A recent study found that the profit margins of organizations that are more advanced in HR analytics (also known as people analytics) are 56 percent higher than those of less advanced organizations. With the data and analytical systems available today, HR can have a bigger positive impact on critical business issues than ever before. HR analytics can help organizations reap benefits across a number of domains, from hiring the right people to onboarding effectively to reducing attrition of high-value employees.
Yet even though HR departments are generating more data than ever before, they often struggle to turn their data into valuable insights. Recent research from BambooHR found that while 58 percent of HR professionals believe HR analytics are very important, only 16 percent viewed themselves as an expert in using HR data.
In this webinar, HR experts from PayScale and BambooHR will dive into how HR leaders can become proficient in using data to drive change in every area that matters, including recruiting, talent management, productivity, and retention.
3. Administrative vs. Cultural Tasks
58% of HR professionals believe HR analytics are very important,
but only 16% view themselves as an expert in using HR data.
16%
8. Benefits of a
Great Employee
Experience
● 28x: Fast Company’s Most
Innovative Companies
● 11.5x: Glassdoor Best Places
to Work
● 2.1x: Forbes World’s Most
Innovative Companies
● 4.4x: LinkedIn North America’s
Most In-Demand Employers
● 2x: American Customer
Satisfaction Index
9. Benefits of a
Great Employee
Experience
● 4x Profit
● 2x Average revenue
● 25 percent smaller
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What’s important to measure?
● Retention
○ “bad” attrition (voluntary, high performers)
○ voluntary in first 18 months
● Employee Satisfaction
○ a measurement of an employee’s “happiness” with current role
○ it does not measure how much effort the employee is willing to expend
● Employee Engagement
○ a measurement of an employee’s emotional commitment to a company
● Recruiting
○ time to fill (speed matters)
○ quality of hire
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Not all skills should be compensated
Ask yourself: is this skill…
● Technical or non-technical?
● Essential, useful, assumed or irrelevant?
Two ways to compensate skills:
● Include in market benchmark
● Reflect through range penetration
Most critical jobs to benchmark with skills are those where technical
skills provide important definition for the job beyond the job’s title.
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What compensation data
& metrics can do for your business
● Make sure you’re paying all employees fairly
and you’re following your compensation strategy
● How does your comp plan compare to the market?
● Is it rewarding the behaviors you need to achieve to business
objectives?
● Identify over / underpaid employees
● Uncover potential gender / racial pay disparities
● Help you clearly communicate your pay rationale to employees and
managers, increasing employee satisfaction
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Are we paying competitively?
KEY METRIC
Compa Ratio: Compare employee pay to the market values for a position
to which they’re assigned at your target percentile
10.8 1.2
At market Above marketBelow market
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Do we need to adjust our salary ranges?
Key Metric: % Difference Between Range Midpoint vs. Avg. Market Value
Software Engineers in Seattle Minimum 50th percentile Max
Your Range 90,000 130,000 170,000
Market Data 140,000
Percent difference 7.7%
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Pay Compression =
To avoid pay compression, regularly benchmark your positions to the market.
● Define your “competitive” set (location, industry, org type and org size).
● Benchmark your jobs to other similar roles in the market to identify the “going rate” for a position.
● Align pay for all employees in the same or similar job to your market rate.
Pay differentials that
are too small to be
considered equitable
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Conduct Pay Equity
Analysis to Detect:
● Pay gaps hidden within certain job titles or departments
● Underpaid high performers and overpaid low performers
● Significant differences in promotion rates, raise frequencies/amounts,
and/or bonus eligibility for similar employees doing similar work.
● Men and women who do similar work, but are not in the same
job/level
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Practical Advice & Considerations
● Make sure to involve legal counsel throughout the process
● Conduct your pay equity analysis ahead of budgeting season in order
to create an “equity reserve” to make pay equity adjustments
● Determine your optimal communication strategy for leadership,
employees and externally. Employment brand really matters in today’s
tight talent market!
● Remember it isn’t only about pay – understand what potentially
created the inequities and how to put strategic plans in place to
avoid future problems
32. Four Issues with Annual Reviews
● They take too long: Managers can spend up to 210 hours per year
doing performance reviews and employees can spend up to 40 hours.
● They’re subjective: The questions often reveal more about the manager
than they do about the employee.
● They’re infrequent: It's hard to remember what happened at the
beginning of the year when completing a review at the end of the year.
● Their purpose is unclear: Is the review to improve performance, to
justify compensation decisions, or to punish mistakes?
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What’s important to measure?
● Retention
○ “bad” attrition (voluntary, high performers)
● Employee Satisfaction
○ a measurement of an employee’s “happiness” with current role
○ it does not measure how much effort the employee is willing to expend
● Employee Engagement
○ a measurement of an employee’s emotional commitment to a company
● Recruiting
○ time to fill (speed matters)
○ quality of hire
37. Barriers to Gathering HR Data
● People have day jobs: If they don’t have the time to calculate their PTO
balance or include details in their time tracking, then they’ll choose to
focus on their duties.
● Incorrect data entry: Does the data need to be in a specific format,
especially when dealing with figures or dates? If there are requirements
your employees don’t understand, someone will have to fix mistakes.
● Poorly connected systems: If employees have to transfer data by hand,
there’s more opportunity for human error.
39. What to Look for in HR Software
● Delightful experience: How long does it take to access the software? To make
changes?
● Employee self-service: Can employees learn quickly to DIY?
Is it mobile friendly?
● Seamless integrations: Does the software integrate with other tools that you
use in HR, such as payroll programs, compensation management platforms,
performance management tools, ATS, time tracking, etc.?
● Support: How exceptional are people who can support and guide
you to success in implementing, rolling out and using the platform
you choose?
40. Takeaways
For HR Data to be useful, it’s important to put it in the
context of your values and objectives.
● Ongoing analysis helps keep your policies in
alignment with what your employees value
● Compensation analysis helps ensure fair pay
and helps you avoid salary compression
● An HR platform and satisfaction data help you
spot trends in your long-term experience
● Regular performance management provides
ground-level data and offers a chance to
improve the employee experience.
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BambooHR
Check out our resources on compensation.
payscale.com/compensation-today
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