Delivers Data-Driven Insights to Pay Employees Competitively and Fairly
Zenefits announced the availability of Compensation Management, a new app within the Zenefits People Platform. Based on actual salary data from small businesses nationwide, Compensation Management is the first software tool designed specifically to take the guesswork out of competitively and fairly paying the people behind 99.7% of American businesses — those in small and medium-sized organizations with less than 500 employees.
While compensation benchmarks and software tools exist on the market, both are priced and scoped out of range for small businesses and typically targeted at large enterprises. As a result, small companies are left to make their best guesses based on their own experience or on employee-reported salary ranges collected from free “crowdsourced” sites such as LinkedIn or Monster.com with inherent data inaccuracies. With the average cost to replace an employee at 33% of their salary, according to the Work Institute, making poor salary decisions can have a significant impact especially on small businesses.
“Small and midsize businesses are the backbone of our economy, yet when it comes to access to affordable solutions to help power these businesses forward, they are continually underserved,” said Zenefits CEO Jay Fulcher. “To create a strong, competitive and fairly paid workforce, companies of all sizes need data and actionable insight to guide their decisions. By leveling the playing field around pay, we’re one step closer to eliminating the gender pay discrepancy.”
Based on real, anonymized salary data from across the US, Compensation Management can help small businesses identify market competitive and fair wages by role, industry, and geography. Further, the app poses questions during set up to help business users determine the compensation philosophy that best maps to each company’s unique priorities and values. Then it provides insights on salaries for new hires, new promotions and new roles as the company grows. Further, it helps young businesses keep a pulse on pay equity across its organization, aligning pay to role and performance, which can all be tracked in the Zenefits platform.
Key features in Compensation Management include the ability to:
- Confidently set salaries when filling open roles: Run salary benchmarking reports that customize data for industry, geography, job, and seniority level to ensure a company is using the most accurate, relevant data to set salary levels for new hires.
- Create benchmarks based on actual employee salaries: Get relevant data by specifying the industry and geographies relevant for each company and map the business’s workforce to a standardized list of roles and experience levels for an exact salary comparison with similar positions at other companies in the same region(s).
- Quickly and easily assess the health of a company’s current compensation practices: Look across the organization to determine where the company is overpaying and underpaying; then, narrow the search by location, department, role and gender for additional insights and recommendations on potential compensation corrections.
“As a consulting business, employee compensation is our biggest cost and our biggest strategic lever,” said Dawn Palcisko, Chief Human Resources Officer at Paragon Consulting, in Ohio. “I’m used to having compensation tools and data options to support my former work at large enterprises. So I was surprised to find no reliable nor affordable tool to support compensation decision-making for our small business. This is why Zenefits’ new product is exciting to me; it not only fills a market void, it adds tremendous value to the integrated HR, onboarding and benefits automation I have with Zenefits. I’ve already used its broad data set to determine where we pay in our market.”