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Technology, Media and Telecommunications industry sectors
COVID-19 significantly impacted how people work, where they work and what they value. For Technology, Media and Telecom (TMT) organizations, nothing rings truer. The industry saw various forms of growth and changes, largely due to the diverse types of organizations and sectors across the industry. Some have seen significant rises in business and market valuation, others have seen their business fall dramatically.
Based on our 2020 compensation surveys and industry research, we observed a few key trends in 2020 for the TMT industry.
Base salary movements
There was a slight decrease in the year-over-year salary increase rate from 2019 to 2020. Approximately a third of respondents from our recent salary budget survey indicated they had implemented a pay freeze in 2020 or decided to postpone salary review. Projected salary increases for 2021 appear consistent across most levels in the industry. Many organizations remain optimistic for 2021, with over 80% expecting to conduct a regular salary review. The overall salary increase rate for 2021 is forecast to grow globally by 0.7% compared to 2020.
One of the most prevalent actions we observed in the effort to manage labor costs was to freeze or reduce hiring. Most organizations have been cautious with taking pay-related adjustments. Within the TMT industry, only 9% reduced or delayed merit increases and another 9% plan to do the same (Figure 3). A pay freeze is the next most prevalent action within the sector. 10% have already frozen salaries or are planning to do so, while two-thirds are not planning nor considering salary freezes. The timing of the pandemic response may have played a role in this decision, as many organizations may have already allocated their merit increases in the first half of 2020.
Less than 20% of TMT organizations are planning or considering salary reductions. Among those that are, they may target these reductions at board or executive levels only.
Other actions being considered include reducing annual bonus accruals and adjusting pay at risk (given employees had the opportunity to earn a backpay reduction amount linked to company performance).
Industry hot jobs
Our survey data shows a greater than average increase in market demand for jobs clustered in these main functions: advertising sales, journalism, technical training and talent management in HR, and IT and IT development.
Figure 4 shows the highest paid roles at the professional career level (P3) for major markets. In the U.S., these include roles in technology product development, IT development, IT consultancy and data science. For other countries, technology roles are also in demand, but certain non-technology roles have become hot jobs as well such as generalists in legal, media and medical functions.
Hot jobs in major markets for senior professionals
| Country | Job title |
|---|---|
| Brazil | Medical Doctor |
| Brazil | Engineering Product Development |
| Brazil | Full Stack Development |
| Brazil | Journalism - Editing |
| China | IT Architecture (Systems Design) |
| China | Predictive Analytics |
| China | Strategy Planning |
| China | Application Development |
| Germany | Cost Accounting and Control |
| Germany | IT generalist |
| Germany | Process Engineering |
| Germany | Journalism Generalist |
| United Kingdom | Backend Development |
| United Kingdom | Mobile Applications |
| United Kingdom | User Interface Design |
| United Kingdom | Media Business Affairs Generalist |
| United States | Legal Generalist |
| United States | Machine Learning |
| United States | User Interface Design |
| United States | Broadcast Engineering |
Bonus payout and short-term incentives
Actual bonus payouts are trending close to or just below targets in 2020 (Figure 5). A small percentage of organizations are offsetting the financial impact of COVID-related disruptions by restructuring their total compensation program for executives, such as delaying goal setting for annual incentive plans.
The bonus funding for 2021 remains strong for the TMT industry from a performance standpoint. It would benefit TMT organizations to stay cautious of persisting market forces that could affect the global economy, including the pandemic and geo-political shifts, and may have a downward effect on bonuses next year for all industries.
Long-term incentives (LTI)
LTI mix has seen significant change over time especially in large technology organizations. LTI offerings for c-suite executives now commonly have a mix of performance shares and restricted stock/units (RSUs) with a fairly limited use of stock options. The LTI awards at higher employee levels almost exclusively tend to be in the form of 100% time-based RSUs.
Looking at the LTI payout eligibility in certain major markets (Figure 6), higher employee levels appear to also be enjoying a modest premium for salary and much higher levels of LTI compared to peers in the general industry.
The pandemic’s unprecedented impact on employee wellbeing and business created a continuously evolving and uncertain environment for the TMT industry, forcing organizations to reevaluate their rewards priorities. As such, access to an array of high-quality compensation market data and insights to support decision-making has been critical in helping organizations creatively address compensation and benefits issues. Our High Tech and Media Compensation surveys offer timely and lasting support. Join us.
