Talent recruitment without data is drought with challenges. Hiring managers may find themselves at a disadvantage when determining how much they need to pay their employees. Offer them too little, and they’re unlikely to work for you. Pay them too much, and you’re not utilizing your resources effectively.

Compensation management and salary benchmarking are, therefore, critical parts of the hiring and employee retention process.

Paying close attention to your payroll analytics helps to solve any issues that might arise from these processes. It’s also possible to automate many of the decisions that managers routinely make. By having the right tech stack in place – including solutions for payroll management, data collection, and analytics – and running reports to surface the information you need when you need it, businesses run smoothly and make the right compensation-related decisions.

Here are three benefits that executives can see by including payroll considerations in their data-driven management scope.


You can’t investigate every hiring decision manually and determine the exact figure to satisfy a new hire. Analytics packages allow you to personalize payroll decisions to your employees. As Sean Manning, founder of Payroll Vault, says, “Few aspects of business are more personal than when you pay your employees the money they have earned and by which they live, so it makes sense to have personal care on the payroll management side as well.”

Offering your employees optimal salaries needs to balance against your company’s budget. With business environments constantly changing, companies need to keep an eye on their costs. Salaries are among the most significant expenses that companies incur, accounting for anywhere from 40 to 80 percent of revenues.

Payroll analytics solutions allow you to not only benchmark salaries. They also help you model the impact that the new hire will have on your organization’s costs on multiple levels. “Because of the sensitive nature of payroll, even small mistakes can cost money in employee turnover and deteriorate trust among the workers who remain,” notes Alex Margolin of Papaya Global.

“At the same time, having access to accurate and precise BI data can help you spot areas of your business that need improvements, such as excessive overtime pay in one department when an additional worker would ultimately cost less, or a budget shortfalls in another department.”

If you’re dealing with a global workforce, it’s likewise essential to remember that you pay your employees a lot more than just their salaries, depending on where they’re based. The structure of local benefits packages plays a vital role as well. Locations that require high insurance benefit contributions might be better served by hiring contingent workers instead of full-time employees.

Alternatively, you can compare the cost of training new employees against the cost of losing confidential business data when an employee moves on. Your data might indicate that investing in a full-time team might make more sense, despite more generous benefit contributions.

Payroll data can also help you retain key employees by understanding what their values are. While satisfactory compensation leads to better work performance, the amount of money you pay an employee isn’t the only factor motivating them. For example, younger workforces might value flexible work hours more than excellent health insurance packages. An older workforce might appreciate remote work possibilities more than an open office environment.

Analytics helps you tailor compensation to your employees in better ways and build loyalty amongst your workforce.


As businesses grow and retain team members overseas, compliance knowledge and internal audits become more critical, highlighting the value of a centralized database for all talent contracts and salaries. For example, in some countries, it’s illegal to email employees after work hours.

Companies based in the United States tend to have it easier than their global counterparts when it comes to labor regulations. They can terminate employment contracts for any reason other than discriminatory ones. In some countries, worker councils, labor laws, and work contracts make this situation more complicated.

For example, in The Netherlands, the period of notice for an employee is one calendar month. Still, it isn’t as simple as that – if you give notice to an employee that they’ve been terminated on any day other than the first of the month, the notice is legally considered to have been issued on the first of the following month.

Local labor laws can change quickly, as well. Because of all the global trade taking place in Saudi Arabia, authorities have instituted a complex system of “Nitaqat” laws, requiring foreign companies to employ Saudi nationals in specified percentages of their workforces. What categories of companies are bound to which Nitaqat quotas are somewhat dynamic, and the laws continue to evolve, making it harder for growing companies to plan headcounts and related expenses.

These days, payroll analytics need to go beyond merely providing great visualization tools and the ability to create ad-hoc reports. You need to use your payroll data as a single source of truth that you can reconcile with updates on regulatory considerations.


What was your global workforce spending last month, and why was it higher? What are your employer cost differences over time and by category in Spain and Italy? What does your net pay waterfall look like? Which contracts are expiring at the end of the month, and how will they impact your cash flow? How can you offset the business loss with new hires?

These are some of the critical questions that hiring managers deal with daily. Astonishingly, many companies choose to answer these questions using complicated spreadsheets backed by gut instinct on the manager’s part. With employment practices changing, trusting your instincts isn’t enough.

For example, the gig economy is growing every year, and many companies find themselves increasingly relying on freelancers. Unlike salaried employees, freelancers generally get paid on an ad-hoc basis. Even if they’re paid in advance, your company needs to project work demands in advance to ensure you’re deriving maximum benefit. Data analytics can help stakeholders identify seasonal cycles and other trends that they might overlook independently.

“Slow payments and poor communication about payment processes are one of the biggest headaches for gig-economy workers,” asserts Robert McGuire, publisher of Nation1099. “In many companies, line managers handle these relationships much the way they handle purchasing of software and supplies.”

Inaccurate cash projection is often behind these snafus, and culturally, management needs to approach gig worker commissions differently from other vendors. With the help of the right analytics workflows, you cannot only evaluate upcoming cash outflows but also spot trends that traditionally drain cash and plan to mitigate them ahead of time.

Global organizations need to take a wide variety of factors into account before hiring new employees. Aside from cultural fit, evaluating the risks that the business faces on a local basis is critical. Analytics can help you view payroll costs at multiple levels, from a business unit to a branch and even on a regional level. You can plan your workforce better and make better cash management decisions.


Payroll analytics can help yield insight into not only your cash flow but also what drives your employees. By staying compliant and anticipating trends through the power of data analysis, you’ll create a culture of satisfaction amongst your employees. This boosts your bottom line and allows you to separate your company from the competition.

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