How employers can use HR tech to improve pay transparency
Pay data usually sits in spreadsheets or databases and is handled by a fraction of staff in each company.
Yet we know, genuine pay transparency relies on a greater number of people being able to access, understand and value that data.
Using technology can help bridge that gap.
Gain greater insight from your pay data
In a spreadsheet, even the best pay benchmarking data is flat.
A job is matched to a code in a survey that gives you the data against the market.
It is useful to a point, but new technology can take it a step further.
Inform pay decisions: A specialist digital benchmarking tool like PayLab uses more compound, analysed data to inform pay and recruitment decisions, showing HR and managers how individuals compare to the market, while also overlaying gender, ethnicity and performance data to encourage pay parity.
Recognise and grade comparable work: Understanding comparable work and roles of equal value is an important step towards more transparent communication and reducing the risk of equal pay challenges. A digital job evaluation system like Evaluate helps HR grade roles at similar levels fairly and consistently, and provides a framework linked to a company pay structure.
Employees can see and understand how roles are being evaluated, and employers have greater confidence that their job architecture is robust enough to flag similar work, or work of equal value. The digital modelling tools also give scope for aspirational and proactive change management.
Give managers more ownership in pay review decisions
Pay review is a laborious and time-consuming process and, perhaps understandably, many organisations keep it hidden away with HR and finance.
Increasingly, the trend is to breathe more transparency into the process, and to enable delegation.
While it is difficult to do this using flat spreadsheets, a pay review tool like Advance can give managers more ownership and visibility in pay decisions.
Customisation: By configuring the system to your internal pay practices and policies, you can keep track of spend and model how any decisions you make could affect your pay positioning year-on-year.
Bring data to life: Clever dashboards can make pay data available to managers and more appealing to workers.
By gaining a better understanding of how pay works, managers can feel more empowered when they speak with their teams armed with the data and tools to know whether they are paid competitively in the market.
Fill information vacuums: Many workers can think that they are underpaid, when in fact they are not.
Increasingly, employees are using open-source data platforms like Glassdoor and PayScale to gain a better understanding of the market and build confidence talking with managers.
However, this data almost always lacks context, which can lead to misinterpretation.
By showing workers actual pay data we can help fill this information void will numbers they can trust.
Drive pay equality
Looking through the lens of gender and ethnicity pay, the requirements in gender pay reporting are still set at a low bar.
Lots of our clients have been doing gender pay reporting for five years, without any real change because the base requirements only scratch the surface.
In-depth analysis: New technology can analyse these gaps in greater detail and understand what is driving them. Reports can be generated by department, gender or ethnicity, letting companies decide and communicate how achievable changes might be to internal pay differentials and disparities against the market.
Enhance pay parity: A system like Advance will also flag key indicators like the proportion of pay increases by gender, ethnicity, service level, performance or geography to identify any bias or risk to fairness in your existing or aspirational policy.
Enable smarter recruitment: With more sophisticated data analysis recruiters can also gain greater insight into each role and be more self-sufficient, rather than relying on HR or reward teams.
Level the playing field around benefits
Finally, there is no doubt that tech is already playing a major role in levelling the playing field in terms of employees’ access to benefits.
While this may not relate directly to pay transparency, giving every worker the same 24/7 access to their benefits through a smartphone app like HAPI moves us further towards the equality and fairness that transparency relies on.
Individual benefit levels may vary, but the method and the means of accessing them is universal.
In summary
By crunching the numbers and presenting them in a way that makes them more palatable and accessible, tech is helping HR and business leaders create an information-led trickle-down effect.
As a result recruiters, managers and employees can be more self-sufficient in using data to make better decisions and improve organisational transparency.
Supplied by REBA Associate Member, Innecto Reward Consulting
We have more than 20 years' experience in getting employers' pay and reward working harder for them.
