Emerging Intelligence columnist John Sumser is the principal analyst at HRExaminer. He researches the impact of data, analytics, AI and associated ethical issues on the workplace. John works with vendors and HR departments to identify problems, define solutions and clarify the narrative. He can be emailed at [email protected]

Just about a decade ago, I left the board of directors at Salary.com after we took the company through an IPO then sold it a couple of years later. During the time I was on the board, I learned more about salary data and its management than I imagined possible. Back then, Salary.com was pioneering techniques that would come to be called artificial intelligence. They took massive quantities of data and used it to predict the value of a job.

There’s also a wonderful story to be told about the founder, Kent Plunkett, figuring out how to buy the company back five years later. But that’s another long article.

Since leaving the board, I haven’t followed the company’s evolution closely. So, I was surprised when the company showed me the most interesting technology I saw at this year’s HR Technology Conference. I have the good fortune of getting to see the latest and greatest as it heads into the market, and this product floored me.

The power of a great innovation is never in the product itself. The automotive revolution was never one person driving a car, it was the transformation of the culture that evolved from the invention. While Google makes search seamless and easy, the value stems from the way that search became a part of everyday life.

This year, Salary.com introduced a tool that delivers a specific market price for a specific job in 15,000 different occupations. It sounds so completely mundane that you are hereby forgiven for not instantly seeing its importance.

Transformation trails innovation. The two things rarely happen concurrently. No one imagined the aerospace industry when the newspapers reported that the Wright Brothers’ plane stayed aloft. The power of Salary.com’s new offering is the array of things that it makes possible.

HR’s compensation function is where economics is practiced in its most mystical form. Historically, the process to determine the price of a given job was a combination of generalized survey data, a bit of company policy, parametric estimations, and the analysis of job descriptions. There was always a big dose of art melded with the science.

With the Salary.com market pricing tool, a compensation analyst (or anyone, for that matter) can adjust the value of a job by adjusting factors that include skills, competencies, experience, education, location, company size, industry, certifications, licenses, working conditions, levels and shift differentials. The rapidly growing library of jobs contains market-pricing data for each of the subcategories suggested by those top-level groups.

The tool is a homerun for pay equity. By deeply quantifying all of the skills and variables that comprise the value of a specific job, the Market Pay Tool makes it possible to rationally compare one worker with another based on qualifications, experience, depth of responsibility and so on. It turns a difficult conversation into a straightforward reconciling of the elements of compensation.

There’s an even more powerful possibility.

HR systems are plagued by a difficult problem. Only about 20% of employees ever fill out their profiles in the HR system, and most of these are “high-pos.” When a company wants to understand how to evolve the workforce for the future, the current baseline is nowhere to be found. The problem stems from the fact that the introspection required to complete the profile is challenging, and there is no real incentive for taking the time to do the work.

Salary.com’s Market Pricing Tool makes it possible to imagine a project that simultaneously solves the pay-equity problem while thoroughly inventorying the skills and experience assets of the company’s talent. If each boss met with each employee to determine that their job was paying the proper market rate—including adjusting for the personalized skills, knowledges and capabilities that particular employee brings to the position—both goals could be achieved simultaneously.

It’s that possibility that makes this the most interesting thing I saw this year at HR Tech. The Market Pricing Tool opens the door to organizational improvements not imagined by its creators.

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