Technology products are an indispensable performance enhancer for compensation professionals, and high-performing companies are more likely to rely on one. But is having a dedicated compensation system really that important? If you’re getting by just using spreadsheets — or doing nothing — why sink time and money into a new system? Is it really that big of a deal?
The results of a recent research report from Lighthouse Research & Advisory revealed that high-performing companies are 32% more likely to be using a dedicated compensation system. Meanwhile, low performers in the study were 50% more likely to be using spreadsheets or nothing at all to manage their compensation function. The research also found that high-performing companies are:
- More likely to be using a variety of data sources
- More likely to hold off on technology selection process as a way to meet unique business needs.
- More likely to assemble a selection team made up of a diverse group representing different functions, levels of leadership, and perspectives
- 10% more likely to be satisfied with their compensation system (7.5 score vs 6.8 for low performers), perhaps due to a cumulative effect of the other differentiators listed above
The results are clear — how you manage compensation can have a real impact on the success of your business. Countless high performing organizations have seen how getting pay right is about more than competitive market compensation (though that’s important too). It’s about inspiring trust between employers and employees and seeing the positive business results that emerge.
The last few years have seen several high-profile stories in the news regarding various firms and their approaches to compensation. Some are positive, with firms making equitable adjustments to pay to ensure a level playing field for the entire workforce. Others are less positive, with firms being outed for illegal activities, employees protesting improper pay practices, and more.
The overall sentiment around compensation highlights the fact that compensation professionals need to ensure that candidates and employees have an equitable playing field. There’s no time to sit back and relax — there’s also a growth curve ahead for compensation as a technology field and as a function of the business. According to Sierra-Cedar’s 2018/2019 systems report, the category of compensation technology systems is expected to grow by 35% in the near future. But only 17% of compensation technologies are purchased or implemented as part of a talent management suite. The other 83% of implementations are stand-alone, best-of-breed systems that enable powerful reporting and strategic analysis.
Technology growth, as well as the need to increase compensation practitioner headcounts to support internal demand for data and insights, highlight the fact that employers need to not only be making decisions based on comprehensive, accurate data, but also be using tools and technologies that scale their capabilities and improve their speed and accuracy.
With today’s leaders expecting more high-impact, visual data, CompAnalyst, our fully integrated compensation and data analytics platform, meets a critical need for HR and compensation professionals who need to communicate with the business. We offer more of the trusted data and intuitive software our customers need to drive business impact.
To learn more about the value of implementing a compensation system and the leading solution providers, download the Compensation Technology Buyer’s Guide and Provider Landscape Report.