Five strategies for managing compensation in uncertain times. 

By Nancy Romanyshyn

There’s a large amount of pressure on leaders in compensation and total rewards as they try to build and present new pay strategies, even as government regulations continue to evolve. More and more U.S. states are implementing new salary disclosure laws, while the EU Pay Transparency Directive is looming. On top of that, compensation and HR leaders are expected to be mini-economists as they confront broader economic and workforce uncertainties.  

So how can compensation leaders navigate the current climate and bridge the gap between transparency mandates and effective, real-world execution? These key strategies can do just that all while controlling costs without creating additional work or risk. 

Establish a Firm Foundation and Align on the Most Pressing Issues 

Begin by aligning with internal stakeholders on top compensation priorities. Chances are that everything can’t be addressed all at once, so focus efforts on high-impact areas. For example, areas where regulatory requirements will be the strictest (e.g., countries in the EU), retention in segments of business-critical talent, or where talent competition is fiercest. Given the current constant pace of change, it’s important to set a baseline strategy, but revisit periodically (like each quarter) to ensure it is aligned with the broader business strategy. 

Put the Right Compensation System in Place 

Companies need the power of technology to create a compensation system that efficiently analyzes, integrates, and refines compensation decisions and disclosures at scale. Key components of this compensation system include the following. 

• Pay equity. This analysis should be performed regularly to keep up-to-date with workforce changes; once a year won’t cut it. Using purpose-built software, companies can configure across different segments of the organization, tailor analytics to model risk scenarios and legislative requirements, and model changes and budgets before taking action. That way you can make smart, equitable decisions aligned with your compensation strategy and budget. 

• Compensation consistency. This analysis can reveal where, why, and for whom pay is inconsistent. When using software with robust data visualizations, HR leaders can surface individual employees whose pay is significantly different than that of their peers. Such analysis can also detect any patterns that may unintentionally disadvantage certain groups—whether in the way salary increases are distributed, how promotion timing plays out, or how manager discretion is applied. Proper analysis gives visibility to support consistency and fairness, and to ensure that compensation throughout the organization aligns with intent. 

• Pay policy. This analysis can reveal the disconnects between pay designs and pay delivery. With this analysis, organizations can better visualize where variables like starting salaries, off-cycle adjustments, or job architecture aren’t aligning your design and whether those deviations are justifiable, or send signals that policy and practice are out of sync. It’s especially useful for spotting trends across departments or geographies that might be pulling away from the intended approach. 

• Market comparison. This analysis helps companies understand whether their paying competitively. Nimble software solutions like BetterComp help not only conduct and update market pricing efficiently at scale, but the software helps understand changes in critical geographies and markets. The ability to ensure the accuracy of level matches and model salary ranges helps see how market practices and movement compare with the way employees are paid. Complementing traditional, often market-lagging compensation survey data resources with more in-the-market moment data is also extremely helpful in assessing critical skill sets and markets. Real-time offer data from providers like Compa gives insights that are needed to make more surgical moves when it comes to pay design and practices, especially in the case of bonuses and equity. The data are more responsive to market fluctuations and can help better navigate near-term talent decisions. 

• Virtual comp analyst. Wish there was a way to take action based on data analyses and have coaching every pay decision? Now, companies can by using software solutions that combine internal equity, market data, and organizational pay policies. Recruiters and managers receive a well-aligned compensation recommendation so HR leaders are not fielding as many one-off questions or seeing pay creep up over time. It’s like having a compensation analyst advising every single pay decision. 

• A global pay reporting control center. Whether responding to the EU Pay Transparency Directive, U.S. state-level disclosures, or internal human capital metrics goals reporting, a reporting control center helps companies stay ahead of compliance while keeping internal reporting clean and credible. 

Optimize Resources and Get Stakeholder Buy-In 

Investing strategically in compensation technology (including the latest AI-driven advancements) supports retention, rewards desired behaviors, and controls costs. It also reduces risk while supporting increasing transparency and continuous improvement. But how will the right stakeholders get on board? HR must clearly define the real-world applications and their benefits in a succinct way. 

Leading companies pilot new approaches and expanded use cases as part of their adoption strategy. This allows them to learn from the experience, remove potential blockers, and record gains they can then use to make the business case for greater investments. They typically begin with a core value or specific strategic pain point. 

For example, at Expel, a cybersecurity company, transparency is a core value. As employees asked more questions about fair pay in the wake of pay transparency legislation, Expel used pay equity analysis as a way to validate its pay practices and explain compensation with clarity and confidence. 

In the case of Elevance Health, they wanted to ensure they demonstrated their commitment to fair and competitive pay, and they knew a key challenge was in the job offer process. They incorporated pay equity analysis into their process, ensuring that offers were both fair and competitive. Over time, this led to a 25% reduction in remediation costs, as well as a 6% decrease in time-to-fill and a 6% increase in offer acceptance rates. 

Stay Plugged into Legislative Changes 

For compensation professionals, especially for global organizations, it’s crucial to stay on top of changing and emerging legislation. Whether it’s new U.S. state pay-transparency requirements or sweeping legislation like the EU Pay Transparency Directive, evolving policies will have implications on compensation design and administration. 

Remember even though all companies aren’t required to comply, some competing companies will have to and talent will notice. For example, pay transparency legislation has led to an increased expectation for greater transparency from job candidates and employees. Employees are asking more questions, and job candidates may not apply to jobs that don’t provide salary information up front.  

Compensation professionals should take a tech-enabled approach to this. They can also as follow people on LinkedIn that provide trustworthy updates on emerging trends; subscribe to sites that are frequently updated and provide alerts as new laws are enacted; and leverage software that provides automatic updates about changing legislation. 

This will ensure HR can continue to shift practices in a direction that are not only compliant, but helps maintain a consistent employee experience by being responsive to local markets. 

Connect with Other Compensation Professionals 

One thing that can’t be entirely replaced by technology is the support and information gained through connecting with other comp folks. Compensation professionals need one another now more than ever as compensation design itself changes in light of new ways of working. Sharing information and ideas is critical. 

Attend the webinars and LinkedIn Lives, but be sure to also attend conferences and meetings with local compensation professional groups. This network of compensation experts will help evaluate goals from a new perspective and help determine what’s right. 

Managing compensation in uncertain times is a challenge. But with strategic investments, HR can build a compensation system that is responsive to changing markets and effective at driving the behaviors needed for company’s success. 

Nancy Romanyshyn is senior director of total rewards strategy and solutions at Syndio.