Top Performing Companies Are Proactive, Transparent, and Communicative About Pay, Payscale Report Finds
SEATTLE, May 29, 2024 (GLOBE NEWSWIRE) -- Today, Payscale Inc., the leading provider of compensation data, software and services, released its 2024 Top Performers Report. Leveraging data from Payscale’s flagship Compensation Best Practices Report, the new research examines what differentiates top performing companies, defined as organizations who self-report that they exceeded their revenue targets in 2023, from non-top performers: those that missed their revenue goals. Payscale found that being proactive, transparent, and communicative about pay are leading factors in what distinguishes top performing companies from their peers.
“Today’s employees expect visibility into the ‘why’ behind their pay. Seeing such a clear and measurable connection between proactive, transparent, and communicative pay practices and organizations that exceed revenue targets should make every executive pause,” said Lexi Clarke, Chief People Officer at Payscale. “As economic and labor dynamics continue to evolve, the pursuit of revenue targets will become increasingly complex. Today’s companies must ensure they have the tools in place to create purposeful compensation practices that engage their workforce to achieve their objectives.”
Key takeaways on the anatomy of a top performing company:
Company size does not matter when it comes to performance. Being a large company with deep pockets is not a prerequisite for implementing compensation best practices that support revenue outcomes. Top performers are found equally in both smaller and larger organizations.
- About one-fifth of organizations (21%) – including large enterprises and small businesses – exceeded their revenue targets in 2023, despite challenging economic conditions.
Top performing companies are proactive about pay communications. This is one of the biggest differentiators and a driving theme between top performers and non-top performers.
- The majority of top performing organizations (57%) embrace pay transparency and share pay ranges even when not required by law, but less than half of non-top-performers do so (43%) – a 14% difference that jumps to 19% when comparing large organizations.
- Nearly three quarters (71%) of top performing companies address underpaid employees proactively and regularly. On the other hand, 32% of non-top performers only address underpaid employees reactively, if an employee or their manager brings it up.
- Over half (52%) of top performing companies provide always-accessible pay communications to their employees that explains the ‘why’ behind their pay, compared to just 35% of non-top performers (a difference of 17%).
Purpose-built compensation technology is powering top performers’ decision making. Leveraging the latest compensation technology underpins confidence in pay decisions and leads to better outcomes.
- Top performers (59%) are more likely to be using, purchasing, or evaluating compensation management software in 2024 over under-performing companies (50%).
- When it comes to data sources, a third of top performers (31%) believe that it’s important to invest beyond traditional salary surveys with dynamic data sources in order to stay abreast of fast-changing market conditions (only 17% of non-top performers do).
- Overall, 9% of top performing organizations are currently using AI to benchmark, price jobs, or predict pay ranges (12% if the top-performing organization is a large enterprise), compared to just 3% of non-top performers, small or large.
“The message is clear: companies that exceed revenue targets are purposeful about their pay practices. With an increased use of compensation management software, these organizations have the tools in place to be proactive, transparent, and communicative about pay,” said Ruth Thomas, pay equity strategist at Payscale. “These organizations demonstrate they value their employees by being one step ahead when it comes to pay discussions and decisions. As a result, they are poised to lead the way in performance outcomes.”
Payscale’s Top Performers Report examines responses from a survey of 5,735 compensation professionals and HR leaders gathered between October and December 2023. Also utilized for Payscale’s comprehensive 2024 Compensation Best Practices Report, this report uses the data to spotlight the widest differences between top performing and non-top performing companies. For more insights, methodology, and to download the full report, visit payscale.com/research-and-insights/top-performers-report.
About Payscale
As the industry leader in compensation management, Payscale is on a mission to help job seekers, employees, and businesses get pay right and to make sustainable fair pay a reality. Empowering more than 50% of the Fortune 500 in 56 countries, Payscale provides a combination of diverse and dynamic data sources, experienced compensation services, and scalable software to enable organizations such as Angel City Football Club, Panasonic, Mars Global, eBay, American Airlines and PetSmart to make fair and appropriate pay decisions.
Pay is powerful. To learn more, visit www.payscale.com.
Contact: Press@Payscale.com
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