High Performing Companies Use Dedicated Systems to Get Pay Right

Any success-oriented businessperson is curious about this essential question: ‘What tools do I need to get pay right?’ Technology products are an important performance enhancer for compensation professionals. High-performing companies are more likely to rely on one. But is having a dedicated compensation system really that significant? 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? Is it worth the effort to get pay right? 

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 
• Hold off on technology selection process as a way to meet unique business needs. 
• Assemble a selection team made up of a diverse group representing different functions, levels of leadership, and perspectives 
• Have 10% greater satisfaction rate with their compensation system (scoring 7.5 compared to 6.8 for low performers), possibly because of the cumulative effect of other listed differentiators.

The results are clear - how you manage compensation can have a real impact on the success of your business. High performing organizations recognize that getting pay right is not only about competitive compensation but also about other factors. It's about inspiring trust between employers and employees and seeing the positive business results that emerge. To get pay right is to be mindful of the needs of people that contribute to the company’s success.

Practices in Getting Pay Right

In recent years, many high-profile stories covered various firms and their approaches to get pay right. 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 outed for illegal activities, employees protesting improper pay practices, and more. In 2022, there has been a significant rise in strike activity indicating a resurgence of the U.S. labor movement.

Compensation professionals need to ensure that candidates and employees have an equitable playing field. Moreover, there's a growth curve ahead for compensation as a technology field and as a business function. Sierra-Cedar's 2018/2019 systems report predicts a 35% growth in the category of compensation technology systems in the near future. However, companies purchase or implement only 17% of compensation technologies 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.

Employers should then rely on comprehensive and accurate data for decision-making. This comes especially as the growth of technology and the need for more compensation practitioners become increasingly apparent. Therefore, they should utilize tools and technologies that boost their capabilities and quicken their 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 to get pay right. We offer more of the trusted data and intuitive software our customers need to drive business impact. No need to improvise systems that can be confusing and inconvenient for compensation managers.

Conclusion 

In conclusion, using dedicated systems to ensure accurate and fair pay is crucial in today's competitive business landscape. By leveraging dedicated systems, HR professionals and employers can confidently navigate complex pay structures, comply with regulations, and demonstrate their commitment to equitable compensation practices. Investing in reliable systems to get pay right is a good strategic move for organizations. It also fosters a positive work environment. As a result, employee satisfaction increases, which reinforces trust and confidence among the workforce leading to more productivity.

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.