Is It Time to Modernize
Your Compensation
Management?

Today's Presenters
Ruth Thomas
Chief Product Evangelist
Russ Wakelin
Chief Product Officer
Raj Cherukuri
Chief Technology Officer

Is it time to
modernize
compensation
management?

Today's Agenda
• Do we need to modernize compensation management?
• Five principles of modern compensation management
• What’s the future of compensation technology?
• Q&A

Today’s workplace
challenges
Pay
Low
engagement
Pay
Transparency Pay
Equity
Career
progression
Skill
shortages
Rapid
wage
growth
Hiring
freezes
&
layoffs
Pay
progression
Remote &
hybrid
work
Job
architecture
Categorize
skills
Skills
based
pay
Fair Pay
Labor
market
volatility
Personalized
reward
Pay
Compression

Poll Question 1: What are the key challenges you
are facing right now? (select all that apply)
A. Developing or revising our comp strategy
B. Creating or revising comp structures
C. Creating or managing job architecture and leveling
D. Investing in new sources of pay data
E. Budgeting and getting approval for pay increases
F. Getting more from compensation management software
G. Managing pay for a remote workforce
H. Creating or managing a skills-based pay structure
I. Creating or managing variable pay
J. Conducting pay equity analysis
K. Conducting manager training on pay communications
L. Preparing for or increasing pay transparency
M. Creating or getting more use out of total rewards statements
N. Managing pay compression

Top priorities for 23
include creating or
revising comp
structures, revising
comp strategy and
getting budget
approval for pay
increases.
Source: Payscale’s Compensation Best Practices Reporting Data 2023

Source: Deloitte: Compensation Management Solutions: Market Primer 2021
Only 9% of companies report being ready to address
the changing nature of compensation strategies.

Between 2021 and 2022 we saw a 10% increase
in organizations who are implementing a
compensation strategy – However 50% were
looking to update their compensation strategy*
Source: Payscale’s Compensation Best Practices Reporting Data 2023

The compensation market needs help adjusting to
the new talent landscape and transparency trends
64% of organizations will adjust their compensation structures in 2023
42% of organizations will adjust their compensation strategy for 2023
37% of organizations are rapidly trying to improve pay data, structures
and pay equity in response to pay transparency legislation.
Source: Payscale’s Compensation Best Practices Reporting Data 2023

5 principles of
modern
compensation
management

Modern compensation practices require:
Increased
agility
Collaborative
practices
Greater
transparency
An employee
experience
Manage increasing
complexity

Increased
agility
• Business agility is driving talent agility
• We need to build resilient compensation practices so
they can adapt to labor market trends more frequently than
annually
• Fast moving jobs are driving the demand for more real
time data points and on-demand compensation
recalibration

Organizations shifting slowly from annual cycles
Payscale’s Compensation Best Practices Reporting Data 2023

• Emerging body of pay transparency legislation driving
change in compensation strategy adoption
• Requires a proactive rather than defensive approach to
stay ahead
• Identify what frameworks you need to put in place to
support a more transparent approach
• Increase stakeholder engagement with training and
communication
Greater
Transparency

Organizations are making gains on their
transparency targets
Source: Payscale’s Compensation Best Practices Reporting Data 2023

Collaborative
practices
• Transparency driving the requirement for increased
collaboration
• New stakeholders need visibility of job and
compensation data during compensation and talent
lifecycles
• This is driving the requirement for real time collaboration

Job Description: Collaborate, Approve & Price Jobs

Choose data sources that reflects
the market & your competition
around the world
Leverage Payscale data and/or
manage and participate in third
party surveys.
Understand Competitive Market
& Determine Data Strategy
Benchmark jobs at scale in alignment with
your pay strategy
Develop your job architecture that supports
the complexity of your entire organization
Reporting makes it easy to make pay
decisions but budget in mind
Benchmark Jobs and
Create Pay Structures
Communicate total compensation internally by securely
delivering customized compensation statements
Confidently develop competitive salary ranges in line
with your strategy for external transparency
Communicate Compensation
Internally and Externally
Facilitate Collaborative
Compensation Planning
Rapidly build, standardize and
maintain job descriptions to ensure
accurate and consistent pay.
Understand Employees Jobs
Complete Pay Equity Analysis
Collaboration across the Payscale portfolio
HR Market
Analysis, Employee
Reported, Peer
Payfactors,
MarketPay
The fair pay
journey with
Total Rewards
Statements,
Payfactors,
MarketPay
Automate the merit cycle including HR,
Comp and front-line management teams,
empowering more meaningful pay
conversations
Enforce budgets, strategy and timelines
from a single location
Compensation
Planning
Pay
Equity
Understand representation and statistical
pay gaps within your organization
Complete remediation planning based on
your budget
Compensation
Philosophy and
Strategy
Job Description
Manager,
MarketPay Jobs
Powered by
JDXpert
Develop an internal philosophy that
creates consistency in how pay
decisions will be made
Strategic partnerships,
Managed services

Fair Pay Check

• Pay was employee’s primary concern in 2022 and is
playing a vital role in the employee experience
• Other talent management practices have pivoted to deliver
an employee experience whilst compensation has
remained something that is done to you
• Employees expect a consumer like experience to access,
select and model their compensation - today we need to
put people at the center of compensation
Employee
Experience

Total Rewards Statements

Interactive Offer Letter

Poll Question 2: What employee experience do you
offer during the compensation lifecycle?
A. Access to job descriptions
B. Access to pay framework information
C. Access to total compensation statements
D. Ability to model compensation outcomes
E. Ability to make elections during the compensation process
F. Choice of employee benefits
G. Choice of compensation elements (e.g., base/variable/stock)
H. Candidate access to pay information
I. I don’t know

• New workforce trends are driving compensation complexity
• Shifting work models
• Evolution of skills and skills-based pay
• Long anticipated move to personalization of reward
• Need to calibrate an increasing number of data points to
provide insights and to fuel more agile HR outcomes (AI)
• Transparency is also increasing pressure to get pay right so
more focus on evidence-based compensation
Manage
increasing
complexity

Poll Question 3: Which one, of these 5 principles,
would you consider needs to be tackled first ?
A. Increased agility in our compensation processes
B. Greater transparency and the frameworks to support this
C. Increased collaboration with stakeholders
D. Improving the employee experience of compensation
E. Confidence in our ability to manage increasing compensation complexity
F. I am not sure

The future of
compensation
technology

Ventana Research
• Nearly three-quarters (72%) of
organizations use spreadsheets in
their compensation management
process for budgeting, forecasting
and advanced modeling
• More than one-quarter (26%) are
exclusively using spreadsheets
• While more than one-half (57%) of
organizations cite spreadsheets as
a data governance issue.

The future of compensation technology
Real time recalibration and automation to streamline repeatable
processes in support of agile compensation
Solutions that support increasing demands for pay transparency and
communications
Workflows that facilitate multi-stakeholder collaboration
Platforms that engage employees and put people at the center of
compensation
Ability to perform complex calculations and analyses with increasing
leverage of AI

Recommendations
Consider how the 5 principles might apply to your organization
Evaluate how your compensation strategies and programs align
Understand where the gaps are, what do you need to do to fill them?
Explore how technology can facilitate the transition to modern compensation
management
Build the business case

“
”
If the rate of change on
the outside exceeds the
rate of change on the
inside, the end is near.
Jack Welch

Gain a competitive edge in a fierce
talent market while building a more
fair, equitable and transparent pay
strategy
Employee Reported
The world’s largest real-time
salary database
HR Market Analysis
A composite of analyst curated
employer reported survey data
Peer
A transparent & dynamic HR
reported data network
Market Pricing
Pay Equity
Pay Structures
Compensation
Planning
Survey Management
& Participation
Reporting
& Analytics
Total Rewards
Statements
Job Descriptions
Management

Q&A
Feel free to ask any questions in the chat!

Mercer’s
2022 Inside
Employees’
Minds©
study.
Mercer 2022 Inside Employees Minds Report

Compensation leading driver of voluntary turnover
35%
11%
11%
10%
8%
7%
4%
4%
3%
3%
2%
1%
18%
9%
17%
11%
7%
10%
13%
4%
4%
3%
2%
2%
0% 10% 20% 30% 40% 50% 60%
Compensation (i.e., pay is not competitive, there are pay equity problems, compression,
etc.)
Employee entitlement/grass-is-greener syndrome
Limited advancement opportunities
Burnout due to being understaffed/overworked
Management skills
Desire for greater workplace flexibility/remote work
Important benefits are missing or not competitive
Interpersonal conflicts within teams
Arduous or unpleasant work conditions
Company culture and values
Unsure
Outdated or underserviced technology that inhibits productivity
First Second
Payscale’s Compensation Best Practices Reporting Data 2023