Should Big Data Determine Salaries?

Some companies turn to analytical tools to determine compensation for employees

15 September 2014

Companies are always on the lookout for top tech talent, and one of the best ways to recruit and retain such individuals is by offering competitive salaries. To align compensation with the job description, geographic area, and a candidate’s expertise, recruiters are turning to big-data platforms, which are setting the salaries for workers with in-demand skills based on a greater variety of timely information than ever before.

For example, the human resources department at Bandwidth, a communications technology firm in Raleigh, N.C., relies on a data analytics tool from PayScale, a compensation information company. The tool calculates salaries based on criteria such as skills, number of years in the field, and certifications and degrees. Bandwidth will then reward employees with a salary increase or bonus for acquiring the latest skills. Previously, the company relied on general salary information from the U.S. Bureau of Labor Statistics, which becomes outdated relatively quickly and isn’t as specific.

The change made Bandwidth more attractive to the talent it wants to hire, according to Rebecca Bottorff, its chief people officer, who adds the tool has also helped the company retain its best workers.

Do you feel big data can determine your worth, and is it the best way to set salaries for technical professionals?

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