%201.webp)
beqom has published research suggesting many compensation leaders do not measure the business impact of above-market pay decisions. The survey found that 58% assess fewer than half of significant pay premiums or exceptions against business outcomes.
The study of 202 management, HR and compensation professionals at global companies also found that 84% are very or extremely confident that paying above market or internal benchmarks improves employee performance. Almost half (48%) said they were highly confident that paying employees more improves performance, despite limited evidence to support it.
beqom described this mismatch as a "pay proof gap" between compensation decisions and the evidence needed to explain their cost and results.
Compensation processes also appear to span multiple tools and approval layers. The research found that 63% of respondents consult at least three systems, spreadsheets or data sources for a typical compensation decision, while 72% of HR respondents said a typical compensation exception requires at least three approval stages.
That fragmentation is pressuring organisations trying to control spending while still competing for talent. The report found that 95% of respondents saw opportunities to allocate compensation budgets more effectively, yet 45% said they had ended up over budget.
Confidence in forecasting also appeared stronger than the results. While 83% said they were highly confident in their ability to forecast compensation spending, nearly half still reported overshooting planned budgets.
AI use
The findings also point to tension between growing AI tool use and weaknesses in compensation data. The research found that 79% of respondents use AI-assisted tools for at least one compensation activity.
Among those users, 52% said they frequently encounter conflicting compensation information, compared with 32% of non-users or those unsure whether they use AI. AI users were also more likely to report manual intervention in compensation decisions, at 60% compared with 37% of non-users or uncertain respondents.
The report suggests wider AI use is exposing longstanding problems with disconnected systems rather than solving them. Separate findings show that 48% of respondents frequently encounter conflicting compensation information across systems and stakeholders, even though 75% rate their data accuracy highly.
Time spent correcting data remains substantial. Half of respondents said they spend at least 11 hours a month reconciling or correcting compensation data.
Large spend
The survey underlines the financial significance of pay decisions for large employers operating across several markets. Decisions on premiums, exceptions and pay adjustments can directly affect labour costs, retention and internal equity, yet the research indicates that many employers still struggle to link those decisions to measurable outcomes.
Respondents ranged from middle managers to senior leaders, owners and executives. In addition to the main survey, 70 respondents completed a controlled hiring experiment testing how candidate quality, labour-market difficulty and the presence of a competing offer affected salary recommendations.
Brad Perry, Chief Operating Officer and Chief Financial Officer at beqom, said the findings show companies often lack a clear view of what compensation spending achieves.
"Compensation is one of the largest investments a company makes, but too often, organisations lack the visibility to understand what that spending is delivering," he said.
Perry added that this matters even more when companies approve premiums or make exceptions to secure talent.
"When companies approve pay premiums or make exceptions to secure talent, they need to know whether that investment is driving better performance, retention, or other business outcomes. Without that connection, it's difficult to make informed decisions about where to invest compensation dollars and where those resources could be put to better use."