Compensation strategies that entice employees to stay at the company are more important than ever.
Compensation has become much more complicated, as it’s no longer just about exchanging money for time.
Today’s compensation plan must maximize the effectiveness of the budget for each employee and department. At the same time, it needs to provide satisfaction and security to your employees, ensuring that they’re compensated fairly.
What’s more, a good compensation plan incorporates ways of motivating employees to perform at their best. You can do so by providing a range of performance incentives that are appealing, relevant and quantifiable.
That’s why investing in the development of a solid compensation planning strategy is worth it. A method of ensuring that your compensation budget is allocated as efficiently as possible can have a considerable effect on your company’s success.
Market Data Comparison: Using your internal payroll data to compare market averages from external salary surveys.
Labour Cost Analysis: Merging payroll data such as base salaries, bonuses, overtime pay, and benefits to determine overhead costs.
People count Analysis: Providing an accurate picture of staffing levels and compensation costs to assist with salary and workforce planning.
Retention Analysis: Looks at employee’s risk of leaving by reviewing compensation levels and performance data.
High Performer Analysis: Profiles high performers by analyzing performance levels and correlates with rewards, training, previous work experience and education to assist with recruitment and retention efforts.
Sales Compensation Analysis: Calculates commissions, bonuses, quotas and hours worked to determine sales per hour.
Geographic Pay Analysis: Review payroll costs by location to assist with geographic investment and expansion strategy decisions.
Managing Compensation Costs
Performing internal audits like the pay equity example above can lead to company-wide changes to pay and benefits. Movements can lead to more hires and reduced turnover, as well as increased wage and benefits pressures at competing organizations. If you find your organization behind the pack, it can be tempting to simply follow the lead of others. However, this can lead to wasted spending.
Eliminating guesswork from your decision-making
The second benefit lies in using data to make a decision where Human Resources and management previously used “gut instinct” for decision-making. When a good employee tenders their resignation, the natural instinct of their manager is to get approval to make a counter-offer.
Assessing pay equity
The topic of pay fairness has received a great deal of press across multiple countries, particularly given the mandated reporting of the “gender pay gap” in the United Kingdom and elsewhere. Since the defined pay gap that needs to be reported doesn’t measure pay equity, companies need much more detailed data to conduct an accurate pay fairness assessment. Much of the data required for an accurate assessment of pay equity such as base salary, bonus structures, job classes, and performance values reside inside compensation applications. Statistical procedures in combination with compensation analytics reveal the true compensation picture that can be communicated both internally and externally, and satisfy compliance requirements.
- Visualize all of your compensation data in one place and discover trends that result in key business outcomes.
- Streamline compensation planning with actionable insights.
- Empower leaders to view current compensation costs and develop fair compensation strategies for their teams.
- Identify trends in your organization’s succession plans to streamline your succession strategy.
- Break down time-since-promotion by succession job and discover actionable insights.