Dive Brief:
- An article at Huffington Post says annual raises have stagnated over the past few years, and blames that trrend on 'big data' as it is being used by employers.
- Author Nathan Newman, director of Data Justice, a data abuse watchdog group, writes that the guaranteed annual raise is increasingly a thing of the past, and a main reason wages have stagnated overall in recent decades.
- In the last four years, even as companies have recovered from the financial crisis, annual raises have averaged only about 2.8 percent, Newman writes. He adds that employers are increasingly using "big data" analysis to dole those bonuses out selectively only to the employees most likely to leave the firm, while slashing additional compensation to the rest of their workforce.
Dive Insight:
That is a strong accusation, but Newman makes his case saying that by using data analytics, employers can determine who is more likely to leave the company and use annnual raises to keep them in the fold.
Newman writes that companies now scour employee's personal data, social media and every other source of information on individuals to create comprehensive profiles of each worker. "[Data] has helped us determine, with ever-greater accuracy, an employee's probability of quitting," said Will Wold, Credit Suisse' Global Head of Talent Acquisition & Development, in an interview. Or as Google's President of People Operations told the Harvard Business Review, big data lets them "get inside people's heads even before they know they might leave."
He also cites McKinsey and Company's report, Retaining Employees in a Times of Change, where the firm advocates that companies not waste pay increases and bonuses on employees "who would have stayed put anyway."
Newman concludes by writing that datafication has "allowed companies to slash compensation and made the automatic annual salary increase a distant memory of a past era while deepening the wage stagnation so many families have experienced."
