The Cable Television Human Resources Association has been conducting compensation surveys for almost two decades. But this year the organization expanded on that theme to create the Human Capital Metrics Survey.
Companies are increasingly looking for human capital and human resource benchmarking metrics to help HR departments maximize their return on investments, said CTHRA executive director Pam Williams. So the organization teamed up with Saratoga, a PricewaterhouseCoopers division that maintains the world’s largest database of human capital metrics and benchmarks, to create a human capital metrics survey that benchmarks cable against other businesses.
The survey found that cable pays its employees more than other industries, but it is also spending about 15% less on benefits. In addition, the percentage of employees who left jobs in cable was higher than the general industry rate. Annual voluntary turnover at the operators and programmers was 12.61%, while that same metric was 10.5% across all industries. It’s hard to say whether that’s good or bad, said Lisa Chang, executive vice president of human resources for The Weather Channel and a CTHRA board member, because the survey only addresses the migration, not where those employees are going.
“We don’t know whether employees are leaving the industry or moving from one cable company to another,” Chang said. “That is something we want to get into deeper next year. There are obviously things we, as an industry, need to be doing beyond wage compensation to make sure our people don’t leave and this survey will help us figure that out.”
The survey also found that CTHRA participants’ median revenue factor, or revenue generated per full time employee (FTE), is significantly higher than the industry median.
And survey participants pay their employees well. The average compensation per FTE is almost 33% greater than the all-industry average. But CTHRA companies provide a slightly less attractive benefits packages spending about 15% less than the industry average.
“We wanted this to be a true representation of what is going on,” Chang said. “We wanted it to reflect what the industry is doing well but also what the industry needs to improve on.”
For instance, the percentage of employees enrolled in company-sponsored 401k plans is lower for CTHRA participating organizations than the industry average. It’s unclear why that is, Chang said. “From an HR perspective, I wanted to know why that participation is lower,” she said. “We found that there wasn’t much interest by our employees. We have a lot of young employees who aren’t very interested in retirement at this point. They are more interested in hitting the jackpot and retiring early. So we can use this information to educate our employees about the benefits of such a perk.”
According to the survey, the human capital return on capital — the pre-tax profit for each dollar invested in employee compensation and benefits — was much higher at $3.24 vs. Saratoga’s general industry median of $1.24. Part of that is because the labor cost revenue percentage (employee compensation and benefits as a percentage of revenue) is half of the general industry average (14.61% vs. 29.3%).
“With increasing competitiveness in the marketplace and our industry, HR leaders understand that in order to stay ahead of the curve, we have to deliver strategic value to our organizations,” Williams said.
And that means not only creating a set of metrics to measure the industry’s effectiveness, but also being able to explain the correlation to key performance indicators and financial measures.
“Payroll and benefits account for approximately 35% to 40% of operating expenses,” Williams said. ”In sheer volume, improvements in these expenses can have a dramatic impact on the bottom line.”
CTHRA’s survey, which tallied information from 15 operators and programmers, examined 25 metrics in six categories: organization and operations; human resources staff and structure; compensation and benefits; retention and separations; staffing and hiring; and diversity. Saratoga compared the metrics submitted for CTHRA’s survey to Saratoga’s general industry benchmarks based on data collected from nearly 300 organizations across various sectors.
CTHRA’s board is pleased with the results, although they recognize the survey will change over time as more companies participate and more metrics are included. For instance, next year’s survey will break down the data between distributors and programmers, Chang said. In addition, more metrics will be added each year.
“We found that people really want this kind of information,” Chang said. “But we also found that there aren’t a lot of companies capturing this kind of information, and it takes a lot of work to do it. Having this kind of benchmark is good because it gives companies a way of figuring out what information needs to be captured. We limited the number of metrics this year because we didn’t want to overwhelm HR departments, but we will add more each year.”