Compensation Becoming More Personalized, ISG Report Says
ISG's latest report reveals a shift towards personalized compensation in enterprises, driven by advanced software and AI tools. Key findings include:
1. By 2027, half of enterprises are expected to benchmark skills, not just jobs, in compensation pricing.
2. Digital tools are evaluating employee value based on skills, personal situations, and locations, beyond job titles.
3. Compensation planning now focuses on maintaining competitive advantage and adapting to employee expectations.
4. Real-time reassessment of working conditions and broader job market trends is crucial.
5. Investment in professional development is becoming a critical factor in compensation management.
ISG evaluated 24 software providers across three categories: Compensation Management, Compensation Planning, and Total Compensation Management. Oracle, Salary.com, and ADP emerged as leaders in all three categories.
Il rapporto più recente di ISG evidenzia un cambiamento verso una compensazione personalizzata nelle aziende, guidato da software avanzati e strumenti di intelligenza artificiale. Le scoperte principali includono:
1. Entro il 2027, si prevede che la metà delle aziende utilizzerà le competenze come parametro di riferimento non solo per le mansioni, ma anche nella determinazione dei prezzi di compensazione.
2. Gli strumenti digitali stanno valutando il valore dei dipendenti in base alle competenze, alle situazioni personali e alle località, oltre ai titoli di lavoro.
3. La pianificazione della compensazione ora si concentra sul mantenimento del vantaggio competitivo e sull'adattamento alle aspettative dei dipendenti.
4. La rivalutazione in tempo reale delle condizioni di lavoro e delle tendenze del mercato del lavoro è cruciale.
5. L'investimento nello sviluppo professionale sta diventando un fattore critico nella gestione della compensazione.
ISG ha valutato 24 fornitori di software in tre categorie: Gestione della Compensazione, Pianificazione della Compensazione e Gestione Totale della Compensazione. Oracle, Salary.com e ADP si sono distinti come leader in tutte e tre le categorie.
El último informe de ISG revela un cambio hacia una compensación personalizada en las empresas, impulsado por software avanzados y herramientas de inteligencia artificial. Los hallazgos clave incluyen:
1. Para 2027, se espera que la mitad de las empresas valore las habilidades, no solo los puestos, en la fijación de precios de compensación.
2. Las herramientas digitales están evaluando el valor de los empleados en función de sus habilidades, situaciones personales y ubicaciones, más allá de los títulos laborales.
3. La planificación de compensaciones ahora se centra en mantener la ventaja competitiva y adaptarse a las expectativas de los empleados.
4. La reevaluación en tiempo real de las condiciones laborales y las tendencias del mercado laboral es crucial.
5. La inversión en desarrollo profesional se está convirtiendo en un factor crítico en la gestión de la compensación.
ISG evaluó a 24 proveedores de software en tres categorías: Gestión de Compensaciones, Planificación de Compensaciones y Gestión Total de Compensaciones. Oracle, Salary.com y ADP emergieron como líderes en las tres categorías.
ISG의 최신 보고서는 고급 소프트웨어와 AI 도구에 의해 주도되는 기업에서 개인화된 보상으로의 전환을 밝힙니다. 주요 발견 사항은 다음과 같습니다:
1. 2027년까지, 절반의 기업이 보상 가격 책정에서 직무뿐만 아니라 기술을 벤치마킹할 것으로 예상됩니다.
2. 디지털 도구는 직무 제목을 넘어 기술, 개인적 상황, 위치에 따라 직원의 가치를 평가하고 있습니다.
3. 보상 계획은 이제 경쟁 우위를 유지하고 직원의 기대에 적응하는 데 초점을 맞추고 있습니다.
4. 근무 조건과 더 넓은 노동 시장의 트렌드를 실시간으로 재평가하는 것이 중요합니다.
5. 전문 개발에 대한 투자는 보상 관리에서 중요한 요소가 되고 있습니다.
ISG는 보상 관리, 보상 계획 및 총 보상 관리의 세 가지 범주에서 24개의 소프트웨어 공급자를 평가했습니다. Oracle, Salary.com 및 ADP는 세 가지 범주 모두에서 리더로 부각되었습니다.
Le dernier rapport d'ISG révèle un changement vers une compensation personnalisée dans les entreprises, guidé par des logiciels avancés et des outils d'IA. Les résultats clés incluent :
1. D'ici 2027, la moitié des entreprises devraient évaluer des compétences, et non seulement des emplois, dans la fixation des prix de compensation.
2. Les outils numériques évaluent la valeur des employés en fonction des compétences, des situations personnelles et des lieux, au-delà des intitulés de poste.
3. La planification de la compensation se concentre désormais sur le maintien d'un avantage concurrentiel et l'adaptation aux attentes des employés.
4. La réévaluation en temps réel des conditions de travail et des tendances du marché de l'emploi est cruciale.
5. L'investissement dans le développement professionnel devient un facteur clé dans la gestion de la compensation.
ISG a évalué 24 fournisseurs de logiciels dans trois catégories : Gestion de la compensation, Planification de la compensation et Gestion totale de la compensation. Oracle, Salary.com et ADP ont émergé comme leaders dans les trois catégories.
Der neueste Bericht von ISG zeigt eine Entwicklung hin zu personalisierten Vergütungen in Unternehmen, angetrieben durch fortschrittliche Software und KI-Tools. Zu den wichtigsten Ergebnissen gehören:
1. Bis 2027 wird erwartet, dass die Hälfte der Unternehmen Fähigkeiten und nicht nur Stellen bei der Preisgestaltung für Vergütungen benchmarken wird.
2. Digitale Werkzeuge bewerten den Wert von Mitarbeitern basierend auf Fähigkeiten, persönlichen Situationen und Standorten, jenseits von Jobtiteln.
3. Die Vergütungsplanung konzentriert sich nun darauf, einen Wettbewerbsvorteil zu wahren und sich an die Erwartungen der Mitarbeiter anzupassen.
4. Eine Echtzeit-Neubewertung der Arbeitsbedingungen und breiterer Markttrends ist entscheidend.
5. Investitionen in die berufliche Entwicklung werden zu einem kritischen Faktor im Vergütungsmanagement.
ISG bewertete 24 Softwareanbieter in drei Kategorien: Vergütungsmanagement, Vergabeplanung und Gesamtes Vergütungsmanagement. Oracle, Salary.com und ADP erwiesen sich als führend in allen drei Kategorien.
- ISG (Nasdaq: III) released a comprehensive report on compensation management trends
- The report identifies advanced software and AI as key drivers in personalizing employee compensation
- ISG evaluated 24 software providers, offering valuable insights for enterprises seeking compensation management solutions
- Oracle, Salary.com, and ADP were ranked as leaders in all three compensation software categories
- None.
Insights
This report from ISG Software Research highlights a significant shift in compensation strategies, driven by advanced software and AI. The trend towards skill-based compensation rather than role-based pay is particularly noteworthy. ISG projects that by 2027,
This shift could have profound implications for the job market and employee retention strategies. Companies adopting these advanced compensation tools may gain a competitive edge in attracting and retaining top talent. However, it's important to note that while personalized compensation can boost employee satisfaction, it may also lead to increased complexity in payroll management and potential equity issues if not implemented carefully.
For investors, this trend suggests potential growth opportunities in HR tech companies specializing in AI-driven compensation management tools. It's a space worth watching, as companies adapting to these new compensation strategies may see improved employee retention and productivity, potentially impacting their bottom line positively in the long term.
The ISG report underscores the growing importance of sophisticated compensation management tools in today's dynamic work environment. The emphasis on personalized compensation and real-time reassessment of working conditions reflects the evolving nature of work post-pandemic.
Key takeaways include the need for compensation tools to factor in remote work, gig economy trends and individual skill sets. This shift towards more nuanced, AI-driven compensation strategies could potentially disrupt traditional HR practices and salary structures.
For technology companies in the HR space, this represents both an opportunity and a challenge. Those able to deliver robust, AI-powered compensation management solutions that can handle complex, personalized calculations may see increased demand. However, they'll need to ensure their systems can maintain fairness and transparency to avoid potential legal and ethical issues associated with AI-driven decision-making in sensitive areas like compensation.
From a financial perspective, the trend towards more sophisticated compensation management tools could have several implications. Companies investing in these technologies may see initial increases in HR-related expenses, but could potentially realize long-term savings through improved employee retention and productivity.
The report's identification of market leaders like Oracle, Salary.com and ADP across multiple categories is significant. These companies may see increased revenue streams from their compensation management offerings. Investors should monitor the financial performance of these leaders, as well as emerging players in this space.
However, it's important to note that while the report suggests a strong trend, it doesn't provide specific financial projections or market size estimates. The actual financial impact will depend on the rate of adoption and the effectiveness of these new compensation strategies in driving business outcomes. Companies successfully implementing these tools may see improved financial performance through better talent management, but quantifying this impact will require further analysis.
New insights from ISG Software Research say software and AI are allowing companies to compensate employees based on skill sets and other factors, not just roles
The ISG Buyers Guide™ for Total Compensation Management, produced by ISG Software Research (formerly Ventana Research), says strategic oversight of compensation plays a crucial role in how businesses attract, retain and motivate talent within a competitive marketplace. It notes the rise of remote work and the gig economy has prompted a re-evaluation of compensation strategies to accommodate diverse work arrangements and expectations.
ISG Software Research projects that compensation market pricing processes will include the benchmarking of skills, not just jobs, in half of enterprises by 2027.
“Today’s digital tools supporting enterprise compensation aren’t just personalizing employee rewards, they’re evaluating each employee’s value according to their skill set, personal situations and geographic locations,” said Matthew Brown, director of research, Human Capital Management, ISG Software Research. “Enterprises are looking beyond just employees job titles; they’re assessing payment and benefits based on their skills and competencies, regardless of where a position resides in the corporate hierarchy.”
ISG Software Research defines compensation planning as determining and managing an enterprise’s overall remuneration strategy, including salary structures, bonuses and benefits, to ensure competitive and equitable compensation for employees. Through strategic planning, organizations can maintain their competitive advantages in the labor market, while adapting to the needs and expectations of their employees.
Staying competitive means addressing employees’ requirements for personalized, tailored compensation and benefits. An organization’s compensation management tools must be able to reassess employee working conditions in real-time, taking into account not just its own workplace culture, but the current conditions of the broader job market — including for jobs that may not appear to align with employees’ current skill sets.
Employees need to feel that they’re advancing, not just in the corporate hierarchy but in their personal lives as well. Investment in their professional development becomes a critical factor in evaluating the value of compensation management plans.
For its 2024 Compensation Software Buyers Guides, ISG evaluated software providers across three platform categories – Compensation Management, Compensation Planning, and Total Compensation Management – and produced a separate Buyers Guide for each.
A total of 24 providers were assessed. Thirteen providers were assessed across all three service categories: ADP, beqom, Cornerstone, Dayforce, HRSoft, Infor, Oracle, PeopleFluent, salary.com, SAP, UKG, Unit4 and Workday. Five additional providers were assessed exclusively in the Compensation Planning category – 15Five, Anaplan, Lattice, Pave and Payscale – while six were assessed exclusively for the Compensation Management category: Darwinbox, HiBob, isolved, Paycom, Paycor and Paylocity.
ISG Software Research designates the top three software providers as Leaders in each category. For the 2024 study, the leading providers overall are, in ranked order:
Total Compensation Management: Oracle, Salary.com and ADP
Compensation Planning: Oracle, Salary.com and ADP
Compensation Management: Oracle, Salary.com and ADP
“Managing and planning compensation is essential for organizations that want to be effective at recruiting and retaining their workforce and operating effectively across HR and finance,” said Mark Smith, partner of Software Research at ISG. “Our Buyers Guides establish the framework for software provider evaluations that go beyond providers’ ‘market execution’ or ‘vision of the future’ to ensure a comprehensive evaluation for any enterprise.”
The ISG Buyers Guides™ for Compensation Software are a distillation of more than a year of market and product research efforts. The research is not sponsored nor influenced by software providers and is conducted solely to help enterprises optimize their business and IT software investments.
Visit this webpage to learn more about the ISG Buyers Guides for Compensation Software and read executive summaries of each of the three reports. The complete reports, including provider rankings across seven product and customer experience dimensions and detailed research findings on each provider, are available by contacting ISG Software Research.
About ISG Software Research
ISG Software Research, previously Ventana Research, provides authoritative market research and coverage of the business and IT software industry. It distributes research and insights daily through its user community, and provides a portfolio of consulting, advisory, research and education services for enterprises, software and service providers, and investment firms. Its on-demand service provides structured education and advisory support through subject-matter experts. ISG Buyers Guides™ support the RFI/RFP process and help enterprises evaluate and select software providers through tailored assessment services and the ISG Software Research Value Index methodology. Visit www.ventanaresearch.com for more information and to sign up for free community membership.
About ISG
ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 900 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including AI and automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in
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Press Contacts:
Will Thoretz, ISG
+1 203 517 3119
will.thoretz@isg-one.com
Julianna Sheridan, Matter Communications for ISG
+1 978-518-4520
isg@matternow.com
Source: Information Services Group, Inc.
FAQ
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