Compensation Management Software Buyer's Guide
By Mariah Hansen, Market Research Associate
As much as your employees may love their job, there’s still one big motivating factor that keeps them coming into work every day: a paycheck. Providing compensation for your employees is a dull job, but it’s a necessary part of running a business. Luckily, compensation software can do most of the work for you — it will even let you take the credit for all of its hard work.
Compensation management involves all of the policies, procedures and systems that help determine how to properly compensate your employees for the work they do. From managing salaries to updating compensation policy, a compensation management tool can be a good solution for streamlining and simplifying all of the involved facets.
- Compensation management software can increase productivity and efficiency.
- The best plan will help you to hire and retain top candidates.
- No matter which product you choose, your compensation management tool will need to accomplish a variety of tasks in order to help you achieve your goals.
- Considering which features are most important to you will be vital in comparing systems when it comes time to purchase a new solution — and our comparison guide can make that process hassle-free.
- Implementation Goals
- Core Features
- Additional Features & Functionality
- Compare Systems
- Questions to Ask Yourself
- Questions to Ask Vendors
- Related Content
The top compensation management software will not only help streamline the processes behind compensating your employees but will also help you meet your business goals. Employees expect to be fairly compensated for the work they do and compensation management tools can help with that. But that’s just the bare minimum of what the right system can do for you and your business.
Recruiting and retaining highly qualified candidates is the core of a successful business — and compensation management is a big part of that. Candidates will be lured by a sparkling salary, but that’s not what seals the deal. Compensation is the total package. It includes salary, benefits and even extra perks outside of what is directly paid to employees, like the ability to work remotely or flexible hours. Managing all of these facets is tricky, and that’s where a compensation management tool can do its share of the heavy lifting.
Managing all of those factors properly will also provide motivation to your employees. Employees who know they are being fairly compensated, both by their salary and extra perks, will be committed and motivated to do better work.
Compensation management can also help you drive productivity by implementing performance-based incentives. Compensation management solutions can help you effortlessly manage these kinds of incentives, helping you to surpass your business goals.
If you’re implementing a new compensation software, then you’ll want to make sure it’s doing the job you’re paying for. While your business will have varying needs and goals you want to accomplish, there are a few objectives you’ll want to consider when determining what a compensation management tool can do for you and your business.
Hire & Retain High-Quality Employees
While the work may be exciting, not many employees will stay at a job that doesn’t pay them fairly for the work they’re doing. Compensation is the driving factor that brings your employees into the office five days a week, and compensating them fairly is vital if you want to keep good employees.
Even after you’ve hired your team, you don’t want to lose them. While it’s no longer common for an individual to stay at the same job their entire life, the last thing you want is to lose your employees to the competition because of compensation. You’ll want a product that can help provide oversight in managing all of these factors to help you build and hold onto your A-Team.
Boost Overall Efficiency & Productivity
While you want to compensate your employees fairly, you also have budget factors to consider. You’ll want a system that can help you clear that specific hurdle. Ensuring that your team is within budget will allow you to gauge your ability to implement performance-based incentives — like bonuses.
Bonuses and incentives can be an additional way to reward good work, and encourage it to continue as a trend. A system that can assist with these types of compensation needs will help to increase productivity and efficiency. When individuals do well, the business as a whole can succeed, and compensation management solutions can be a good tool to drive that success.
Streamline Compensation Practices
No one purchases a platform because they want to make their lives more difficult. Obviously, you’re adding a new system because you’re looking to simplify your existing compensation practices. Whichever product you choose should simplify and streamline your overall process and make everything easier.
You’ll want to assess your specific compensation practices to understand which features and tools will be the most helpful to your organization. You’ll also want to be sure the system is easy to use and is able to automate some tasks to decrease your workload. A platform that streamlines your compensation processes will decrease the burden of work placed on your HR team, help to foster greater productivity and improve efficiency across the department.
Even the most basic solutions will offer core features to help you streamline your compensation practices. However, while basic systems will offer the same general capabilities, they may not offer the same functionality as other systems. You’ll need to be aware of what your specific needs are and which features can address those needs. Once you’re armed with that knowledge, you’ll be able to fight the battle of comparing various products.
Compensation is a big factor to consider when it comes to budgeting. In fact, it could make up as much as 52 percent of your budget. Because compensation is so vital to your organization's ability to function, you’ll want to assess the budget planning functionality of each product.
You’ll need to be able to incorporate compensation data when the time comes to plan your budget. A tool should make this easier. You need to ensure that your compensation plan is within your budget, and a budget planning feature can help with this by helping you to monitor whether or not you’re staying within your budgetary guidelines.
Compensation management encompasses a variety of factors. Not only does it include salary information, but also benefits like medical insurance and work from home days. All of this will vary across departments, and as such, you’ll want a system that can sort and store data based on which department it is relevant to.
While one department may have a large budget, another department may have a small budget. These different departments may have different budgetary guidelines when it comes to compensation, and as such, segmenting the data will be useful.
Your new system can help eliminate some of the heavy lifting. In fact, the best platforms will do most of the driving for you! Automated workflows will streamline the flow of information by passing data along directly to the right person.
Some systems will also provide notifications, reminding you of tasks which need to be completed so that you don’t fall behind. Automated workflow functions can help you complete tasks faster and boost efficiency.
If you already use a performance management system, then this feature will be vital. Linking your compensation management tools to your performance management solution will allow you to implement the proper pay-for-performance platform effortlessly.
This functionality will allow you to track goals and whether they’re being met, and then it will distribute bonuses and incentives accordingly. Streamlining this process by linking these two systems will mean that both are working together efficiently and saving you time.
Additional Features & FunctionalityWhile you’ll want a product that completes core tasks efficiently, there are other features to consider when it comes time to evaluate compensation management tools.
All of the data collected and stored should be easy to access. Being forced to hunt for information specific to a department or individual employee is inefficient. What good is the data if you can’t find it?
A system that provides easy to access data will help make it clear to the manager where the data is stored and help determine which pay programs individual employees are eligible for.
|Reporting & Business Intelligence||
All of the data will help to provide you insights into your business. Most systems can easily generate reports and provide you a big picture idea of how that data applies to your overall business.
Some systems can provide you with real-time compensation data and peer-to-peer analysis. This kind of data can help you ensure that you offer a competitive salary so that you can find and retain the best talent.
You’ll want to look into what types of data each product is able to track and store, as well as how it generates reports. Be sure that whatever you choose generates reports that will be useful to your overall business plan.
There are many external factors that go along with compensation. One of the biggest factors to consider is state and federal legislative policies that affect how you compensate your employees. Your system should be able to track all of these regulations and notify you when you fall out of compliance.
Your organization may also have corporate policies you need to comply with. Luckily, most of the best compensation software can help you track those as well. Any organization that wants to stay ahead of the game when it comes to regulations and policies that affect compensation should look for a platform that can act as a watchdog over your practices to ensure they’re up to snuff.
Compare Software Solutions
It’s important to be aware of what compensation management tools can do as well as what their limitations are. While some of them will be key features you’ll want to use when you implement a new system, others will be a nice bonus even though they’re features you could live without. Determining which features are must-haves will help you determine which option will meet your needs.
Every organization will have a unique list of must-haves. You can determine which features should go on your list by assessing the pain points of your practices and then determining which specific tasks can benefit from software — alleviating some of those pain points.
We know that there’s a lot of products to sift through and many functionalities to take into consideration. That’s why our expert team of analysts developed a comparison guide to help you — should you still want more guidance.
Questions to Ask Yourself
What do I want to accomplish by introducing new software?
Have clear goals that you want to accomplish by implementing new software. While we discussed a few goals earlier, you’ll want to be sure that you and the rest of your team agree on what the core goals are specific to your business. Outlining clear expectations of what you want to accomplish and ensuring that everyone is on the same page with those objectives will help everyone make sure that they’re on track.
When do I need to implement the new software?
Fully implementing new software can be a challenge as there are many factors involved that can slow down the process. In addition to transferring your data to the new system, you’ll also need to account for an adjustment period while HR managers learn the ins and outs of the system. Give yourself a timeline for when you need the software to be fully up and running so that you can be sure things are moving along as planned or address any hiccups in your plan as they occur.
How will the new software affect my employees?
Any change can come as a shock to your employees, no matter how small that change may seem. Not only will you have to account for the time it takes for employees to learn how to use the new software, but you’ll also want to be prepared for how to react if your employees are resistant to the change. If your employees have concerns about implementing the new software and how it will affect them, you’ll want to be prepared with answers to address those concerns.
Questions to Ask Compensation Software Vendors
Once you’ve narrowed down your search, you’ll likely have a few systems that stand out above the rest. At this point, it’s time to assess the vendors to see which one will come out on top. While there is no solution that is perfect for everyone, there will be an option that is best for your business. Asking a few questions will help you to decide which is best for you.
Does the vendor offer a demo?
It can be difficult to imagine how a system will work until you’ve actually seen it in action. Many vendors recognize this and offer a demo of the software to help you see just how well their product can work for you. Some vendors even offer a free trial of their software so that you can really get to know how the software works. Just like you wouldn’t buy a car without taking it for a test drive, you shouldn’t take home a new compensation management solution without driving it around the block.
What deployment options does the vendor support?
Your preferred deployment will depend on your business’ specific needs. While some businesses prefer cloud-based platforms, others prefer on-premise systems. Whatever the case may be, you’ll want one that supports the type of deployment you desire.
Does the vendor actively support system upgrades?
After you’ve spent countless hours researching and narrowing down your software search, the last thing you want is a system that will be obsolete in the next five years. You want to know that the vendor will actively update the software to ensure that whatever you use is always operating based on the best software available.
What integration solutions does the software provide?
As HR software advances and becomes more prevalent in the workplace, it will be important that your software supports integration. It’s likely that you already use some form of HR software, and you’ll want to be sure that your new compensation software can integrate with the products you already use.
Willis Towers Watson is a global advisory and financial services company that designs solutions to manage talent, risk, benefits/compensation and money for organizations. It allows company leadership to analyze and understand people, capital, and risks in their organization.It helps evaluate and manage performance, change, competency, diversity and inclusion, investments, rewards and other aspects. They also offer services including consulting, performance management, insurance and a variety of others to their consumers.
Performance Pro industry-leading performance management and salary administration applications. Our employee software is time-tested, content rich and are used by over 100,000 professionals. Designed by human resource professionals with decades of experience to be secure, effective, flexible and easy to use.
Meta4 is a unified cloud-based software that provides HCM, talent management, compensation and workforce management services. Designed to address both local and global needs for companies of all sizes, it manages the complete HR cycle, from payroll and personnel administration to global talent management.
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BalancedComp creates a precise salary and budgeting framework that not only provides employees with appropriate compensation, but also plays a key role in accomplishing the financial objectives of the executive staff and board of directors.
Our flexible, scalable HRMS solutions can help your organization boost productivity, streamline work flow and approvals, and align HR programs and initiatives with your organization's overall objectives. NuView Systems also provides HRIS implementation assistance, project management, on-site training, configuration, data conversion, and on-going HRIS support for our clients.
By implementing Infor Talent Management, you’ll be able to keep your critical talent engaged and motivated while helping to support your company’s strategic goals. Infor Talent Management helps you link your people with your business strategy, empowering you to make an immediate and lasting impact on your organization’s success. Plus, it helps you arrange key HR functions so your organization can find and keep the right people.
Adrenalin is one among the top providers of Web-Based Human Capital Alignment Software having a powerful presence since 2002!Has over 750+ customers; 8,00,000 users who come from various industries.
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