The world of HR – and the compensation branch in particular – is characterized by constant change. Each year, new trends, shifting priorities and technological advancements emerge, driving HR and compensation professionals to always stay on their feet to respond. And 2017 has been no exception – we’re just almost wrapping up the third quarter and we’ve already seen plenty of transformative changes and new trends on the compensation front.
What are the biggest compensation technology trends to emerge this year thus far? Here are the top five that we’ve noticed this year:
Expanding compensation capabilities:
The compensation function has come a long way since the days of relying on spreadsheets, but this year has seen a full blossoming of what compensation technology can really do. More than just searching for market data, users can now use software to manage market prices by different markets, create salary structures, access in-depth reporting and analytics, and view all of this information a mobile device – all pieces that help to build and maintain a robust compensation strategy.
Accessible data for decision support:
The compensation function is the center of all talent management initiatives that intersect pay. A central database of information about the market helps to drive attraction, retention, and engagement decisions. The same database, which also houses information about current internal pay practices can address operational and regulatory decisions, making this information valuable to all aspects of the business.
Greater focus on job descriptions:
The job description is a crucial aspect of any company’s hiring strategy, and it is also essential to an effective compensation plan. By understanding the duties associated with the job, the required skills and necessary expertise, it will become easier to match your jobs and determine the best compensation rates.
Too many organizations rely on outdated descriptions that no longer reflect the true nature of the job. Fortunately, more are recognizing the need to revamp their job descriptions and are mapping them out to define the ideal candidate and salary. Ultimately this leads to greater employee engagement, retention and morale.
Technology breaks down age barriers:
The growing functionality of compensation technology has leveled the playing field for younger compensation professionals. With quicker access to data and the ability to aggregate it and drive insights through software, more junior-level staff can perform compensation tasks that traditionally required a great deal of experience.
Doing compensation internally:
It used to be the norm for organizations to hire external consultants to help shape their compensation strategy, if not outsource the whole thing. The presence of new technology and intuitive tools have made it much easier for companies to build a robust compensation plan on their own that truly matches their organizational needs. While consultants are still necessary in some cases, companies can use technology to save significant time on everything from survey management to modeling pay ranges and building job descriptions.
At the end of the day, compensation is an art and a science. It requires a blend of data, the expertise to make informed decisions, and the tools to help facilitate those decisions. And as the space continues to evolve, the market is flooded with new tools to transform how compensation is done. But not all of these tools are equal.