Most companies provide a broad range of benefits to senior executives and those in the middle management. Such programs compensate employees for their hard-work as well as motivate them to keep up their solid performance. While organisations might have executive benefit programs in place, many of such initiatives are developed one plan at a time and without a consistent approach or vision, a report found. Because of this, there might be gaps in benefits coverage and overlapping with a needless expense, which might present a serious governance issue for many top executives and boards of directors.
Compensation analytics is built on the foundations of HR analytics that focuses on optimising the cost of workforce to drive bottomline growth. Such analytics helps organisations craft an employer brand that effectively communicates a winning employee value proposition. Alternatively, compensation analytics also enables HR leaders to reward high-performers adequately, thus boost workplace morale, engagement and retention.
See also: The Role of People Analytics in Time of Crisis
Eagle Hill survey found that there is a high cost of attrition when high performers leave a company. Not only does it affect the overall production, it also affects the overall motivation within a company. More than half respondents felt that low performers at work lacked initiative and motivation and contributed to building a culture where mediocrity is accepted. Meanwhile, 26 percent believed that poor-management is talent’s primary reason for leaving an organisation. Compensation analytics can help solve this issue by providing the right data to the HR department to reward the right employees at the right time and retain high-performers for the long haul.
Here is how compensation analytics help your business prosper.
Salary benchmarking via compensation analytics helps employers understand how a prospective candidate compares to their peers applying for a job. It also gives clues to HR around what the market says about the salary for a certain role. When HR is able to identify the matter, they can compete better in the talent market and attract candidates to apply in their company.
For decades, pay equity among men, women, and employees of colour has always been a major issue. Deploying the analytics to understand pay variations among different racial groups, genders, and even age can reveal how fair your compensation system is. Compensation analytics can also help identify and address discrimination to ensure compliance.
Compensation analytics can benefit employers in terms of rewarding and compensating employees. By using the analytics, HR would be able to analyse top performers within an organisation. The analytics also help HR in identifying whether or not they follow standard compensation goals and if those goals are aligned with their business goals.
Given how compensation analytics brings tremendous advantages for organisations, here are several areas for HR to focus to maximise the analytics.
Read also: 3 Risks of Data Analytics and How to Prevent It
