Pay reviews can be difficult to manage. In the past, pay pots have enabled people leaders and finance directors the ability to allocate awards effectively, given the cost of living and labour market conditions and address any anomalies. However, this year presents new challenges as pay awards are likely to be more modest, with average pay settlements expected to be around 4%, down from over 6% in the past two years, as predicted by Innecto and confirmed by The Chartered Institute of Personnel and Development (CIPD) recent report.
Smaller pay budgets can be a challenge for any organisation, especially when employees expect wage growth. A well-thought-out pay policy is essential to balance external market conditions, internal equity, and value recognition. Retention, recruitment, fairness, and equity are essential principles for organisations.
Although pay policies may be in place, it's not always guaranteed that they will be realised, that pay principles will be applied correctly and that the policy will work as expected and not against it.
Data insights can help ensure that reward strategy and reward policies are being followed, or whether there is a need for review. For example:
- If your reward strategy is to pay at the market median, how will proposed salary changes due to pay review impact this?
- How is pay review going to impact where people sit in your pay ranges?
- Is pay review going to improve pay equity or widen pay disparities?
Being clear about the impact of your pay review before making changes may not always change the decision, but it enables HR to be on the front foot and to be ready with a narrative to the business and stakeholders about the impact pay review will have on other key priorities and any subsequent actions.
The use of HR technology is one way to get underneath this. While the right technology can save time provide better visibility and insights and streamline the process, it's important to remember that whilst it cannot replace good communication and conversations about pay reviews, it is a vehicle in which to have them, using the insight which is based on facts rather than assumptions.
Revolutionising Pay Review Processes
Enter Innecto's Advance, a technology solution designed to transform the management and implementation of pay review processes. Let’s explore how Advance addressed the pain points of our client and redefined their approach to compensation management:
1. Data Gathering Made Seamless
Data gathering, often a laborious and time-consuming endeavour, was streamlined through Advance's intuitive platform. By providing a structured process flow and guidance on data requirements, Advance empowered our client to collate and review essential information efficiently.
2. Dynamic Decision Making Through Data Oversight
The nuances of pay decisions, encompassing factors such as performance evaluation and budget constraints, were brought to the forefront through Advance's dynamic modelling capabilities. By enabling HR and decision-makers to simulate various scenarios and assess their impact on budget allocation, Advance facilitated informed and equitable decision-making.
3. Prioritising Fairness and Equity
In an era marked by heightened awareness of diversity and inclusion, Advance emerged as a tool for promoting fairness and equity in pay practices. By integrating company-specific policies and demographic data, Advance facilitated a nuanced assessment of pay decisions, ensuring alignment with organisational values and regulatory standards.
4. Streamlined Administration and Reporting
The administrative burden associated with pay review processes was alleviated through Advance's user-friendly interface and automated workflows. With individual logins for managers and real-time synchronisation of data, Advance minimised the risk of errors and delays, empowering HR to focus on strategic initiatives.
Embracing Change - The Path Forward
Innecto's Advance is a technology solution that can revolutionise the management and implementation of pay review processes. It streamlines data gathering, enables dynamic decision-making through data oversight, prioritises fairness and equity, and streamlines administration and reporting. By leveraging innovative solutions like Advance, HR directors can drive positive outcomes for employees and organisations alike.
