On a recent episode of the Comp & Coffee podcast, host Ruth Thomas was joined by Amy Stewart, Associate Director of Content Marketing, and Lulu Seikaly, Senior Corporate Attorney. Here’s a recap of the discussion and answers to top questions about compensation best practices.
1. What is the Compensation Best Practice Report (CBPR) and what does it cover?
The CBPR is Payscale’s annual report that analyzes data from a survey conducted in late 2023, released in March 2024. It includes insights on compensation management, such as pay increases, compensation strategy, salary data usage, and trending topics like AI, skills-based pay, unions, minimum wage, and pay transparency.
2. What are some key findings on pay transparency from the CBPR?
Sixty percent of organizations are now publishing pay ranges, up from 45 percent last year. Pay transparency impacts employees significantly, with 27 percent asking more questions about their pay and 14 percent quitting after seeing higher-paying job postings elsewhere.
3. How is pay transparency influencing compensation strategies?
Pay transparency is forcing employers to be more intentional and rigorous in their compensation strategies. Organizations that fail to adopt pay transparency risk losing top candidates and performers, facing legal penalties, and dealing with public relations issues.
4. What are the trends in pay communications according to the CBPR?
Fifty-one percent of organizations train managers on pay communications, marking the first year this figure has reached half. Effective pay communications are crucial as they directly impact employee engagement and trust in pay practices.
5. What was the average base pay increase in 2023 and the predicted increase for 2024?
The average base pay increase in 2023 was 4.8 percent, with a predicted increase of 4.5 percent for 2024. These increases are notably high compared to past years and reflect the ongoing economic conditions and wage growth trends.
6. How is AI perceived in the context of compensation management?
Reactions to AI are mixed: 49 percent are positive about AI, 17 percent are pessimistic, and 34 percent are unsure. While AI has potential to reduce unfulfilling work, there are concerns about extending bias. In compensation management, only 7 percent are fully on board with using AI, while 50 percent remain undecided.
7. What are the implications of recent minimum wage increases for organizations?
Minimum wage increases are impacting 27 percent of organizations’ compensation strategies. Larger organizations and certain industries, like food and beverage, are particularly affected. Pay compression remains a concern as minimum wage floors rise.
8. What were the findings on unionization from the CBPR?
Unionization activity increased in 2023, with 4 percent of organizations recently starting to bargain with unions. However, 70 percent of organizations do not bargain with unions, and 72 percent are not concerned about future unionization. There is a significant gap in sentiment between HR leadership (62 percent favorable) and executive leadership (38 percent favorable) toward unions.
9. How can listeners access the Compensation Best Practice Report and learn more about Payscale’s activities in AI?
- Download the CBPR for free from Payscale’s website.
- Find information on Payscale’s AI activities can be found here.
- Listen to Episode 93 of Comp & Coffee here!
