HR, want to get out of the comp game? Think like Black Mirror.

Perhaps I’ve been watching too many episodes of Black Mirror.  Black Mirror is “centered around dark and satirical themes that examine modern society, particularly with regard to the unanticipated consequences of new technologies” (Wikipedia). In that same vein, I read this article from qz.com and was intrigued. The article discusses the power of “dynamic pricing”. Dynamic pricing is what travel sites like Expedia use. When you go on Expedia to buy a plane ticket to Minneapolis the fares offered to different customers for the same service vary greatly. The article states, “Your seatmate in row 34 might have paid 20% more (or less)… Why? Well, she might have bought her ticket at a different time than you did, purchased it from a different website, or requested greater flexibility.

So, what if companies used the concept of dynamic pricing to help with compensation decisions. Stick with me on this.

Negotiating salaries with potential hires isn’t the worst thing in the world, but it sure isn’t the best. And HR’s need to “negotiate” with the hiring manager (CFO or CEO) on what a marketable, fair salary is can get hairy. Different opinions on pay philosophy, the sliding scale on how “desperate” one is for a hire (or to be hired), unrealistic expectations of what you can “train up”, and some hiring managers’ lack of understanding the importance of maintaining profitability by controlling salaries (aka – let’s just overpay everyone), all make the compensation dance trying.

So, what if we used dynamic pricing for determining job salaries? After you’ve gone through your interview/selection process and you are ready to make a job offer, compensation could be determined more (?) objectively by assessing a variety of data points that some incredible Applicant Tracking System, HRIS, or CRM system could monitor. The system would rate factors on both sides of the negotiation: company and candidate.

Company Data Points:

  • Is the job to be filled considered a “single point of failure”? Otherwise, if the vacancy was not filled, could your company collapse (or product, or production line, etc.)
  • Days the job has been opened
  • How many vacancies does this job have
  • What is the typical churn of this job
  • Is this job considered a “feeder” role to other important jobs in the organization
  • Does this job have specialized skills that one must be proficient in
  • How well is the company performing financially

Candidate Data Points:

Well, frankly, here is the Black Mirror, creepy part.

If this could ever be standardized, perhaps we determine salaries the way companies use dynamic pricing to determine cost of services. The qz.com article states that products compete for “three precious commodities: attention, time and discretionary income.” How do they do this? They assess a person’s “social footprint”.

What do I mean by social footprint? Well pretty much everything that is collected about a person, legally, online. You know when you booked a hotel room at the Biltmore, or bought that book on Amazon, or liked your local SHRM chapter on Facebook? That info can be collected.

So what would a company assess about a candidate to determine “dynamic” compensation:

  • What attention is the candidate paying to your company, your competitors, your employees, and interacting with your content marketing.
  • What time is the candidate spending within your industry, learning new job relevant skills, connecting with industry insiders, purchasing job specific items.
  • What is their discretionary income? What are their spending habits? This may not be as relevant as the other two points; however, if we are talking about automating the compensation equation, knowing how much or how little someone’s possible discretionary income is could be a factor.

I know, we haven’t gotten into discrimination issues – and won’t in this post. There are so many holes that can be poked in this concept; it’s not even funny. And, I admit, I’m creeped out by this concept that, yes, I am writing about.

But although super creepy, and in some ways unimaginable, it was unimaginable 15 years ago that when I read a random article about “correct bra sizing” on Facebook, bra ads would pop up everywhere. So much so, that in the last month I’ve bought 3 bras online. The unimaginable is now a reality. So, is it really unimaginable to think that our compensation decisions could be made, at least in part, using information a candidate has legally shared with the world? Not so much.

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This post originally appeared on Fistful of Talent
Author: Dawn Burke