As the global economy slowly emerges from the Covid pandemic, one of the hottest topics among founders, HR departments, and business owners is how to structure employee compensation in this new environment. There are three major factors driving the compensation conundrum—historically low unemployment numbers, the evolution of the hybrid workplace, and the increased reliance on technology that naturally follows the remote work trends.
On top of all these shifts in the marketplace, you still have to manage your company's pay structures and compensation strategies. If you're like most companies, you rely on outside survey data to find the remuneration benchmarks that are the foundation for your company's compensation analysis. This is a complex, outdated and nuanced process that challenges the most experienced HR professionals, not to mention founders who are more focused on growing the business than they are on pay scales.
The Bureau of Labor Statistics (BLS) and other data purveyors could be a starting place to find compensation data. They track salaries and compensation packages based on a few factors, such as geography, occupation, industry, and demographics. While there are several companies who collect and analyze salary structures and packages across the country, the data that these firms present may not be all that accurate.
For example, compensation data is not often broken down by the kinds of compensation that matter most to startups—equity compensation. Additionally, this information is self-reported and is also often out of date by the time it is published.
With so many variables swirling around the US job market—low unemployment, rising inflation along with the accompanying cost of living increases, and the residual uncertainties of new Covid variants—it's imperative that you have up-to-the-minute, actionable compensation data when you're developing pay packages.
Welcome's Compensation Data lets you see real-time compensation info, so you can stay as competitive as possible at any given time. Founders who know their exact market temperature can ensure their offers are in line with other companies in the same industry.
Companies that work with traditional research firms for compensation data self-report their numbers, so there's a time lag, the possibility for human error, and the chance that the HR employee tasked with reporting the numbers simply forgets.
Finding compensation data that's quantifiably comparable to your company is like finding a needle in the proverbial haystack. For founders, it's an even bigger headache because you're still incubating, meaning that you probably haven't had the opportunity to define your place in the market—where you want to be in terms of compensation.
A compensation data analysis that's done well is not just about compensation benchmarking. Every compensation plan has to consider the bigger picture—the whole company, the market, and your place in it.
Review details on all the components of how other companies pay their employees, from hourly rates for junior employees, to bonuses and incentives for the C-suite. How do you want to measure up?
Once you've determined how you want to position your company in the market, you can better analyze published benchmark data. Keep in mind that as you grow, your compensation strategy will need to evolve as well.
The better your compensation data the more competitive you'll be. However, compensation data is hard to find and it's not always reliable. That’s why instead of relying on the standard compensation survey, we seamlessly integrate with your existing HR tech software and allow you to upload your own levels and bands. Then our technology helps you benchmark your data against your team, levels and bands and keep you apprised of not only your own compensation trends, but how you stack up against the market.
As the employment landscape is changing for 2022, some compensation trends are coming into focus for next year and beyond. If your company is in a hybrid or remote work mode, it's critical that you're current on these trends, as your response to them can have a huge impact on your talent engagement and retention.
Some industries have been embracing a remote workforce for years—the technology industry comes to mind—and at least a hybrid workplace model appears to be here for the long haul. For founders, this has meant some cost optimization as your workforce is home and your overhead is less. Should you share some of those savings with your team? One of the shifts in remote work is that people tend to work more flexible schedules—should your compensation plan be structured around hours or performance? Finally, remote employees can literally be anywhere, and these geographic variances factor into pay.
Fair pay—equity—is a hot button issue for employees, no matter their position in your company. The demand for pay equity is coming from all sides, including investors, customers, regulators, and employees, and it is something that is a critical component of a competitive compensation plan. The benefits of offering pay equity are obvious, but a subtle benefit is that it leads to more transparency about your compensation philosophy, and allows you and the HR team to highlight the direct links between employee contribution and corporate performance for the bottom line.
Transparency means that you are up front with your team about your finances and how they affect raises, bonuses, and other incentives.
Welcome's Compensation Data tool integrates all your HR stack into our platform, and compares your real-time data to your competitors. You’ll have access to real-time information to stay relevant and actionable. Our data is broken down by geography, position, and other key factors. Our results include cash and equity compensation, and also identifies percentages and payout structures, an invaluable tool for companies looking to scale up their revenues.
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