Interview - How gradar is disrupting the job evaluation market
Please tell us something about yourself and your Startup.
My name is Philipp, I am the founder and CEO of QPM, a HR-tech Startup from Germany. My professional interests are compensation & benefits and evidence-based HR management. With this background my colleagues, partners and I created a state-of-the-art job evaluation system https://www.gradar.com/en/.
What do you want to achieve with gradar?
Philipp: We want to develop and offer a modern and affordable job grading tool by turning a traditional consulting business into a product business. This makes the sale of licenses our focus. Foremost, our partners, such as Sam at CompTeam support companies with the implementation of our job evaluation system.
A focused partner strategy enables us to scale our licensing business internationally.
Sam: It’s great working with a smart solution such as gradar. Philipp and his team developed a product that is on par or better than what our large competitors have to offer. gradar can be used by compensation consultants such as myself for client projects at a very low cost, enabling even smaller companies to get access to high-quality job evaluation.
Digitization is on everyone's lips and with your Startup you also contribute a certain amount to it. How has digitization affected your business model in recent times?
Philipp: Digitization enables us to be disruptive in the first place by making the traditional consulting business a product business. In addition to all the advantages of our job grading software, we have thus primarily pursued business model innovation.
Sam: Without a web-based job evaluation system such as gradar that is, at its core, not a proprietary technology, I would have to rely on Excel or Access based tools for job evaluation projects. Developing web-based software takes a lot of time and I am happy to have joined the ranks of gradar partners allowing me to support and influence the further development of the application.
How do you currently experience the market for job evaluation?
Philipp: I think there is a difference between how American and European companies use job evaluation. It is my impression that American companies often focus on the “price” of a job whereas many European companies focus on the “value” of a job and subsequently use this value to determine a wage/salary range.
We do not directly translate our grades into benchmark data but offer an automated translation of the results into job codes from several compensation surveys as well as into the levels from (European) labour agreements.
This enables us to consistently determine and show the equivalence of labour across entities, countries and industries.
Sam: Philipp is correct, many American companies focus more on the “price” or market value of a job rather than it’s internal value to the company. The difficulty with this practice is that many companies compare their jobs to the wrong levels in the benchmark surveys resulting in significant pay budget losses. gradar dramatically enhances the American market job pricing strategy by ensuring jobs are leveled correctly. Eliminating subjectivity from the job analysis process saves the company a significant amount of money and easily pays for the gradar platform tenfold.
What are concrete applications/use cases for your product in practice? Can you describe a short success story?
Philipp: Almost every one of our clients has introduced a wage and salary structure based on the results. Some even go so far as to base their collective agreements esp. in Europe on the gradar algorithm.
Often career paths and career/job architectures are also based on the results, aligning with corresponding job titles.
The analysis of remuneration structures with regard to a possible gender pay gap is also quite frequent, as the equivalence of work can be reliably determined by gradar.
In recruitment, we also see a significant acceleration in the recruiting process through a clear analysis of the requirements for the position in question and the introduction of salary bands, as this clearly defines which profile is sought and how much the organization is willing and able to pay.
Sam: Many of my clients find that jobs with the same title have a significantly different scope and responsibilities at various locations. The gradar tool helps identify these differences and places them appropriately in the pay structure. The application of this tool has repaid itself tenfold by simply putting jobs in their proper alignment.
Do you experience hostility towards technology on the part of HR managers. Have there been any recent changes here?
Philipp: Many of the currently hyped buzzwords, such as AI, Blockchain, IoT, New Work, etc. have hardly any relevance to the practical work of HR. If one is critical of these "trends", then in my view this is not hostility to technology but rather common sense.
The promise of a transformation of the HR function to a more strategic role associated with digitization should, moreover, be taken with caution, as the current findings of academics show: "Electronic HRM: four decades of research on adoption and consequence" (Bondarouk, Parry & Furtmueller, 2016)
This describes one of the core challenges for many HR departments. Often they only have access to payroll software and perhaps a few supporting tools for recruiting, benefits management, vacation planning, etc.
The reasons for this are manifold, high costs, lack of competence, ambiguities in responsibility and the resulting conflicts with IT, among others, are to be found more frequently in one form or another. But also the question about the benefits of "Talent Management" software, in general, must be allowed if in the end only a documentation of the annual performance review is stored in it.
Sam: In recent years, many of the HR software solutions are large platforms requiring significant cost and resources for implementation. Project plans, documentation and training needs to be created and communicated throughout the company. It is easy to understand the apprehension of HR managers when implementing these systems. The gradar system was designed to avoid all of this frustration. It is a stand-alone solution with an intuitive interface and the implementation is often less than a week. There is no pain in the process and HR managers see immediate results.
And finally the question - where will your Startup go in the next few years, what are your goals?
Philipp: We enjoy working with clients and partners and we receive so much positive feedback and appreciation that no team member can imagine working in another job at the moment.
We are currently building the integration of a competency model and already have ideas for a compensation module. Our pipeline of ideas is far from exhausted.
Since we love what we do we have no intention to sell our company.
Sam: We are at the forefront of a renaissance in personnel management. Companies have been stuck in old methodologies such as the ineffective annual performance review and meaningless yearly pay raises for over 50 years. The future of work will include the global mobile workforce, flexible organizational structures and a whole new way to reward people for quality work. Philipp and his team have anticipated these changes, listened to human resource practitioners in the field and created the gradar system to evolve talent practices. I am excited to be a part of this effort.
Thank you very much for the interview!
About the interviewees