Creative ways to use market data – Part 3
Many organizations have raised concerns about how effective HR and compensation professionals can be in managing pay data and compensation planning, especially when teams are working remotely as a result of the pandemic. Organizations are increasingly turning to automation and compensation management tools to address issues with data security and integrity when working remotely, and to secure reliable pay data and insights.
Willis Towers Watson compensation experts discuss the impact, relevance and future of automation and software in pay data management and the increasing role data plays in shaping the rewards landscape.
Marco Poggetti: Organizations are seeking efficiency in the way they run processes across their whole value chain. In the past, organizations predominantly used technology to streamline their profit center operations. More recently, however, digital transformation has expanded to other business areas including HR and rewards. Early adopters of compensation management software have redesigned traditional processes in the compensation cycle to embed technology, freeing up time for HR professionals to focus on tasks that bring more value.
Lisa Donaldson: The automation capabilities of compensation software have been a game changer for many compensation professionals. Rather than spending time setting up formulas in Excel, compensation managers can focus on analyzing what the data is really saying and understanding the business impact of these insights. By leveraging software and its automation capabilities, organizations streamline their processes and realign resources to focus on activities that bring more value.
Software solutions like Willis Towers Watson Compensation Software serve exactly this purpose. They replace and automate some of the typical and time-consuming steps organizations take in their pay cycle like job matching, salary ranges update and salary survey participation. At the same time, they create a powerful combination of internal employee and external salary data to provide you with compelling insights and deeper perspectives on your pay programs.
Lisa Donaldson: Both internal and external data serve an important purpose and help organizations answer different questions. Internal data is critical to understanding your workforce in detail. As companies think about developing existing talent, it’s important to use your internal data to understand the employees’ current skills and knowledge, pay levels and any internal equity issues. External market data is equally critical to ensure your pay programs don’t lag behind your competitors. All organizations benchmark against external data in some way or another. A lot has already been said about how to best use market data. As various sources and types of pay data becomes more available and robust, finding better ways of managing these large databases of both internal and external data will be essential.
Marco Poggetti: Managing compensation data has become so complicated both in terms of quantum and sources. Organizations must manage a wealth of data hosted in different places and generated from different sources that are often dispersed and sometimes conflicting. Reconciling these data sources is critical to an organization’s ability to generate meaningful insights and make informed decisions.
By hosting both internal employee and external pay data, Willis Towers Watson Compensation Software and other compensation management tools like it act like a compensation data warehouse and become the repository for internal and external data from which organizations draw insights to get compensation right.
Marco Poggetti: As the COVID-19 pandemic hit and remote work became the new normal, many organizations had to rethink the way they organize work. Organizations found themselves fighting unconventional challenges with conventional tools like Excel. Our experience suggests Excel remains a common tool among HR teams to manage and store employee and salary data. However, organizations that adopted compensation management software and tools before the pandemic could more easily adapt to remote work and dispersed colleagues. Having multiple and instant access to consolidated data via a single, cloud-based source, regardless of where and when colleagues log in, made collaboration so much more effective. It also helped relieve concerns about data security and data integrity, as pay data could be stored on secure servers and teams could monitor changes and easily restrict access to sensitive pay data.
Lisa Donaldson: It’s difficult to get the maximum benefit from any purchased pay data and from your internal data if it’s inconsistent. Excel is a great tool with lots of flexibility, but it can sometimes be too flexible and not provide HR teams with enough structure or support through specialized processes like the compensation cycle.
Working with clean, organized data sets is of extreme value, especially when comprehensive pay analyses need to be consistently executed regardless of location and time. Organizing a massive amount of data can be a tedious task and it takes intuitive software and powerful technology to make that happen. Putting data into a software system automatically structures the data in consistent buckets saving you both the time and effort of doing manual data clean up in Excel.
Marco Poggetti: The increasing use of reliable data for decision making and the dispersion of the workforce caused by remote working have accelerated the need for an integrated market data solution that combines your internal employee and external pay data to provide valuable insight. As business activities resume, forward-looking organizations are transitioning to a more resilient and digital business model with more automated processes. To these organizations, I say that this is exactly the right time to invest in software to automate and future-proof your compensation management.
Lisa Donaldson: Every organization is different, but we believe compensation software is critical to any business’ success. Especially as companies grow and become more complex, the need to automate grows. HR professionals can spend hundreds of hours managing their annual compensation cycles through Excel, when the reality is, most (if not all) of the steps can be done in a couple of minutes via software. A good way to test the business case is to calculate the time it takes the HR team in using market data, to build salary ranges, etc. and multiply that by the cost just to hire a person.
Marco Poggetti: While we look forward to seeing a stronger collaboration between humans and technology, we recognize that compensation is not an exact science and there are very good reasons to allow for human intervention in pay decisions. There are limitations to what compensation software can automate and in order to extract the full value of data, we often look to create a partnership with the rewards teams we work with to create a co-sourced compensation model that relies on robust data, integrated technology, and reliable advice. This has always been our vision for compensation software and the right recipe to successfully manage compensation.
Lisa Donaldson: Establishing data partnerships has been central in our offerings. Finding a vendor that sees the value of data plus technology is essential to future-proof your insights. We expect software and technology to advance with further integration of AI and machine learning. At the same time, we also expect to see changes in pay data brought by the increasing role of skills in compensation.
Data is not going anywhere, and we all know its best practice to use data to make critical business decisions. The trend we see is not that we will have less data or less reliance on data but the other way around. Technology adoption in workplaces has risen significantly because of COVID-19 and organizations are much more willing to invest in automation to reinvent the way work is done. Every organization needs a partner to not only provide and interpret the data they need today and in the future, but also to help them build up their resilience and business intelligence.
A hectic compensation cycle is coming, and the wrong software will only slow you down. Find the right, intuitive technology that reduces complexity and supports your decision making. We’ll get you started.
