Enterprise compensation management improves productivity, according to survey
Burlingame, CA — December 16, 2003 — Financial Services companies are meeting their top employee-related challenges and experiencing a return on investment by implementing enterprise compensation management (ECM) software, according to a survey of large U.S. Financial Services firms conducted across six financial services subcategories including Mortgage, Retail, Investment Banking, International Banking, Credit Card Services and Non-Bank Financial Services.
The study, conducted by ECM provider Kadri, noted that financial services organizations are using ECM to address such workforce issues as attracting and retaining talented employees, improving workforce performance, optimizing compensation spending and improving budgetary control
Kadri said the average annual revenue of participating firms was $10 billion with a low of $680 million and a high of $45 billion. Total employee populations ranged from 4,500 to 110,000 employees. The focal review populations for this study averaged 20,000 employees with variations based upon divisions and corporate guidelines.
According to Kadri, the financial services firms surveyed projected cost and productivity savings in workforce management areas by automating and streamlining the compensation management process through the implementation of an ECM solution.
For example, annual benefits would yield:
* Improvements in line manager productivity (time spent on managing compensation), resulting in average savings of $2 million.
* Increased budgetary control and visibility into the compensation process for an average savings of over $2 million.
* Greater retention of top performers and reduction of unwanted employee turnover that would net over $1.4 million in savings.
* Productivity improvements in the overall compensation process that would result in an average savings of over $300,000.
"The Financial Services industry has experienced a substantial amount of mergers and acquisitions in recent years, further adding to the complexity of the compensation planning process within many organizations," said Jay Weir, senior researcher for HR.com. "As a result, ECM solutions are gaining traction in the industry as companies look to simplify the compensation process and reduce costs."
As of December 4, 2003, Kadiri said it launched the ECM Forum as a resource to human resources and compensation executives in the financial services industry. The Forum offers expert help for such issues as pay-for-performance, stock option expensing, Sarbanes-Oxley and compliance, according to the provider. The site will feature interviews with peers and industry experts and news and research on compensation management.