Steps in our Compensation Analysis Process

SFC compensation methodology is to first discover how much it costs the agency to run the client’s business and make a fair profit. Then we compare conclusions with –

  • What the agency is currently collecting in fees and
  • To benchmark data on salaries, overhead, profit and agency staffing size and mix matched to SOW.

Having understood these metrics, the final step is to identify several compensation and negotiating strategies that will accomplish the client’s objectives and reward the agency fairly. Below are individual steps in the process.

1. Discovery – Diagnostic process to determine what is working and not working in the current compensation program with the current agency.

2. Agency Questionnaire – A consultant prepared rigorous questionnaire designed to determine the agency’s staffing against a specific scope of work, salaries, overhead and profit. Elements include – Year One Scope of Work, Definitions and Job Codes and Financial Templates.

3. Analysis and Benchmarking Of Agency Response – Detailed mathematical analysis and benchmarking of agency metrics on staffing, salaries, overhead and profit.

4. SFC Opinion On Fees and Staffing – Comparison of agency metrics with benchmark data and marketplace metrics on salaries, overhead, profit and staffing quality. Judgment on basic fairness of the submission.

5. Compensation Alternatives – Comparison of submitted program with current best practices in the marketplace. Suggestions as to what alternatives might be entertained (like performance incentives), along with consequences.

6. Accountability Framework – Design of a brief understandable agreement between client and agency that includes the compensation program with incentives if appropriate. Discussion of the role of marketplace metrics like sales, share of market, agency performance evaluation and media strategy and delivery metrics.

7. Final Agreement and Monitoring – Formalizing of final agreement with method for monitoring and administering the consequences during Year One and beyond.

8. Advisory Role – If the Client wishes we will provide templates, benchmarks and advice, behind the scenes, so Procurement can anage its own compensation assessment.