More respect, better pay for HR: Toronto study

By David Brown
|Canadian HR Reporter|Last Updated: 02/18/2003

HR may have a way to go, but better compensation is proof the profession is gaining respect with the rest of the business community, said the chair of the Toronto Board of Trade’s compensation survey committee.

“My gut feeling is that HR is still at or near the bottom of the pack when it comes to the senior executive workforce,” said David Tuck, who is also the manager of compensation and benefits with the Ontario Municipal Employees Retirement System. “But at one point and time (HR) might have been considered a poor cousin and now that is no longer the case.”

The Board of Trade recently completed its survey of more than 300 Toronto businesses. At the most senior level the median salary for HR professionals is now $146,000. By contrast, executive level marketing professionals make a median salary of $149, 900.

At the entry level for HR it’s closer to $41,000.

Many organizations now have a vice-president or senior vice-president of HR, said Tuck. “I think one of the reasons is that senior management has recognized the importance of what they can bring to the table.”

Any organization can buy the best technology; the differentiating factor between organizations is who can get the best people to use the technology, said Tuck. Corporate decision-makers are increasingly willing to pay for the expertise and skill that can help an organization get the most return from its human capital, he added.

The general trend in compensation is to offer more incentive-based pay and at lower levels of the organization than in the past. It’s no exception for HR, said Tuck.

Human resources professionals are getting bonuses and in most cases the targets are broad based, tied to corporate results and divisional goals.

If customer-service numbers are good, that means HR has created a system to identify, recruit, retain and motivate the good people who deliver good customer service, he said.

The board of trade survey covers a wide number of areas and issues beyond compensation for HR. The data contained some interesting surprises, said Tuck.

Turnover rates were significantly lower than expected. Organizations are making a determined effort to hang on to people, but many people still feel uneasy about the economy and aren’t as willing to leave an organization without something to move into, said Tuck.

He also said that contrary to popular media depictions of exorbitant CEO compensation packages, CEOs, at least in the Toronto area, aren’t getting the extreme compensation packages many people believe. Only 25 per cent of the CEOs in the survey had base salaries of $275,000 or more and the median CEO salary was $182,000.

The survey also asked about CEO perks and incentive plans. Most organizations have a formal bonus or incentive program, just 17 actually receive stock options.

Some of the other perks for CEOs include:

•The typical company car is worth around $50,000.

•26 per cent of organizations pay for fitness club memberships.

•79 per cent have company-paid cell phones, but 25 per cent have personal digital assistants.

•Just five per cent provide CEO loans.

•34 per cent of CEOs had formal severance pay provisions in place.

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