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Article | Beyond Data

Compensation trends spotlight: Tech and Media

Beyond Data

December 2021

Compensation surveys and industry research highlight key trends in the Tech and Media industry.

The convergence between Tech and Media sectors continues to grow. In the past decade, technology has revolutionized how we access, consume and share content. More technology, telecoms and communications companies have moved into the media and entertainment sector, while traditional media companies have shifted toward digitalization. This continual industry transformation will impact the approach to talent and rewards as organizations compete for talent across all digital and technology-focused peers.

With these intersections in mind, Willis Towers Watson is launching a new Tech, Media and Gaming Survey in 2022 to replace the existing High Tech and Media surveys. This new survey is a collective solution that presents a unique opportunity to access even more data across these interlinked sectors.

Based on our 2021 Tech and Media sector compensation surveys and research, we observed a few key trends.

2021 saw salary budgets increase for most markets, with the expectation that this will repeat in 2022 as organizations emerge from the pandemic and inflation continues to climb.

Pandemic-induced digital acceleration has further increased the demand for employees with digital skills, thereby introducing pay premiums for technology jobs.

Actual bonus amounts paid out in 2021 trended at their lowest level in years.

Long-term incentives (LTI) have higher prevalence for executive roles with a trending practice of offering this further down to senior professionals and managers, most notably for software organizations.

Base salary movements

In 2021 more organizations held regular salary budget reviews compared to 2020 for all countries. Less than 10% of respondents in our recent salary budget planning survey indicated that they implemented a pay freeze or decided to postpone salary review in 2021, but less than 3% expect to do so in 2022. This reflects the recovering environment in many markets. However, with new COVID variants emerging, companies continue to observe caution to protect their cash flow.

Projected salary increases for 2022 appear optimistic, with 95% expecting to conduct a regular salary review. Compared to 2021, the overall salary increase rate for 2022 is forecasted to slightly increase for the majority of High Tech markets (Figure 1). The media sector seems more aligned with 2021 figures instead of seeing any real shifts forecasted for 2022, except in the UK.

Industry in-demand jobs

Due to an increasing demand for labor and a limited supply of talent, organizations are more likely to have difficulties with attraction and retention coming out of the pandemic. Employers expect these difficulties to persist into 2022.

Figure 2 shows the highest paid roles for major markets at the professional career level (P3), with the majority being technology roles. For example, Figure 3 shows the average base pay and total direct compensation for an application developer at P3 career level, of which United States tops the list. On a related note, digital roles in research, cyber security and software development are among the most sought after in the US. There is an increasing demand as well for certain non-technology roles such as journalism, customer success management, government relations and engineering project management.

The demand for digital talent is stronger due to the accelerated digital transformation at the onset of the pandemic. However, the supply hardly meets the demand, causing organizations to rethink their approach towards the attraction and retention of digital talent.

Half of organizations are recruiting more talent compared to the previous year. Our survey data also found that, compared to pre-pandemic levels in most countries, new hires are pulling larger premiums compared with existing employees. Figure 4 shows the average premium pay rate at the professional career level (P3), which is high across certain major markets except France and Germany. Premiums increase typically at the more senior professional levels.

Bonus payout and long-term incentives

Actual bonus payouts are trending at their lowest level in years (Figure 5). There is some differentiation at the higher percentiles, which suggests that organizations are leveraging performance management techniques in the distribution of incentive scheme payouts. Organizations are rewarding high performers with higher bonuses and differentiating them using bonus payout.

We expect to see an increase in payouts as organizations emerge from the pandemic. Market forces that affect the global economy, including post-pandemic recovery and geo-political shifts, may have a positive effect on bonuses across 2022 especially in the Tech, Media and Gaming sectors.

Long-term incentives

LTI eligibility remains prevalent for executive roles in certain major markets (Figure 6), with a trending practice in some industries to provide eligibility to senior professionals and managers – most notably in software organizations.

Organizations headquartered in the United States generally have more emphasis on equity for both their Executive and Non-Executive populations versus non-US based organizations.

Now more than ever, human capital is critical to drive organizational performance amidst a fast-paced environment. With more competition for talent and skills, there is a corresponding pressure to ensure your pay programs are effectively meeting your critical workforce needs. You need reliable, relevant and timely data to determine the right pay levels and mix for a workforce that spans sectors, cities and continents. Limited salary budgets only intensify the challenge of creating compensation plans that attract and retain skilled employees who drive your business forward. Our new Tech, Media and Gaming Compensation Survey offers timely and lasting support. Join us.

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