Digital Dominates Compensation Landscape
New entrants compete for talent to fill emerging digital jobs

By Pamela Williams, CAE, Executive Director, CTHRA

The boom in digital viewing, fierce pressure for talent from an ever-expanding competitor base and continued consolidation of multiple system operators (MSOs) is transforming compensation in the cable and telecommunications industry. CTHRA's 2017 Annual Compensation Surveys revealed that digital natives are aggressively wooing sought-after talent with higher base, bonus and long-term incentives (LTIs) than in cable. Digital supremacy is driving the creation of new digital content and distribution job families at both programmers and MSOs, and industry employers continue to embrace amenities to entice and retain labor.

There were 58 participants in the 2017 surveys, including 11 MSO, satellite and telecommunications companies and 47 cable programmers, broadcast networks and digital content creators. New participants included: Verizon Communications, Fox News Network, Blizzard Entertainment, Altice USA, Riot Games and The Vanguard Group.

“The level of insights and analysis that CTHRA’s Compensation Surveys provide off the shelf is equal to none — especially carving out digital technology jobs,” said Robert Talmas, Vice President of Total Rewards for Univision. “As programmers and MSOs acquire more digital natives and try to integrate them, having this breakout is really helpful.”

Compensation Pressure Continues
CTHRA collected its 2017 compensation data against the backdrop of a changing marketplace. Digital is now the dominant distribution platform, with TV viewing eroding steadily — falling to a projected 2018 average TV viewing hours of 3.55 per day per U.S. adult versus 6.01 digital media hours.

Driving this shift is a plethora of original content offered by new competitors, increased over-the-top offerings by programmers and MSO platform enhancements to support cord-cutting and potential content creation. “The digital delivery movement was even more pronounced, with more new entrants this year than last,” said Hali Croner, President and Chief Executive Officer (CEO) of The Croner Company, the research and compensation consulting firm that conducted the surveys for CTHRA.

As a result, compensation pressure from the expanded labor market has intensified, and it’s not going away, Croner said. “As television companies move into digital, they need to compete for new talent that is relevant to digital. We continue to see higher pay levels at digital companies, than for MSOs and programmers,” she added.
Text Box: Figure 1. Digital Natives vs. Programmers       Source: 2017 Croner Digital Content and Technology Survey
The 2017 Croner Digital Content and Technology Survey reveals that digital natives are aggressively competing for talent with skills in content, product management, producing and data science (see Figure 1). Base salaries at digital natives range from 21% to 53% higher than programmers that participated in this survey. Factor in bonus and LTIs, and the differences are staggering — total direct compensation ranges from 64% to 133% higher for digital.

“These are key job families that are really relevant to programmers and MSOs,” said Croner. “The digital companies need content development people. They have never done it before, so they are paying a lot more.” Croner further explained that digital natives are using higher compensation to entice product managers, who are experienced developing new digital products to sell to advertisers, as well as producers. “Data science is very hard to hire right now,” she added.

New Job Families Reflect Changing Market
In response to changes in the competitive talent market, CTHRA fine-tuned the 2017 Compensation Surveys, adding new job families to both the programmer and MSO surveys. This year, CTHRA also significantly increased the number of positions for data collection — 318 MSO positions and 485 programmer positions. The programmer survey also continued to collect international salary data.

“The survey captures the significant impact that digital’s continued growth is having on the industry, including creating new job families and fueling a highly competitive labor market,” said Doug Adkins, Vice President of Human Resources for ESPN, and co-chair of CTHRA’s Compensation Surveys.

MSO participants added six new job families and 35 new positions to the 2017 survey. Many of these address critical digital tasks such as cybersecurity and marketing, as well as sales, installation and support of new services.

New MSO job families include: legal counsel, home security installation/service, customer advocacy, home security sales, sales operations, and lead generation. New positions include: vice president of strategy and development, senior information technology security engineer, digital marketing specialist, home security installation/service technician, manager of home security sales, vice president of MDU sales and director of commercial sales engineering.

Programmers and broadcasters added four new job families and 42 new positions in 2017, the bulk of these related to digital content development and distribution. These families include: multimedia producing, motion graphics design, digital partner marketing, and international distribution. New positions include: lead digital media analyst, director of multimedia producing, vice president of content or news editing, senior broadcast engineer (server‐based), vice president of digital media delivery engineering, lead motion graphics artist, senior vice president of digital partner marketing, associate research analyst, data scientist and vice president of information technology. 

Programmer Salary Budgets Stable
Programmers reported average 2017 salary adjustment budgets (merit) of 3%. This annual increase is on par with the national average and has remained stable since 2011.

At programmers, year-over-year base salary growth ranged from 1% for professional individual contributors (ICs) to 3% for executives (see Figure 2). Operational ICs also achieved 3% compensation increases.
Text Box: Figure 2. Programmers Compensation Growth   2016 to 2017       For companies participating in both the 2017 and 2016 CTHRA surveys, excludes sales positions.  Represents incumbent weighted average movement.
Unlike in past years, several of the labor categories reported pay growth below the 3% merit budget. “There is a lot of disruption in the industry right now. This may be a reflection of that,” Croner explained. She added that it is likely that the middle management, professional IC and operating support positions, which experienced only 1% and 2% salary growth, saw greater influx of new personnel due either to promotions or new hires, resulting in lower year-over-year compensation increases.

One labor category, operating ICs, did achieve the 3% merit budget, likely spurred by competitive pressure. These positions are usually in the control room and are stage-based or broadcast center-based. Although they are generally non-union jobs, they are treated like a union. “That’s a category where everyone gets the 3%, just like competitors, which include union employees,” explained Croner.

Lisa Kaye, President and CEO of greenlightjobs, and co-chair of CTHRA’s Compensation Surveys questioned the effectiveness of a 3% merit budget, especially against the backdrop of higher digital salaries.  “I think they should eliminate it all together,” Kaye said. “Put all the money in a pool and give the highest performers 20% or 30%. That’s fairer than giving employees 3% across the board.” She added that the industry needs to be more aggressive with its compensation practices if it hopes to remain competitive.

“Digital companies are not frugal when it comes to doling out increases. It’s not part of their philosophy. If you need something and show a business case, you get it,” she said.

Univision’s Talmas noted that pay equity and transparency are also critical. “Digital natives are usually fully transparent when it comes to compensation,” he said. “That’s a learning curve for us. To stay competitive, we will have to demonstrate transparency as it represents integrity to digital employees.” 

Sales Comp Increases
Programmer ad sales compensation also rose. “Sales people are getting paid well, and compensation is growing,” Croner said. “Regardless of the volatile market, sales people are making more this year than last year.” Total cash compensation (TTC) (salary and bonus) growth exceeded target for ad sales management and affiliate sales, growing by 8% and 4%, respectively. Ad sales ICs and affiliate sales ICs also saw TCC increase by 4%.

MSO paired comparisons were not possible in 2017 due to mergers and every-other-year participation, which reduced the number companies contributing to both the 2016 and 2017 surveys. However, Croner reported that on average MSO compensation, excluding sales, grew approximately 4% over last year.

Text Box: Figure 3. Bonuses Remain Broad-Based     Geography continues to impact salaries for MSO installers and service technicians. Base salaries were higher in the West and East, while MSOs in the Southwest, Mountain, Midwest and South reported lower salaries for installers and techs.

Bonuses Prevalent Across Industry
The industry continued its broad-based support for short-term incentives or bonuses. In the 2017 Surveys, 100% of MSOs offered bonuses, as did 88% of programmers and 89% of digital natives. Eligibility reached deep into the organizations, as 88% of MSOs, 61% of programmers, and 89% of digital natives offered bonuses to employees below managers, although digital natives drove bonuses still deeper offering them to more people and more levels below manager. (See Figure 3).

Text Box: Figure 4. LTIs Limited to Management     In the cable industry, long-term incentives (LTIs) such as shares, stock options and long-term cash awards remained largely limited to management. At MSOs, 73% of participants offered LTIs, as did 77% of programmers. None of the MSOs and 14% of programmers extended LTI eligibility to employees below managers (See Figure 4). By comparison, 100% of digital natives offered LTIs with 78% of those offering them to employees below manager, and pushing those below-manager incentives deeper in their organizations. Cable employers continued to primarily offer full-value shares rather than options or cash. This year’s surveys also highlighted the continued use of performance-based metrics when awarding equity.

Some of the resistance to pushing LTIs deeper into employee ranks could be their potentially dilutive nature, if paid as equity. Univision’s Talmas suggested offering cash LTIs to lower-level employees.

“The days of LTIs being part of the executive club are probably gone in our industry, given the big push for digital,” Talmas said. “I think the digital population wants to be part of the longer-term goals. While the mix doesn’t have to be the same as for an executive, being part of the longer-term strategy does get some buy-in.”

greenlight Job’s Kaye noted that the cable industry’s reluctance to push LITs deeper is widening the gap between those who are highly compensated and the every-man philosophy of people sharing in the profits of the company. “In traditional industries, it’s the top percent of high performers who share in profits. In more digitally oriented companies, they push incentives down, and everyone shares in the success of the company,” Kaye said. “That’s a huge shift philosophically in how companies chose to compensate and reward employees.” When it comes to LTIs, she advised that the industry: “Go deep or go home! You are not going to remain competitive by only rewarding the top 1%,” Kaye added.

Croner noted that while LTIs may not have a huge impact on retaining millennials, “When they are interviewing, if you don’t offer long-term incentives, they see it as missing.”

Industry Adds Amenities
In recognition of the expanded notion of compensation prevalent at digital and high-tech competitors, CTHRA’s Salary Surveys also collect data on culture and amenities offered to employees.

“Perks play a big role in helping define a company’s culture,” said Kaye. “The up-and-coming generation has come to expect a certain workplace dynamic that makes the home/office concept one and the same. They want to feel as comfortable in the office as they would in their own living room.”

Text Box: Figure 5. Amenities Prevalent       None of the MSOs and 14% of programmers offered free food, compared to 33% of digital natives. Enhanced work environments are popular across the board with 64% of MSO, 73% of programmers, and 100% of digital natives offering them (See Figure 5). Free gym and recreation amenities are less popular with this year’s survey respondents. Only 9% of MSOs and 20% of programmers offer them, compared to 78% of digital natives.

Univision’s Talmas further noted that soft perks, such as office space and amenities where employees can decompress and socialize (not collaborate) are critical to attracting and retaining both millennials and old-school digital talent. “Having the ability and flexibility to walk away from your desk, and not be in that old-school environment where if you’re not at your desk you’re not working, is enticing,” said Talmas. “A lot of the traditional media companies have to adopt more of that culture.” He added that student loan repayment and tuition reimbursement programs above IRS maximums are also attractive.

Kaye added that popular amenities also include: work from home, flexible hours, ability to be assigned to new and innovative projects, rotating work assignments and a FAST career trajectory — “For A Short Time”— before they are able to move to the next career level. Furthermore, it’s not just millennials seeking these perks. “The more seasoned professionals are open to the same level of flexibility, job progression and perks as their more novice counterparts,” Kaye said. “For traditional workers, it’s no longer all about the benefits.”

Media companies aren’t completely without weapons in their compensation arsenals. To stay competitive in the quest for digital talent, programmers and MSOs must focus on their brand. “What programmers have that technology companies don’t is their brand — and a warm culture that started years ago,” said Croner. “There is a softness, gentleness and creativity in the culture, which is about entertainment. Not every technical person wants to be in a technology company.”

Talmas agreed. “For digital native talent, they are going for the brand. They want to work on something sexy,” he said. “What platform are you working on? What is your content? Is it sexier content? What’s your audience participation?”

“If you are a sexy brand, you will get the talent,” Talmas continued. “Digital employees want to put that on their resumes. Then they will go to the Googles or the Facebooks or the next cool thing. It’s about building up their resumes as to what cool platforms they have worked on. If you’re not a cool platform, then you will overpay for talent.”

CTHRA is currently enrolling participants in its 2018 Compensation Surveys. For more information or to participate in the survey, contact Laurie Krashanoff of The Croner Company at [email protected] or 415.485.5521. 

1eMarketer 2016





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