Technology, Content Creation and Digital Marketing Salaries Escalate
Industry Adapts Comp Practices to Competitive Landscape

By Pamela Williams, CAE, Executive Director, CTHRA

The explosive growth of digital distribution and ramping investment in original programming has had a profound impact on compensation in the cable and telecommunications industry. CTHRA’s 2016 Annual Compensation Surveys revealed that salaries for technology, content creation and digital marketing jobs rose sharply this year. Industry consolidation also drove changes in sales compensation plans, and robust equity incentives once again fueled executive pay. The surveys further determined that industry employers are offering more amenities to better compete with technology and digital content employers for talent.  

Attracting and retaining high-caliber talent in this dynamic labor market requires competitive compensation intelligence. “The thorough analytics and commitment to data integrity in CTHRA’s Compensation Surveys ensure that we consistently have our finger on the pulse of compensation trends in our industry, even as the industry continues to transform,” said Fatimah Shittu, Vice President of Compensation for CBS Corporation

 

There were 59 participants in the 2016 surveys, including 14 multiple system operators (MSO)/satellite companies and 45 programmers/broadcast networks. Participants also included digital content creators such as Amazon, hulu, RedBull Media House and Vevo.

 

Technology and Content Spur Comp Changes

CTHRA collected its 2016 compensation data against the backdrop of a changing marketplace. According to data from eMarketer, digital is the dominant distribution platform, outpacing TV viewing. Numerous MSOs, including Comcast, Charter, DirectTV and Dish Network, are offering cord-cutting options. MSO broadband networks are essential to multiscreen digital distribution, and SNL Kagan projects that the number of broadband subscribers will climb from 63 million to 71 million over the next 10 years. These sophisticated networks require personnel with specialized skills.

 

“MSOs are becoming more technology and software based and less connected to the television,” explained Hali Croner, President and Chief Executive Officer (CEO) of The Croner Company, the firm that conducted the surveys for CTHRA. “Distribution is still king, but figuring out how to get content to subscribers on multiple screens is driving demand for technology jobs.”

 

Market pressures for tech-savvy personnel sharply drove MSO salary increases for customer care (CC) technical support representatives. With expertise in high-speed data, commercial data, and streaming video and music, these individuals provide technical support to customers and installers in the field. First-level CC technical support reps garnered 14% base salary growth, more than four times the national average, while expert reps saw a 7% increase  (See Figure 1).

 

Text Box: Figure 1. Hot Technology and Digital Jobs  Base Salary Growth“These individuals know the new world, and we are seeing a premium for their skill set,” explained Croner. “They need to be more advanced and adept at complex problem solving than other categories of customer care, which is driving rates higher,” she added.

 

This shift to digital, combined with the emphasis on original content, is also spurring programming salary increases. Programmers are prioritizing original content and launching over-the-top (OTT) services, while data from IHS Technology reveals that digital newcomers like Amazon and Netflix have sharply escalated their content investment. “This increased investment in original content is creating a supply and demand issue,” said Croner.  “If you need to compete by creating original content, and a lot of it quickly, you’ll need creative people. But if your competitors are investing, they will want to buy that talent as well.”

 

As a result, base salaries for managers of digital distribution, individuals who help negotiate deals with digital content providers, rose 16%. Directors of digital media, who are skilled at content creation, earned 12% base salary raises, while those adept at reaching digital viewers — digital media marketing individual contributors (IC) — saw salaries climb 11% (See Figure 1). Similar to MSOs, increases for these hot programming jobs significantly outpaced the national average — by up to five times.

 

Salary Budgets Stable; Bonuses and Stock Spur Executive Pay

Both MSOs and programmers reported average 2016 salary adjustment budgets (which include raises for merit, promotion and cost of living adjustments) of about 3%. This annual increase is on par with the national average and has remained stable since 2011.

 

Text Box: Figure 1. Hot Technology and Digital Jobs  Base Salary GrowthAmong MSOs, base salary growth ranged from 2.7% for hourly employees and climbed to 4.8% for management. At programmers, base salary growth ranged from 2.2% for ICs (non-management professionals) and climbed to 3.8% for executives (see Figure 2).

 

Base salary tells just part of the story. “For their more senior positions, companies are driving total compensation higher through bonuses and stock,” explained Croner. In 2016, total direct compensation (TDC) at MSOs escalated 7.4% for executives and 5.9% for management.

Among programmers, TDC climbed 4.5% for executives and 4.2% for management (see Figure 2). TDC includes salary, bonus and incentives like stock.

 

Geography continues to impact salaries for MSO installers and service technicians. Base salaries were up to 11% higher in the West and 4% higher in the East, while MSOs in the South, Midwest and Southwest reported lower salaries for installers and techs by up to 6%, 4% and 2% respectively.

 

Consolidation Spurs Changes to Sales Compensation

2016 was a strong year for programmer ad sales. Total cash compensation (TTC) (salary and bonus) exceeded targets by 9% for ad sales ICs and 5% for ad sales management.  Even more dramatic was the change to affiliate sales compensation plans. The prevalence of affiliate sales-specific plans decreased by 50% this year, signaling the industry’s proactive approach to market changes.

 

“Historically, the affiliate sales group had its own sales incentive plan driven by subscriber growth and affiliate partnerships. Because of consolidation and market penetration, that model is no longer valid,” explained Lisa Kaye, President and CEO of greenlightjobs, and co-chair of CTHRA’s Compensation Survey. Instead, many programmers are now integrating those highly specific plans into broader companywide programs. 

 

Text Box: Figure 3. Bonuses Remain Broad-Based

“This is a big shift in how the industry has traditionally operated,” Kaye said. “It’s heartening that companies are addressing this issue in a way that doesn’t penalize the employee and still incentivizes sales people.”

 

Bonuses Prevalent Across Industry

The industry continued its broad-based support for short-term incentives (STI) or bonuses. In the 2016 Surveys, 93% of MSOs offered bonuses, as did 88% of programmers. Eligibility reached deep into the organizations, as 69% of both MSOs and programmers offered bonuses to employees below managers, although MSO penetration was more consistent (See Figure 3).

 

“Competitive pay practices continue to drive the way in which companies recruit and retain top talent,” said Kaye. “Having variable pay practices allows employers to reward top performers in a very aggressive way.”

 

Long-term incentives (LTI) such as shares, stock options and long-term cash awards remained largely limited to management. At MSOs, 71% of participants offered LTIs, as did 69% of programmers. None of the MSO participants and 10% of programmers extended LTI eligibility to employees below managers (See Figure 4). This limited eligibility differs from digital and technical employers, many of which offer LTIs to everyone.  Employers continue to primarily offer full-value shares rather than options. This year’s surveys also highlighted the increased use of performance-based metrics, driven largely by shareholders, when awarding equity.

 

“We are fortunate to offer LTI awards deeper in the organization than most companies,” said Robert Lynn Scott, Director, Total Rewards and Workforce Analytics for Cox Communications.

 

He noted that LTIs “foster a strong sense of ownership in the company,” while STIs are important for short-term appreciation and gratification. “LTI awards recognize that some contributions do not pay off until years later,” Scott added. “There is a balance between STI and LTI plans — rewarding short-term over long-term may hamper long-term growth and future success of the company.”

 

Greenlightjobs’ Kaye noted that the effectiveness of LTIs depends on the position. “The average retention rate in most jobs is somewhere between three to five years,” Kaye said. “Long-term incentive plans don’t really have a place at that level.” However, she noted that they are useful for hard-to-fill jobs; for executives with long-term contracts; and for jobs with a longer shelf life, such as content, technology and engineering. “Companies might be inclined to carve out a little equity for those jobs to keep them in their seats longer,” Kaye added.

 

Expanded Participation and Job Families Reflect Changing Market

To keep pace with changes in today’s intensely competitive talent market, CTHRA continues to expand digital participation, identify new job families, add international positions and update the survey’s scope. The 2016 Compensation Surveys significantly increased the number of positions for data collection — 287 MSO positions and 447 programmer positions.

 

“There is no other source of data as relevant to our industry as the CTHRA surveys,” said Cox’s Scott. “Yes there are other survey sources, but none offer the opportunity to directly influence what job data is needed on as timely a basis as this survey — not only annually but also on an ad hoc basis if needed.” 

 

This year, MSOs and satellite providers added 10 new job families and 61 new positions. Many of these new positions reflect the high demand for employees with technical skills. New job families include: Business Intelligence Engineering, Information Technology Security, Software Engineering, Pricing and Offer Management, Market Development/Access Management, Major Account/Enterprise Commercial Sales, Small-to-Medium Business Commercial Sales, Paralegal and Environmental Health and Safety.

 

Programmers and broadcasters added four new job families and 29 new positions in 2016. These families include: Consumer Insights and Analytics, Inclusion and Diversity, Sales Training and Business Development Account Management. Croner noted that the new inclusion and diversity positions are expanding beyond organization-level jobs to include individuals responsible for diversity in programming talent and content lineup.

 

Industry Adds Amenities

Last year, CTHRA’s Compensation Surveys began gathering data on amenities and culture, reflecting the expanded notion of compensation prevalent at digital and high-tech competitors.  

Text Box: Figure 5. Amenities IncreaseThe 2016 Surveys reveal increases in amenities at both MSOs and programmers as they strive to be the employer of choice.

 

Free food, defined as fully subsidized daily meals and fully stocked pantries, remained at 0% for MSOs, but grew from 9% to 13% at programmers. Enhanced work environments at MSOs rose from 33% to 57% and from 44% to 67% at programmers. Free gym and recreation amenities are closing in on digital metrics, growing from 8% to 36% at MSOs and 17% to 27% at programmers. (See Figure 5)

 

“Perks and amenities often represent a more qualitative component of total rewards,” explained CBS’ Shittu. “It is often less about the monetary value of free food or gym access, and more about the culture of catering to the needs of employees and providing conveniences when possible.”

 

Kaye noted that when recruiting for new positions, candidates are most interested in vacation time. “It’s not so much about free lunch or ping pong tables in the break room, but about how much time off employees have to spend with family or doing the things they love,” she said.

 

“Lifestyle choices are very important to millennials, and just about every other age Text Box: Figure 6. Pay Comparison   Digital vs. Cable Programmers      Source: Analysis from CTHRA Programmers and Croner Digital Surveys.  Results generalized.group,” added Scott. “Getting and keeping fit, eating healthy, being a strong corporate partner in the community and work-life balance — as the job allows — are key to attracting millennials.”

 

As companies strive to continue to attract and retain top talent, flexibility is critical. TDC for digital companies is 60% higher for executives, 45% higher for management and 35% higher for ICs compared to cable programmers (See Figure 6). As a result, Kaye advised companies to remain open to new compensation strategies, whether they be pushing equity lower, offering time off, or combining sales bonus plans. “Keep your finger on the pulse of the industry and remain flexible,” she said.

 

Croner concurred. “Recognize that there are companies competing for the same talent and figure out how to adjust. But you don’t have to match them dollar for dollar. Look out for your strengths, keep informed and be responsive,” she said. “People go into media because they love media and the content. You can compete on the total proposition, not just on compensation elements.”

 

CTHRA is currently seeking participants for its 2017 Compensation Surveys, as well as its new Cable & Telecommunications Employee Benefits Survey, which will be conducted by PwC Saratoga. For more information, please visit www.CTHRA.com.

 



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HR Pulse is a bi-monthly resource published exclusively for the members of the Cable and Telecommunications Human Resources Association.

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