103: Payscale's Q4 Enhancements and AI-Powered Future

[00:00:00] Join us on a journey where we unravel the latest trends, tackle your burning questions and explore innovative strategies that are shaping the future of compensation, all with a coffee in hand.

[00:00:15] Hello everybody and welcome to this episode of Comp & Coffee.

[00:00:20] We've been sharing with you throughout this year how Payscale has been innovating in our solutions in response to market demands and compensation trends.

[00:00:28] And as we pivoted into Q4, we thought it was time to give you an update.

[00:00:33] We know many of you who listen to the show are valued customers, so we thought sharing in more detail as we progress through the year is really important in terms of our products and data offerings.

[00:00:43] And even if you're not a Payscale customer, I'm sure you'll be interested to hear about the innovations that we're making.

[00:00:49] So we are well into Q4. We wanted to give you an update on the latest developments and share some thoughts around both survey season and compensation.

[00:00:59] And what we've been doing there. And I've got three new guests to the podcast.

[00:01:03] Delighted to have Morgan Love, Tina Yu and Olivia Crowley with us today.

[00:01:08] And I'm going to get them to introduce yourselves. But as first timers on the podcast, welcome to all of you.

[00:01:14] And Morgan, do you want to tell the audience who you are and what your job role is here at Payscale?

[00:01:19] Yeah, thanks Ruth. Hi everyone. My name is Morgan Love.

[00:01:22] I'm a senior product marketing manager here at Payscale.

[00:01:25] I've been here for almost two and a half years now, and I oversee our data portfolio here.

[00:01:30] So my role is really keeping a pulse on the compensation data market and making sure we're building the best and most useful data products we can for our customers.

[00:01:42] Great.

[00:01:42] And Olivia, well, Tina, sorry.

[00:01:46] Yeah.

[00:01:47] Hi everyone. I'm Tina Yu.

[00:01:48] I'm also a senior product marketing manager here at Payscale and I focus on pay factors.

[00:01:53] So similar to Morgan, my role centers around understanding compensation challenges and connecting them to the value that pay factors delivers.

[00:02:01] And more recently, I've been working very closely with Olivia, who will introduce herself next on a lot of pay factors enhancements.

[00:02:11] Amazing.

[00:02:11] Hi everybody.

[00:02:12] My name is Olivia Crowley.

[00:02:13] I'm a senior product manager on the team here at Payscale.

[00:02:16] I'm actually coming up on five years here.

[00:02:18] I have spent my career at Payscale with a focus in our pay factors product.

[00:02:23] And generally speaking, myself and the other product managers here sit in between our engineering teams and our market just to bring you all the best and most valuable enhancements to them with the help of all of our internal partners.

[00:02:35] We're just making sure we're responding to the market through our products.

[00:02:39] Great.

[00:02:40] Well, thank you very much, ladies.

[00:02:41] First time question, actually, I forgot.

[00:02:43] We always ask, are you a coffee or a tea drinker?

[00:02:48] Let's go with you first, Morgan.

[00:02:50] I'm a lot of both.

[00:02:51] I like coffee in the morning and tea the rest of the day.

[00:02:54] Yeah, that's what I do.

[00:02:57] Yeah.

[00:02:57] Tina, what about you?

[00:02:59] I'm an avid coffee drinker.

[00:03:01] I can't have enough caffeine.

[00:03:03] And Olivia?

[00:03:04] Yeah.

[00:03:05] I'm with Tina on this one.

[00:03:07] I'm an avid coffee drinker.

[00:03:08] I even brought my coffee to the conversation today.

[00:03:10] Well, that's perfect.

[00:03:11] Because basically the whole podcast is centered around having conversations about compensation over coffee.

[00:03:17] And that's really kind of what the brand is all about.

[00:03:20] Okay, let's get started then.

[00:03:22] Can you tell us, as we kind of like now in Q4, as I've said, what have you been working on over the last few months?

[00:03:29] Yeah, I can take this one.

[00:03:31] So, 2024 has been a really exciting year for Payscale.

[00:03:34] You've probably noticed in these podcasts alone that we've been making a more conscious effort to associate our enhancements and our innovations to themes.

[00:03:42] So this can help us prioritize the seasonality of our clients' needs and ensure we're building all of the right things at the right time.

[00:03:48] I think I speak for the whole group here when I say all of us are feeling really energized by this alignment and it'll make for a great conversation today and moving forward.

[00:03:57] So from a product perspective, there are three key topics that we've been focusing on that we're really excited to discuss today.

[00:04:03] The first will be the concept of managing traditional salary surveys, also leveraging alternative data sources, and lastly, utilizing AI to streamline compensation.

[00:04:13] Great, thank you.

[00:04:15] So let's focus on that seasonality theme there.

[00:04:19] We are now at this point of the year nearing the end of survey season and starting to pivot into year end.

[00:04:25] So can you tell us what that looks like for the compensation professional who might be listening today?

[00:04:30] Yeah, absolutely.

[00:04:32] So the management of salary surveys is a year round commitment for our compensation professionals, but there are two notable peak seasons that we see.

[00:04:40] That would be participation season and survey season.

[00:04:43] So when we talk about survey season, we're referring to that period of time where the majority of vendors are returning those survey data results to their participants.

[00:04:50] And it's this season that the compensation professionals are required to gather all those survey data results, analyze them and apply any necessary compensation updates.

[00:04:59] And I'm sure everyone here knows this process is well known to be very tedious, time consuming and overwhelming.

[00:05:05] So we really make it a priority to keep this top of mind while we're innovating for our clients.

[00:05:11] Yeah, this process isn't fun by any means.

[00:05:14] And here at Payscale, we support organizations of both different sizes.

[00:05:17] So we hear from some of our bigger clients that they can have tens and even hundreds of different surveys.

[00:05:24] So at this time of year, there's pressure to apply those latest survey results and to do it quickly and accurately in order to support year end merit cycles.

[00:05:33] And then in the spring comes participation season, which is a whole other beast.

[00:05:37] So you can imagine if compensation teams are not leveraging technology to help with these very manual survey workflows, it can take up a lot of their time.

[00:05:47] Great. Well, thanks for clarifying that.

[00:05:49] Now, the last time we had a product or an innovation focused podcast was probably back in June.

[00:05:55] And at that time, we shared some exciting new features coming to pay factors to further support survey management.

[00:06:01] So what progress have we made on those features?

[00:06:05] Yes, I'm so glad you asked.

[00:06:07] So we actually launched our new surveys experience that was spoken about back in June.

[00:06:11] That was in September.

[00:06:13] And we've received raving reviews so far.

[00:06:15] It was designed to make that survey season lifecycle more manageable.

[00:06:19] And whether you're in that results phase or survey season, participation season or even somewhere in between,

[00:06:25] we've got a few big parts of this experience that will bring a lot of value to our users.

[00:06:29] So the first is we've got a visual timeline and some centralized survey statuses so that our users can actually track where they are in the survey season and easily navigate to relevant product areas to get their jobs done.

[00:06:42] We also have utilization metrics there.

[00:06:44] So those will help our clients to see the value of their surveys.

[00:06:47] As I'm sure we know here as well, surveys are very, very expensive.

[00:06:51] So we want to make sure that our clients are getting the most out of their investments, whether that be through saving money or just simply utilizing them more, you know, being empowered by those metrics.

[00:07:00] And lastly, it has a guided participation workflow, which is really the first we've seen in this market.

[00:07:06] And it's meant to help them navigate, you know, next year's participation season and beyond sort of decoupling that participation concept from pricing.

[00:07:14] Because sometimes, you know, you're participating and you want to have the best match to that survey.

[00:07:19] But sometimes that data does not become available.

[00:07:21] So your pricings may look different than what you're participating with.

[00:07:24] And so being able to sort of separate that and guide them through that workflow will be really valuable.

[00:07:30] There's definitely a lot of excitement about this launch, and I don't think it's just because Olivia and I are very biased because I do have usage data to back that up.

[00:07:39] So this has been live for just under two months, and we've seen 65% of eligible users already going in to check it out.

[00:07:47] And one of the highest usage areas is the utilization metrics that Olivia mentioned, which tracks because as survey results are coming back and people are planning their budgets for 2025, they're looking to see which surveys they're getting the most value from.

[00:08:02] So if customers of Payfactors are on the podcast and they want to find out more about that feature, what's the best way for them to do that?

[00:08:15] They can go into Payfactors and go into the surveys tile to check it out.

[00:08:20] Otherwise, we also have blog posts on ascale.com that cover what the feature is about if they're not currently a Payfactors advanced user.

[00:08:28] Great. Thanks, Tina.

[00:08:30] So we've been talking about managing third party salary surveys as part of this survey season.

[00:08:36] But of course, there are the data sources, including some of the ones that we curate here at Payscale available.

[00:08:42] So let's shift the focus now and talk about some of those alternative data sources.

[00:08:46] Morgan, can you fill us in on that?

[00:08:48] Yeah. So obviously, I love hearing about the work and our team does to make it really as easy as possible for our customers to harness the power of their compensation data.

[00:08:58] But I think it goes without saying that a great data experience is really only as good as the underlying data that kind of it's built on. Right.

[00:09:06] And while traditional surveys are reliable and they're very trusted, it's really becoming more important for organizations to utilize alternative sources of data as well.

[00:09:14] And we're seeing this become a trend across across the market. Right.

[00:09:17] CBPR showed us this year that while salary survey data from traditional publishers is the most popular and trusted data source to this day, dynamic data sources have really gained popularity more recently with about 58 percent of orgs saying they're either currently using dynamic data or that they plan to invest in dynamic data.

[00:09:35] And for good reason. Right. We know dynamic data sources are often much more timely.

[00:09:40] They can be updated more often, sometimes monthly, sometimes daily.

[00:09:43] They're often much more transparent and due to their dynamic nature and they're often way more robust.

[00:09:48] There's just more data.

[00:09:51] So can you tell us a bit more about Payscale's approach to dynamic data?

[00:09:55] Yeah. Dynamic data is really our bread and butter here at Payscale.

[00:09:58] We've been doing this for a while.

[00:10:00] We're really dedicated to providing the most timely and most transparent data possible for the market.

[00:10:05] Our peer data set, for example, updates daily so our customers know that they are using the freshest data possible to get a good view of what folks are actually being paid today, not what they were paid months or even a year ago.

[00:10:18] Timeliness is important, but it's also really crucial to have confidence in the data that you're using to be able to clearly communicate pay. Right.

[00:10:25] We know, especially today, as pay transparency is taking off across the country and across the world, even employees want to know how their pay decisions are made and they're turning to their HR and their comp pros for those for those answers. Right.

[00:10:38] And those folks need to be able to have those answers.

[00:10:40] So peer is able to deliver on this by providing unmatched transparency. Our customers can filter down to a granular level. They can see exactly where their data is coming from.

[00:10:50] They can even choose organizations by name to create unique data cuts that meet their specific needs and really give them that insight to understand what organization like themselves are paying.

[00:11:00] And since we're talking about peer, I would be remiss to not shout out our data science team, who is hyper focused on improving our data sets, growing our data sets, making sure we're providing the best possible data to our customers.

[00:11:12] And we've actually added 1.7 million incumbents to peer this year and over 200 new jobs, including trending jobs and jobs that were highly requested by customers like AI managers and consultants.

[00:11:23] We all know AI is like the hot topic right now. That's been a big request from our customers to be able to provide data for those. So we're really excited to roll with that.

[00:11:32] Well, thanks for bringing up AI, Morgan, because it's something we've been talking a lot about on the podcast over this year.

[00:11:39] So while I've got all of you here, how do you think AI will impact the work of comp professionals and what are we doing here at PayScale in terms of incorporating it into our product enhancements?

[00:11:52] Yeah, we've definitely heard and talked a lot about AI.

[00:11:55] And while there was initial uncertainty, I think compensation professionals are now coming around to seeing its real value beyond just the hype.

[00:12:03] And we've even had clients tell us, hey, can you have AI do all the number crunching so we can use our time to focus on higher impact work, like making decisions and communicating the strategy?

[00:12:15] And I mean, that's the ultimate goal of all technology, right? To take over the manual tasks and present insights so humans can make better decisions and connect with each other.

[00:12:25] And Morgan brought up the data science team. We're really fortunate to have such a strong team, led by Sarah Hillmeyer, who I know has been a guest on this podcast.

[00:12:34] And recently on the technology front, we've leveraged AI to assist with things like job descriptions and suggest matches across data sources like peer and salary surveys.

[00:12:47] Yes, we love the data science team here. They're here, there and everywhere, right?

[00:12:51] The product team specifically has such a great relationship with them, too.

[00:12:55] And we've made so much progress together and we've seen some incredible impact to our clients.

[00:13:00] And Morgan, I love what you said earlier, too, that a great experience is only as good as the underlying data that it's built on.

[00:13:06] And for me, when I think about AI, it almost sits in between it in my own head.

[00:13:11] Like it's really in between that data and experience as sort of a helping hand.

[00:13:15] And in some ways it's the data, right? But in other ways, you know, it's also that experience, too.

[00:13:20] And I feel like it's a really nice middle ground.

[00:13:23] I love that, Olivia. I think a really good example of a feature we rolled out recently that sits nicely between the two is our peer automatch feature that rolled out this spring.

[00:13:31] And essentially what it was is it automates the participation process for our peer data set.

[00:13:37] As we talked about earlier, participation is quite the beast, arguably one of the most tedious processes.

[00:13:43] So what automatch does is it really lets our users get right to that strategic decision making part of pricing jobs without the burden of all that manual work.

[00:13:52] Like Tina said, kind of taking that burden away so that they can think strategically instead.

[00:13:57] Yeah, 100%. I mean, to your point, those comp professionals have enough participation work on their plate with third party surveys.

[00:14:03] So it's really exciting that we're able to take the majority of that off of their plate to really get that value of our peer data set because it's really powerful.

[00:14:11] And as for traditional third party survey data, we've been really hard at work to bring AI powered approach to both or to pricing in both pay factors and market pay.

[00:14:20] So this feature looks a little bit different in each of our products, but the core value of it is really consistent.

[00:14:26] So basically we're leveraging advanced AI to analyze and compare jobs from our clients survey libraries and will deliver the most relevant job matches to apply to their pricings.

[00:14:37] This will dramatically reduce the time and effort required to generate or update pricings depending on what part of the process they're in.

[00:14:43] And generally, instead of manually sifting through those thousands of survey jobs, our clients can simply just review and accept those AI generated suggestions when they see fit.

[00:14:53] So we've launched these suggestions to all of our pay factors advanced users back in October, which live in our pricing updates workflow, which is basically where our clients are applying their new survey data to their company job pricings in that survey season we've been talking about.

[00:15:08] And as for market pay, the suggestions actually live in their core pricing workflow.

[00:15:12] They're currently in beta testing and we should expect them to go live for our market pay users by the end of this year.

[00:15:18] So some really exciting developments with AI there.

[00:15:21] And we're seeing really good adoption of our AI powered features too.

[00:15:25] So for pay factors, the match suggestions for surveys were accepted and used in 90% of pricing updates, which really means that these are high quality suggestions that users do trust.

[00:15:38] And we're also really excited to see this launch in market pay.

[00:15:41] Like Olivia said, we're currently testing it with 10 different clients right now in beta and we really want to make sure we get it right.

[00:15:48] Great.

[00:15:49] Now there are some concerns about using AI as well.

[00:15:54] There's some concerns about ethics, but there's also some concern about whether AI will basically automate all the work we do and take over our jobs in compensation.

[00:16:03] So what's your view on that, ladies?

[00:16:06] I think there will always be a human element in compensation.

[00:16:10] So AI won't replace HR and comp roles, but it will handle the tedious tasks, enabling teams to focus again on the more strategic areas.

[00:16:20] So for example, they can have time to be more proactive and identify potential issues before they escalate.

[00:16:28] And actually, pay factors recently launched new analytic dashboards to support exactly that.

[00:16:34] So these dashboards take all the centralized information that's already in pay factors, which includes the market data, but it also incorporates internal HR data such as structures, job families, or employee demographics.

[00:16:48] And it creates these powerful visual reports, which means as someone in HR or compensation, you can easily monitor vital signs for your organization and you don't have to be a data analyst to do so.

[00:17:01] So as long as all the data is in pay factors, the dashboards auto-populate to show potential issues like compression or flight risks or high-cost replacement roles.

[00:17:12] And you can also see your annual budget, compare internal salary ranges to the market, and filter reports to drill down into specifics.

[00:17:20] And plus, these reports are easy to download and share with leadership.

[00:17:24] So I've been talking to clients who have been spending hours manually building some of these reports, and now they have that time back, and they can spend that time to establish stronger rapport with leadership, or maybe coach hiring managers, or influence key business decisions.

[00:17:41] And I think the best part is that they'll have these analytics at their fingertips for any of those conversations.

[00:17:48] Great. Well, that all sounds amazing.

[00:17:52] Well, thanks for sharing those updates on Payscale Innovation for this quarter, and for all three of you for joining the podcast for the first time today.

[00:18:02] Of course, while I've got you here, let me ask you, what are you most excited about for the coming year in terms of what we're doing here at Payscale?

[00:18:10] I'll start with that one.

[00:18:13] Our data team is cooking up a lot of really exciting things for the new year.

[00:18:17] I think I'm most excited about, this year we heard loud and clear from our customers that industry-specific data was really crucial to their compensation strategies.

[00:18:26] And so we've been looking into that, and with that in mind, we're kind of looking into what it might look like to expand on our current peer industry network.

[00:18:35] So if you're not familiar with those networks today, we offer four industry-specific peer networks.

[00:18:40] And they're really a great opportunity for our customers to get kind of an even more granular look into that transparent peer data.

[00:18:47] They get specific job lists and different filters.

[00:18:49] But it also allows us to create a community for those customers that they get to connect regularly and learn from.

[00:18:54] So really excited about the possibility of expanding those.

[00:18:58] Yeah, those will be great.

[00:19:00] I personally am, and this will come as no surprise as someone on our product team, but really I'm just so excited about the continuation of more AI-based innovation within our product lines.

[00:19:10] And really, I think Tina drove the point home with raising up comp professionals to really be more focused on those strategic decisions.

[00:19:16] I see comp, and I know many do as well, it really is an art, and you can't replace an art with technology.

[00:19:24] And so really, AI sits as something that can just raise those comp professionals up and allow them to do what they do best and not have to worry about those tedious tasks.

[00:19:33] So I'd love to see a world in which AI is doing all of that compensation legwork from, you know, data updates and even providing insights on emerging trends and market shifts,

[00:19:42] and really make that space for those comp professionals to focus more heavily on true strategy, alignment with organizational goals,

[00:19:50] and being able to be, you know, more proactive rather than reactive because of the help with that, you know, AI technology.

[00:19:56] So I'm excited for that.

[00:19:58] Yeah, and I'll build on what Morgan and Olivia said.

[00:20:02] I think I'm most excited about the growing focus on making compensation more visible.

[00:20:07] So as we're streamlining more tedious workflows with innovation, comp professionals will have time to really elevate the function.

[00:20:14] And that means better communicating its impact and demonstrating to leadership, to employees, and to the market how compensation drives business success.

[00:20:24] So lots to look forward to.

[00:20:26] Well, Tina, Morgan, and Olivia, thank you so much for joining me today.

[00:20:29] It's really great to hear your insights and hear all that you're working on.

[00:20:33] I'm sure the audience have enjoyed that.

[00:20:35] We'll be keeping you up to date through Coffee and Comp on Payscale Innovations through the podcast in 2025.

[00:20:42] But if there are other things that you'd like to hear about, or you'd like to, there are topics that you'd like us to talk about here on Coffee and Comp,

[00:20:50] then email us at coffee at payscale.com.

[00:20:54] Otherwise, thank you very much for listening into this episode.

[00:20:56] And thanks again, Morgan, Olivia, and Tina for joining me today.

[00:21:01] Thanks for having us.

[00:21:02] Thanks, Ruth.

[00:21:03] Thank you.