← HR Metrics·Compensation & Benefits
Compensation % of Revenue
Annual compensation spend as a share of (implied) revenue.
How it’s computed
annual_comp_spend / implied_revenue * 100
What the evidence shows
Evidence (effect sizes, priors, validity) is syncing from Principia.
Run it on your data
This metric is computed in the People Analytics Toolbox on your own numbers. See pricing — posted, no quotes.
sources: toolbox:metrics-catalog
What the literature says
The measurement literature behind this signal — sourced, so you can defend it.
“It reflects a “cost to hire and retain” logic for setting target pay levels.[C5]Cost of salesFor sales compensation purposes, a relative measure of internal costs. It reflects an “ability to pay” logic for setting target pay levels. The cost of sales, expressed as a percent, is…”
— Worldatwork Handbook Compensationmatch 57%
“Those accepting this position maintain that women performing jobs of comparable worth to those performed by men should be paid the same as men, excepting allowable differences (for example, seniority plans, merit plans, productionbased pay plans or different locations).[C1, C2,…”
— Worldatwork Handbook Compensationmatch 56%
“How do we distribute compensation across the organization?Compensation spend distribution analysis takes the total compensation spent on a defined set of employees (i.e., a group) and calculates the percent of the total spend that is allocated to each group. Groups can include…”
— The Compensation Handbook (6th ed.)match 54%
Resources: Worldatwork Handbook Compensation · The Compensation Handbook (6th ed.)