Compensation and HR leaders have been paying for hot and high-demand jobs since the days of the Personnel Department. But as the world of work continues changing — particularly influenced by digital transformation and a post-pandemic environment that has introduced “The Great Hire” — rewards professionals are hard pressed to respond to market competition building up around certain jobs. How much is necessary to attract top candidates for hot and high demand jobs, how much is enough to retain key talent, and, perhaps more critical, how might we anticipate hiring and/or attrition issues before they materialize?
The answers to these questions start by defining a “hot job.” In our market research, we’ve found a common difficulty across industries, regions and organizations in narrowing this to a common definition.
While some focus on internal retention and acquisition markers (e.g., attrition rates, time-to-fill metrics) others are more concerned about external market developments. But without a structured quantification of the “heat” felt around individual jobs, rewards professionals have no way to differentiate — or defend — their programs in response to an objectively measurable “hot” job market.
When demand outstrips supply, we can all agree that both talent acquisition costs and flight risks increase. We also can agree that identifying market heat early would allow organizations to put mitigation strategies in place (i.e., hiring early or upskilling existing employees could help avoid hiring at disproportionate prices down the road).
To address this, Willis Towers Watson has developed a new reporting methodology and compensation report for hot jobs. Based on data curated across several years’ worth of surveys, we have identified that a job’s heat is felt across multiple dimensions — each with its own individual indicators that can be isolated.
| Dimension | Example indicators | |
|---|---|---|
| 1 | Recent pay increase |
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| 2 | Sustained pay increase |
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| 3 | Surge in demand for the job |
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| 4 | Overall talent scarcity for a job |
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| 5 | Market volatility |
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| 6 | Increase in prevalence on learning platforms |
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Through this lens, we have gleaned insights into what competitive merit, pay and incentive practices might look like for low, medium and high heat tiers. Ultimately, the result of this methodology is a comprehensive and flexible way of detecting market heat around certain jobs before it’s too late. And that will be critical as the talent market continues to awaken and reshape itself in the new business landscape.
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