Quincy Valencia's Analyst Perspectives

The world is witnessing a long overdue and significant shift in the realm of pay equity and transparency. On March 30, the European Parliament passed the Pay Transparency Directive, mandating pay transparency and equity within organizations in an effort to close the gender pay gap and ensure equal pay for equal work. This legislation comes with teeth, providing strict mechanisms for enforcement including shifting the burden of proof from the worker to the employer in the event of legal challenges, and stiff fines and direct remuneration for non-compliance. Although not yet passed, similar legislation is under consideration in the U.S. Congress in the form of the Salary Transparency Act and the Pay Equity for All Act of 2023. Combined, these laws and proposals are signaling that this trend is likely to become a global standard. Many organizations have already adopted progressive pay transparency and equity practices, but for those that have taken a wait-and-see approach, preparing for the inevitability of pay equity and transparency mandates could prove challenging.

In recent years, organizations have struggled to find and retain the right talent to fill critical roles. This can be attributed to a combination of factors, including an aging workforce, a lack of critical skills needed for current and future organizational needs, and increased competition for talent from other organizations seeking similar skills. Our research shows that, within the next five years, one-half of all employees will require significant reskilling and upskilling in order to keep pace with the changing job market. As a result, organizations are facing a talent shortage and are struggling to fill their open roles with qualified candidates. This poses a clear threat to the ability to execute critical business initiatives. In response, we assert that by 2025, one-half of organizations will implement a more comprehensive approach to determining organizational readiness, including sentiment analysis, skills gaps identification and adjacencies assessments to optimize employee potential.

People analytics is the application of data and statistical methods to better understand and optimize the human capital within an organization. It has become a crucial aspect of business strategy as organizations seek to make data-driven decisions about the workforce. In the past decade, the people analytics market has experienced substantial growth, as businesses look for ways to gain insight into the effectiveness and efficiency of human capital investments. Most HCM technology platforms today boast native capabilities.