Compensation Trends: Disruption in Action at the 2017 Total Rewards Show


The keynote address at this year’s WorldatWork 2017 Total Rewards show was by Peter Sheahan, author of Matter: Move Beyond the Competition, Create More Value, and Become the Obvious Choice. Sheahan spoke compellingly about the need for today’s organizations to overcome the “relentless force of commoditization,” where new ideas become table stakes in an ever-shortening period of time and the winners are organizations that keep innovating. He said, “Big ideas always start with questioning what we think we know.”

Sheahan’s talk seemed to resonate with the attendees at the Total Rewards Conference. In hundreds of conversations over the course of three days, I sensed a sea-change. In years past, PayScale has faced crossed arms, skepticism, and comments like, “I don’t believe in user-submitted data,” because we were doing something different (innovating?) in the world of compensation management. We were offering up our modern, mammoth data set of crowdsourced, vetted and validated “employee-sourced” data and traditional compensation pros were aghast.

Not this year. It seems that for the first time — influenced by Mr. Sheahan or by the pace of change in their own organizations — compensation professionals are opening up to the idea that data from sources other than consultant salary surveys might offer them the opportunity to compete in the current talent landscape in a way data collected last year doesn’t. Of course, we have changed too, as we deliver on our vision for modern compensation. We now have products like MarketPay that offer sophisticated tools to manage any market data including traditionally sourced data.

But change is again knocking on the door. I predict that soon compensation teams, people analytics teams and/or workforce analytics teams will be using some of the data they’ve always used, some new data types like crowdsourced data, and some data types we haven’t even thought of yet — all in service of attracting great talent, and getting them to stick around.

'Big ideas always start with questioning what we think we know.' – Peter SheahanClick To Tweet

Whither Comp Pros?

“Digital disruption” is a pervasive theme at some events I’ve attended outside the compensation realm this year. Wouldn’t the idea of crowd-sourced transportation (Lyft, Uber) have seemed crazy in 2008 (a year before Uber was founded)?

Fifteen years ago, auto dealers held all the information cards (information asymmetry). In 2017, car shoppers can find the actual price of their preferred auto, offer multiple dealers a chance to sell the car at a fair profit, and close the deal, barely having to enter the dealership. Similarly, a more open market for compensation information has meant that job seekers and current employees now come to the table with their own set of information, ready to negotiate and discuss.

While some bemoan this development, wishing for simpler times, this new normal means having to be more “on your game” with regard to not just why you pay the way you do, but also how you pay, how you ensure fairness, equity, etc. so that top talent continues to choose you, and not your competitor. What is the role of a compensation analyst, a director of compensation, in this new world? Do they take on more or do they move to the sidelines because managers and employees already have the data they need to engage in a substantive discussion?

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The Perception Game

Several of the conversations I had during the Total Reward Conference were with people contemplating the changes and challenges in how they communicate compensation to employees, i.e. “managers aren’t very good at this…”

It seems comp pros are being challenged more frequently, and VPs of Total Rewards are trying to figure out how to get credit for the programs they are putting in place for employees, which they think are great, but which sometimes land with a “meh.” Sometimes, employees don’t really care. If they think they’re being taken advantage of, they’re not engaged. And this perception can exist whether they are paid fairly or not.

In the future, the job of rewards professionals will be to shape the perception of the company’s pay brand in service of its main business goal — beating your competition in welcoming and retaining talent.

Listening to Customers

It’s been a year since PayScale added MarketPay to our business, and we’ve learned a lot about enterprise total rewards from our new colleagues. We hosted an event for about 50 of our MarketPay subscribers on Thursday after the Total Rewards Conference to share our product vision as well as hear some of their real-world stories about using our technology to help them better execute compensation in their organizations.

My favorite quote this private event came from one of our customers, Lindsay, who presented on her company’s global total rewards communications program and how they use MarketPay: “You can still be the sheriff, but you don’t have to be the deputy.”

Tell Us What You Think

Has your organization changed compensation data sources in recent years? We want to hear from you. Tell us your story in the comments.

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