.5% 3.4% 3.0% 3.0% 3.0% 3.0% 2.9% 2.7% 2.5% 2.5% 2.0% 2012 2013 2014 2015 2016 Client Forecast Client Movements Hay Group Forecast © 2016 Korn Ferry. All rights reser
Slide 21: Nominal and Real Salary Increases over the last 5 years
Nominal and Real Salary Increases over the last 5 years 5% 4.3% 4.0% 4% 3.8% 2.7% 3% 2.5% 2.5% 2.50% 1.6% 2% 1.3% 0.9% 0.7% 1% 0.4% 0% 2012 2013 2014 2015 2016 2017* Nominal increases Real increases © 2016 Korn Ferry. All rights reserved 21
Slide 22: Pay Forum Spot Survey
Pay Forum Spot Survey Average Salary Increase For 2015 Remuneration review 0% 2% 4% Leisure & Hospitality 3.3% Consumer Durables 3.0% Public Sector, NFP & Education 2.8% Financial Services 2.5% Telecommunications & Media 2.5% FMCG 2.5% Transportation 2.5% Other 2.3% Median: 2.3% Utilities 2.3% Avera
Slide 23: Pay Forum Spot Survey
Pay Forum Spot Survey Average Salary Increase Forecast for 2016/2017 0% 2% 4% Leisure & Hospitality 3.0% Consumer Durables 3.0% FMCG 3.0% Public Sector, NFP & Education 2.8% Financial Services 2.5% Other 2.5% Professional Services 2.5% Chemicals 2.5% Median: 2.5% Transportation 2.5% Average: 2.2% Ut
Slide 25: Greatest salary differentials still in WA
Greatest salary differentials still in WA TAR Percentage difference from national average Regional (0.0%) NT (0.3%) QLD Regional (14.9%) Brisbane (-1.3%) Regional WA SA (-2.7%) Regional (1.0%) NSW Perth Sydney (4.3%) (-2.3%) Adelaide (-5.8%) VIC Regional (-1.9%) Melbourne TAS (-1.9%) (-7.1%) © 2016
Slide 26: Pay difference by sector
20% 40% 80% 100% 120% 60% 0% 123% Oil & Gas 119% All market = 100% Mining 110% Construction 110% Industrial Metals Pay difference by sector 108% Utilities 105% Business Services 99% Transportation 99% Chemicals 98% Industrial Goods 97% Building Materials 97% Financial Services 97% High Technology To
Slide 27: Pay difference by sector
20% 40% 60% 80% 100% 120% 0% 96% Telecommunication & Media 95% All market = 100% Pharmaceutical & Healthcare 95% Services 94% 95% FMCG - Food & Drink 95% 95% Leisure & Hospitality 95% Pay difference by sector Agriculture, Forestry & 95% Fishing 95% 94% Professional Services 90% FMCG - Other 94% 94%
Slide 28: Pay differences by job families
20% 40% 60% 80% 100% 120% 140% 0% 130% Mining Operations (MO) 135% 107% Engineering (EG) 108% 106% Production (PR) 105% 105% Project Management (PM) 105% 101% Information Technology (IT) 101% 101% Logistics/Supply Chain (LS) 101% 100% Pay differences by job families Administration/Support/Service (A
Slide 29: Hot Jobs
Hot Jobs AVAILABILITY OF CANDIDATES IN THE MARKETPLACE  In our data submission survey, 41% of organisation report a scarcity of candidates in the market ROLES IN DEMAND Premium Premium No NoPremium Premium IT Marketing – Digital & E-commerce IT Marketing – Digital & E-commerce Engineering – All Typ
Slide 30: Hot Jobs
Hot Jobs HOW DO ORGANISATIONS DEAL WITH CANDIDATE SCARCITY  Majority of organisation maintain their current pay policy (i.e. do nothing)  If organisations do attempt to address candidate scarcity through remuneration, we commonly see: • Higher STI • Higher Fixed Pay • Recognition/Sign-on Bonuses •
Slide 32: Pay Forum Spot Survey
Pay Forum Spot Survey Organisations Reviewing Link Between Performance & Reward Industries reviewing the link between pay 120% & performance:  Construction 100%  Consumer Durables 80%  Retail 65%  Public Sector & Education 60%  Business Services 40% 35% Common items reviewed: 20%  General revi
Slide 34: Trends of STVP Plans – Last 3 Years
Trends of STVP Plans – Last 3 Years 96% 94.0% 94% 92.0% 92% 90% 88% 87.0% 86.0% 86% 85.0% 84% 83.0% 82% 80% 78% 76% 2014 2015 2016 %Orgs with STVP %STVP plans that paid © 2016 Korn Ferry. All rights reserved 34
Slide 35: STI – Target Vs. Actual
STI – Target Vs. Actual Actual STI Payout vs. 2015 Targets (%FAR) 40% 39% 35% 30% 28% 25% 20% 14% 15% 10% 10% 8% 6% 5% 5% 2% 0% Clerical/Operational Supervisory/Junior Middle Mgt/Seasoned Snr Mgmt/Executive Prof Prof STI Paid Target Incentive 2015 © 2016 Korn Ferry. All rights reserved 35
Slide 36: Pay Forum Spot Survey
Pay Forum Spot Survey Organisations intending to Pay a Bonus This Year 90% 90% 82% 80% 80% 70% 70% 60% 60% 52% 50% 50% 40% 40% 30% 30% 25% 23% 18% 20% 20% 10% 10% 0% 0% Yes No Lower Higher Undecided © 2016 Korn Ferry. All rights reserved 36
Slide 38: Pay Forum Spot Survey
Pay Forum Spot Survey Benefits most commonly reviewed: Organisations Reviewing Employee Benefits 120%  Superannuation  Health & Wellbeing 100%  Salary Packaging  Motor Vehicles 80%  Workplace flexibility 60% 51% 49% A number of organisations also indicated they were intending to do a full revie
Slide 41: Gender distribution on each reference level
Gender distribution on each reference level 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Males Females © 2016 Korn Ferry. All rights reserved 41
Slide 42: Gender differences
Gender differences Gender Demographics Pay Differential 5% 2% 41% higher Fixed 59% Annual Reward for men -3% Male Female Male Female © 2016 Korn Ferry. All rights reserved 42 4
Slide 43: Ratio of average female pay to Male – All Orgs
Ratio of average female pay to Male – All Orgs Reference Levels Fixed Annual Reward Total Annual Reward Level 7 (85 - 97) 94% 94% Level 8 (98 - 113) 96% 97% Level 9 (114 - 134) 100% 100% Level 10 (135 - 160) 95% 95% Level 11 (161 - 191) 95% 94% Level 12 (192 - 227) 97% 97% Level 13 (228 - 268) 95% 9
Slide 44: Ratio of average female pay to Male – Resources
Ratio of average female pay to Male – Resources Reference Levels Fixed Annual Reward Total Annual Reward Level 9 (114 - 134) 101% 97% Level 10 (135 – 160) 90% 92% Level 11 (161 - 191) 90% 90% Level 12 (192 - 227) 93% 92% Level 13 (228 - 268) 88% 88% Level 14 (269 - 313) 86% 86% Level 15 (314 – 370)
Slide 45: Infographic example ASX 300 Directors
Infographic example 10% 5% ASX 300 ASX 300 Directors CEO 90% 95% Male Female Male Female * Data obtained from Hay Group’s ASX 300 proxy database © 2016 Korn Ferry. All rights reserved 45
Slide 46: Pay Forum Spot Survey
Pay Forum Spot Survey Industries where the majority of Organisations Addressing Gender Pay Equity organisations indicated they were reviewing 120% gender equity:  Financial Services 100%  Utilities 80%  Resources  Professional Services 60% 52% 48% Common measures being undertaken: 40%  Review o
Slide 48: Gender Equity
Gender Equity PREVALENCE OF FEMALE VS MALE  From our database, the year on year improvement on overall female prevalence is only 2%  We continue to see lower prevalence of female in roles from RL14 and above from our PayNet database  When looking at director roles, the female prevalence on the AS
Slide 49: Performance Management
Performance Management SMALLER PAY INCREASES AND CONSISTENT BONUS PAYOUT TREND  Potentially indicates more focus on bonuses as reward tool. FROM OUR SURVEY, JUST UNDER 40% OF COMPANIES ARE REVIEWING LINK BETWEEN PAY AND PERFORMANCE  Common items reviewed are the performance management process and
Slide 50: Hot Jobs
Hot Jobs JOB FAMILY PREMIUMS  Based on the trends we have presented on premium of various job families, majority of the % differentials are within the +/-10% range. POPULAR BELIEF THAT HOT JOB = PREMIUM; BUT NOT SO WHAT APPROACH SHOULD AN ORGANISATION TAKE WHEN VALUING HOT JOBS © 2016 Korn Ferry. A
Slide 52: Thank you
Thank you “1 N \ 4 KORN FERRY | HayGroup

Korn Ferry — Pay Forum 2016 on 6ix

Korn Ferry — Pay Forum 2016

Slide 1: Pay Forum 2016

Slide 2: Up. Is where every business wants to be

Slide 3: It isn't rocket science, but it is science

Slide 4: Our solutions are aligned to this framework

Slide 5: A total approach to talent

Slide 6: Agenda

Slide 7: Market Trends 2016

Slide 8: PayNet in 2016

Slide 9: Economic Overview

Slide 10: GDP growth in 2016 (forecast)

Slide 11: Unemployment in 2016 (forecast)

Slide 12: Inflation in 2016 (forecast)

Slide 13: Salary Movements and Forecasts

Slide 14: Global Salary Forecast 2016 – Nominal Increases

Slide 15: Global Salary Forecast 2016 – Real Increases

Slide 16: Global Salary Forecast 2016 Asia/Pacific

Slide 17: Key points global salary forecast 2016

Slide 18: Average Annual Movements – Fixed Annual Reward

Slide 19: Average Annual Movements – Total Annual Reward

Slide 20: Client Forecast and Movements – Fixed Annual Reward

Slide 21: Nominal and Real Salary Increases over the last 5 years

Slide 22: Pay Forum Spot Survey

Slide 23: Pay Forum Spot Survey

Slide 24: Salary Differentials

Slide 25: Greatest salary differentials still in WA

Slide 26: Pay difference by sector

Slide 27: Pay difference by sector

Slide 28: Pay differences by job families

Slide 29: Hot Jobs

Slide 30: Hot Jobs

Slide 31: Performance Measurement

Slide 32: Pay Forum Spot Survey

Slide 33: Australia – incentive pay

Slide 34: Trends of STVP Plans – Last 3 Years

Slide 35: STI – Target Vs. Actual

Slide 36: Pay Forum Spot Survey

Slide 37: Benefits

Slide 38: Pay Forum Spot Survey

Slide 39: Gender Equity

Slide 40: Gender Headline

Slide 41: Gender distribution on each reference level

Slide 42: Gender differences

Slide 43: Ratio of average female pay to Male – All Orgs

Slide 44: Ratio of average female pay to Male – Resources

Slide 45: Infographic example ASX 300 Directors

Slide 46: Pay Forum Spot Survey

Slide 47: Panel Discussion

Slide 48: Gender Equity

Slide 49: Performance Management

Slide 50: Hot Jobs

Slide 51: © 2016 Korn Ferry. All rights reserved

Slide 52: Thank you