Today’s workforce has an untapped potential buried deep within companies. Akin to the insights businesses gather from their customers to analyze their product/service’s performance, the workforce preserves the exact sort of data. And thanks to people analytics, companies can unlock these beneficial insights.
Chief human resource officers (CHRO) are unleashing new ways to leverage data to improve decision-making within the (HR) space, boost bottom lines, and enhance workforce satisfaction. One such focus area is compensation. With many organizations being service-centered instead of product-centered, workforce costs are often the largest expense line in the financial reports. Due to this, people analytics in compensation has gained more CHROs’ attention to keep expenses aligned with revenue to sustain their companies’ financial health and profitability.
Read on to learn how people analytics is helping organizations in compensation.
No more Guesswork in Decision-making
When dedicated employees resign, their managers’ natural reflex is to counter their decision. However, without data, how can organizations determine if making such a proposition is a wise decision? If an employee is already well-compensated, making a counter-offer may adversely skew the compensation within their job categories. That can trigger additional issues with regard to pay equity.
In other cases, CHROs might realize that the concerned employee is under-compensated for their roles. In either situation, compensation insights across companies enable CHROs to make better and more equitable decisions.
Analyzing Sales Efficiency
People analytics is critical for organizations that need to determine if they are extracting a return on their sales force investment (ROI). Sales professionals are more highly compensated than other employees. Therefore, including their expense accounts can add to sales teams’ total expenses.
As such, businesses must determine if the sales department is generating additional revenue that supports their overall costs and if they are distributing the rewards fairly and effectively. Having an in-depth view of sales teams’ compensation will allow the C-suite to gauge the success or failure of this workforce section, and optimize its efficiency.
Eliminating Payroll Bias
Pay equity has garnered immense media attention across geographies. Every 4 out of 5 employees want to work for a company that values diversity, equity, and inclusion (DEI).
As the decided wage gap that has to be reported does not analyze pay fairness, organizations require considerably more comprehensive information to assess pay equity accurately. Most of the data essential for an accurate analysis of pay fairness – bonus structures, base salary, performance values, and job categories – reside within compensation applications.
People analytics, alongside statistical procedures, offers the actual compensation picture that CHROs can convey both externally and internally and fulfill compliance requisites. Moreover, this analysis helps ensure that companies are compensating their employees fairly and improving retention rates by identifying those on the brink of resigning due to compensation conflicts.