Compensation professionals strive to ensure equity in pay and fair rewards depending on an employee’s contribution. Unlike Sales, Marketing, and Customer Support teams, they do not have the right solutions to increase employee satisfaction and retention.
Having a compensation analytics tool like Compport enables your HR department to hire and retain the top talent based on data. A solid process will make sure that you have high employee retention rates and productivity.
Let’s take a look at how analytics tools can help your HR team manage compensation structure across the organization.
There is no shortage of data in your organization. All the data in the world wouldn’t be useful if you don’t know how to use it. But, you have to identify two things before you choose an HR analytic software for your organization.
- The data points which you’re going to tap in your organization
- How you are going to measure it against other data points
Once you’re sure about your data points and the priority of a data point, you can select an HR Analytics for your organization.
There’s a reason why we are pressing on the importance of choosing the right data point. For example, here are some data points your HR department can track on a primary level:
- Employee Classification
- Roles and Capabilities
- Impact of an Employee’s budget
- Employee satisfaction
- Staffing levels in the organization
It’s up to you to choose which of these metrics you want to prioritize and track with your compensation analytics software.
Benefits of choosing a compensation analytics software
Make logical decisions
Whenever an employee wants to leave an organization for better pay, your manager’s first move is to try and match their new salary. But might not always be the right option for your business.
What if you already have a better employee to fill his ranks? Wouldn’t it be less costly to just promote a junior employee to the place of the person leaving the organization?
A dedicated analytics software will help you judge your employees against each other when deciding for a raise or a promotion. With solid data, your manager will now decide to let go of this employee and instead promote the junior employee to his position.
Ensure pay equity
Pay equity is a major issue in large and medium-sized organizations. All employees want a fair pay that is irrespective of race, religion, gender, age, and tenure. Employees want to work in a place where the pay is decided upon their performance. Compensation analytics software provides you with data about pay scales for different employees across departments. You can use the software to drill down on various questions like:
- Is there any ethnic group that’s being paid less?
- Is there a difference in salary based on the Age of an employee?
- Is there a pay scale difference between male and female employees?
You can answer all these questions from a single dashboard and identify any discrepancies in the system. When you see a repetitive discrepancy, you can talk with the manager or the administrator responsible for it. You can also set up systems and procedures to ensure pay equity across your organization.
Manage Compensation costs
Your analytics software must be connected to the different departments across your organization. It should always be fed with up to date data across departments.
Once you have a steady stream of data, you can identify if your compensation is actually increasing the profitability of your organization. The changes you make in compensation should have a direct impact on overall revenue for your organization. With this insight, you can identify key places where a higher compensation spend could be beneficial for your organization.
In short, HR analytics allows you to do two things
- Cut costs where it doesn’t add value
- Add compensation to departments which raise your organization’s value
An organization that is transparent about its goals and current state will cultivate a healthy culture. When you have a healthy culture, your retention rates improve.
Letting your employees know your compensation policies and their pay structure clearly is the highest form of transparency. Your employees can be sure that they will only be judged on their performance and not on any other external criteria. At the end of the day, when your decisions are fair in the eyes of your employees, they will definitely stay loyal to your goal and your brand.
Plan your workforce requirements with Compport
When you have data-driven insights about the performance of every individual employee, you tend to make better hiring decisions. You can analyze the places where you need more manpower in the future and hire accordingly.
If you feel about making a certain change in the business, you can take a look at your employees and understand how you can change their roles.
Here are three things you can do better with Compport
- Design fact-based/data-backed model to attract and retain top talent
- Make strategic decisions to address talent shortfalls in the future
- Discover new talent that is underutilized in your organization
The right software will help your HR department make the right compensation decisions at the right time. You can help them navigate through tough salary negotiation moments with data-backed insights. It will not just dissolve your challenges with compensation, it will make your organization more efficient in the longer run.