CaptivateIQ's Inaugural State of Incentive
Compensation Report Highlights Growing Complexities, Opportunities
for Automation as Organizations Struggle to Scale Incentive
Compensation Efforts
SAN
FRANCISCO, May 16, 2024 /PRNewswire/
-- CaptivateIQ, a leading incentive compensation management
(ICM) solution, today published its inaugural State of Incentive
Compensation Management Report. The company surveyed 200 U.S.
compensation leaders at enterprise B2B companies to uncover trends
in incentive compensation management and identify strategies for
improvement.
Incentive compensation is often an organization's largest
go-to-market expense. The opportunities to drive real impact on
revenue by aligning individual incentives with business priorities
are endless, yet compensation management is surprisingly outdated,
leaving compensation teams spending their days wading through
manual to-dos.
An organization's path-to-growth constantly evolves as new
product lines, go-to-market strategies, or market expansions are
prioritized. Effective incentive compensation programs should
reflect those changing business priorities; however, their complex
nature makes it difficult for organizations to scale and evolve as
quickly as needed – and in fact, the inability to scale incentive
compensation programs was rated a top challenge by almost half
(49%) of those surveyed, largely due to the complexity of these
managing these programs.
In fact, just one-third of survey respondents said they align
their incentive programs with organizational goals and objectives,
exposing the need for compensation leaders to shift their focus
from day-to-day tasks to investing in scaling programs and
optimizing spend. The research sheds light into the many ways
organizations can become more strategic in how they manage
incentive compensation, turning it into a lever for growth,
including:
Striking the Right Mix of Tactical vs. Strategic
Despite incentive compensation professionals reporting that they
are mostly satisfied with many aspects of their programs, there is
still a lot of manual work being done as well as a desire to shift
toward more strategic work. In fact, just 25% of those surveyed
feel they can currently dedicate the right split between tactical
and strategic tasks, with 42% wanting to do more strategic
tasks.
The survey highlights a gap in the current state of ICM. While
the ultimate purpose of an incentive program is to align what is
best for the rep with what is best for the business, and motivate
behaviors and outcomes that more efficiently help the business meet
its goals, incentive compensation professionals are settling.
Respondents are admittedly dedicating too much time and energy to
administrative time-sucks and not enough on initiatives that move
the needle.
Motivating Teams With Incentives to Efficiently Drive
Growth
Aligning incentives with organizational or team objectives, such
as less customer turnover, more closed-won deals in certain
segments, or higher quality lead generation, is the first step
toward optimizing incentive compensation spend.. However, the
survey found that the majority of compensation plans are still
based on new business revenue.
Just 17% of respondents pay commissions on account renewals and
just one-quarter on upsells, which represents an opportunity to
incentivize post-sales success. Only 21% pay commissions on
overall team performance, a metric that can motivate teams to work
better together instead of acting more as lone wolves.
As incentive compensation programs continue to expand to new
functions, organizations should be mapping incentive programs to
desired business outcomes and motivating behaviors that go beyond
more traditional factors (e.g. revenue).
Looking For Ways to Improve Measurement
Measuring plan impact, reporting on performance, and surfacing
key data points for analysis is essential for strategic incentive
compensation planning and execution. However, less than 40% of
respondents are actively reporting on how programs are performing,
only 35% make changes to reflect changing market conditions, and
40% are optimizing their program based on insights.
"Go-to-market leaders are settling when it comes to incentive
compensation," said Mark Schopmeyer,
Co-Founder and Co-CEO of CaptivateIQ. "To move beyond the status
quo, they need to first get a better understanding of how much
these programs actually impact the bottom line, and then work to
continuously measure and optimize performance."
As incentive compensation strategies become more complex and
organizations shift from tactical to more strategic approaches, the
report points to AI and automation as becoming necessary for
success. While 91% of the respondents already report using some
form of AI within their day-to-day incentive compensation
management workflows, continued investment will better equip
organizations to automate manual processes, scale programs without
additional spend, and become more efficient and strategic in their
approach to ICM.
To read the full report and learn more about how forward-looking
organizations are approaching incentive compensation, including
best practices for leveraging AI and automation, visit: The 2024
State of Incentive Compensation Management Report.
Methodology
CaptivateIQ, in partnership with a professional market research
agency, surveyed 200 US compensation professionals working for B2B
companies with a sales team to identify core compensation
behaviors, key trends and assess brand engagement. These
professionals work at large corporations (1,000+ employees) with an
annual revenue of at least $50
million. All are decision-makers for choosing and managing
incentive compensation software. An online survey was carried out
between March 18 and April 5 2024 to
capture their feedback.
About CaptivateIQ
CaptivateIQ offers the most flexible way to automate
commissions, motivate sellers, and captivate with insights. Leading
companies such as Carta, Gong, and Intercom rely on CaptivateIQ to
provide world-class technology, real-time transparency, and
unprecedented visibility into their most important metrics, driving
faster close times, reducing costly payout errors, and improving
visibility into sales performance. For more information, visit
www.captivateiq.com.
For media inquiries, please contact:
press@captivateiq.com
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SOURCE CaptivateIQ