New Zenefits tech tool compares salaries
Zenefits launched a new tool to help its clients close the gender pay gap, and boost employee retention efforts via greater pay transparency.
The platform, called Compensation Management, discloses the salaries provided by all Zenefits users. Individual employee salaries are anonymous, but employers can search salaries based on industry, department, location and even demographics — like gender.
“To create a strong, competitive and fairly paid workforce, companies of all sizes need data and actionable insight to guide their decisions. By leveling the playing field around pay, we’re one step closer to eliminating the gender pay discrepancy,” says Zenefits CEO Jay Fulcher.
The average cost of replacing an employee is around 33% of their salary, according to a survey by Work Institute. Salary dissatisfaction is one of the top reasons employees leave their jobs, the survey says. Zenefits representatives say it’s in an employer’s best interest to ensure they’re paying their workforce fairly.
"Some people might see it as getting a good deal on someone, but if the person is not being paid appropriately for the work that they do, you're creating areas of inequality within the company and a retention risk — in the sense that another employer might value that person appropriately and steal them away," says Daniel Speros, director of HR product and services at Zenefits.
While free salary comparison tools exist — think LinkedIn and Monster.com — most of their data comes from positions working at large companies, Fulcher said. Zenefits provides benefit management tools for small and midsized companies with under 500 employees, so they created the compensation tool to diversify their offerings for this business demographic.
“Small and midsize businesses are the backbone of our economy, yet when it comes to access to affordable solutions to help power these businesses forward, they are continually underserved,” Fulcher says.
The compensation management tool also helps companies identify specific instances of pay inequity within their corporate structure. In addition to comparing the salaries of various companies, employers can use the tool to compare the earnings of their own employees to ensure the company isn’t facilitating the gender pay gap, and other forms of employment discrimination.
Addressing pay inequity can help companies avoid pay discrepancy lawsuits, and create a work environment where employees feel valued and appreciated, Speros said.