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Article | Beyond Data

Understanding and defining hot jobs

Compensation Strategy & Design|Talent|Total Rewards
Beyond Data

By Laurent Grimal | November 11, 2021

Defending your rewards recommendations for emerging critical roles starts with knowing what you’re paying for.

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.

Table 1. Heat dimensions and sample indicators of heat
Dimension Example indicators
1 Recent pay increase
  • Base salary percent increase
  • Recent hire pay premium
2 Sustained pay increase
  • 3-year average base salary percent increase
3 Surge in demand for the job
  • Incumbent count percent increase
4 Overall talent scarcity for a job
  • Discipline-specialty premium relative to a generalist role
  • Discipline-percentile positioning
5 Market volatility
  • Attrition rate
  • Proportion of new hires
6 Increase in prevalence on learning platforms
  • Increase in number of learning assets referencing the discipline specialty

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.

Author

Director - Work and Rewards Innovation

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