Market Perspectives

Salary.com Advances Compensation Effectiveness

Posted by Ventana Research on Dec 13, 2021 5:00:00 AM

Total Compensation Management (TCM) is a strategic HCM area focused on the processes, data, analytics and technology capabilities needed to achieve an integrated and holistic approach to rewarding employees for their value and contributions. One aspect of TCM is pay equity which, simply defined, means pay comparability and fairness and a lack of bias. It is an organization’s ability to determine what jobs require comparable skill, effort and responsibility while relating that to market pay rates and trends. While most mid- and senior-level managers are keenly aware of the legislative considerations around equal pay, many continue to have a narrow, if not incorrect, view of pay equity and why it also warrants serious attention. Pay equity does not just relate to compensating appropriately and without race or gender bias for similarly valued jobs and job duties. It also encompasses the notion of comparable opportunities being afforded to earn better compensation and derive job satisfaction. This involves the perception of fairness in the broader context of the employee experience, one of the four pillars of a superior employee experience.

VR_HCM_2021_Coverage_LogoDespite the universal recognition of the need to get pay right in order to remain competitive and to attract and retain talent, there still exists the possibility of a disconnect around best pay practices between decision makers and hiring managers. This could be for several different reasons including a lack of communication around total compensation philosophy or strategy, or simply the unknown of how to go about getting the information and guidance needed to effectively manage the workforce.

Salary.com provides software that helps organizations and their HR and Compensation Departments get pay right and align it with other business drivers such as attracting and retaining top talent or staying in legislative compliance. The software assists organizations in understanding and applying compensation market data in real time using cost-of-living calculators, comparison tools and compensation negotiation tips. The vendor has also recently rolled out a pay equity analytics capability with the Comp Analyst Pay Equity Reporting Toolkit which provides market intelligence about pay data and compares it with internal data to produce reports that assess key differences. Organizations must be empowered to embrace pay equity in the war for talent and to include pay equity as a top priority.

Ventana Research observes that a lack of alignment between organizational goals and the capabilities and performance of employees often leads to inconsistent and sub-optimal execution. This can also be the biggest impediment to further investment in compensation management systems. Another large and complex issue at hand, however, is how pay equity intersects with the overall employee experience, including achieving high retention rates for top talent. Having pay equity breeds a sense of assuredness that everyone in the organization is being treated fairly and appropriately, based on objective and directly relevant internal and external data.

From a higher-level point of view, pay equity is a critical theme in HR/HCM circles and the intensified attention it is getting reflects both the strategic and operational elements of an HR business plan. It therefore behooves decision makers to be in the know about how to reward employees based not only on the internal value but also the external value of jobs, along with the availability of different skills within and outside the organization. Again, providing a clear sense of fairness in how employees are compensated is key to delivering a great employee experience.

Salary.com’s Comp Analyst Pay Equity Reporting Toolkit intends to replace spreadsheets as a centralized library for surveys, budget models, composites and salaries all in one location. Beyond just having the ability to analyze and readily interpret pay equity, the toolkit is also capable of reporting on average pay spread. This concept takes a deep dive into comparing responsibilities and skills across job titles, families and levels to ensure that all employee compensation is where it should be. With the toolkit, Salary.com can help fill the communications gap between HR departments, line managers and senior executives using data and intuitively grasped visualizations.

VR_2021_TCM_Assertion_1_SquareVentana Research has asserted that by 2022, compensation market pricing will include benchmarking of skills, not just jobs and job families, and one-quarter of organizations using it will enjoy improved organizational agility and employee retention. Software that is able to examine skills, not just current and previous jobs, assists organizations in effectively initiating staff redeployments which further alleviates turnover concerns. This allows organizations to not only address pay equity concerns but also objectively make skills and competencies the foundation of workforce redeployments and other assignments.

Investing in software to effectively manage compensation from a global and more holistic view will not only set an organization apart competitively, it will also create or reinforce a company culture that employees can stand behind. For decades, organizations have not had pay equity data readily accessible and, if they did, they did not always make an effort to implement any changes needed. Salary.com offers an expansive set of benchmarks and data to inform organizations investigating appropriate compensation, including pay equity and average pay spreads. Given today’s efforts to recruit and retain talent, organizations can get ahead of the curve by having not only competitive pay but also pay that is both regulatory compliant and perceived as fair across the organization. Compensation and HR leaders should assess Salary.com’s offering and determine relative fit with related business priorities, adjacent systems, and supporting data and processes.

Topics: Human Capital Management, Learning Management, Talent Management, Workforce Management, Total Compensation Management, employee experience, Continuous Payroll

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Written by Ventana Research

Ventana Research is the most authoritative and respected market research and advisory services firm focused on improving business outcomes through optimal use of people, processes, information and technology. Since our beginning, our goal has been to provide insight and expert guidance on mainstream and disruptive technologies. In short, we want to help you become smarter and find the most relevant technology to accelerate your organization's goals.