There is a huge amount of data out there in the area of pay. The challenge is not only getting to grips with the better information but also understanding the less than accurate or irrelevant data.
The information age has certainly delivered on more information. Not only has technology enabled more transparency particularly within public forums, but new and different ways of collating and disseminating information continues to become available.
In the area of pay, this is the case in spades. Some examples are worth looking at and understanding – let’s have a look at five of the more important:
Greater transparency: “Tell me more.” Whether it’s the NZX Code of Corporate Governance, international accounting requirements or a government commission reviewing a sector and/or some business practices, the demands with respect to pay for higher levels of transparency and accountability have become more important in today’s environment.
The issues generating the departure of the ANZ CEO is just one example of late and I am sure there will be many more. The difference we are seeing now is a requirement to release more information and a greater likelihood of sanctions.
Crowd sourced data: “You tell me your pay and I will tell you what other similar jobs are paid.” It’s a simple premise and with relatively straightforward jobs it may give relatively straightforward answers. The doubts remain around the integrity of the data and its robustness when challenged. So, while it may have some use for individuals wanting a first indication of pay levels it is difficult to rely on.
Larger databases: “What are rocket scientists paid on the Mahia Peninsula?” For employers, the importance of data that is comprehensive and available immediately is now a question that is more easily answered than 10 years ago. There are more comprehensive databases now available online 24/7, with large volumes of data and constant updates that have been through vigorous validation.
Those rocket scientists? Probably data from Mt Wellington or Seattle would be better – and it’s a reasonable amount.
Globalisation: “Hey, let’s move to Brussels.” The pay and employment markets have been affected dramatically by globalisation. Ease of travel, relatively open borders (especially if you have the right skills), and internationally transferable skills have changed the international marketplace in the last 50 years.
While most local labour markets determine pay for the majority of their jobs within that market (or economy), increasingly the demand for those with technical, professional and managerial skills increasingly means they have greater options.
This is putting pressures on those roles in demand and affecting their employability and pay – and the employability and pay of those left behind.
Social media: “I have an opinion and I am going tell the world.” It’s an unstoppable force out there. We saw it galvanised with the nurses’ dispute last year and the teachers more recently. Opinions and debates are now the life blood of publically available media. Some of it useful and instructive, a lot of it emotional and misleading – a fairly normal debate in other words.
What is the most difficult aspect of social media is that it feeds on itself and can be easily captured by one party in the debate. Fair enough if you are that party but to get the issues analysed and resolved it can run the risk of the mob mentality taking over. We would suspect that all parties will just become more sophisticated in their use of it over time. However, don’t ever look to it for good statistics and data when it comes to pay.
It’s a better world with respect to pay – and it’s also a worse world in some ways as the volume of bad or misused data is also increasing rapidly. So remuneration and HR specialists now have a greater challenge in not only getting to grips with the better information out there but also understanding the less than accurate or irrelevant data, so they can counter it.
John McGill is the CEO at Strategic Pay.