Compensation management is a balancing act. HR leaders need to match their priorities such as employee compensation, performance bonuses, and operational budget against pressing issues like disparity, employee needs, economic fluctuations, and war for talent.
In order to play the balancing act well, there is a dire need for meaningful insights and process transparency. This is precisely why HR leaders need to take the first step towards streamlining their compensation management process.
However, you can’t jump start the search by diving head first into the sea of HR technology offerings. Even if you manage to narrow a few compensation tools based on your employee size and budgetary restrictions, it is still hard to pinpoint the best software.
To select their first compensation management tool, small businesses need to determine their business requirements and identify the functionalities they need. Listed below are five steps that can set you up on the right path to find the best compensation tool for your small business.
1. Determine your goals
The first step is to understand what exactly you’re trying to achieve with a compensation management tool and assess whether or not these goals align with the overall objectives of your business.
Once you’ve taken this step, you can move on to understand how you intend to use the compensation management tool. Do you plan to let all your employees’ access the tool or restrict it to just the HR team and finance department? Do you really want an exhaustive compensation system or can you make do with a light-weight compensation tool that keeps your data organized and secure?
By asking yourselves these questions you can kick start your search in the right direction and narrow down your search.
2. Talk to your users
Talking to the people who will be using the system can give you a better idea of the features it needs and the data points your tool must handle. Business owners need to have these conversations with both end-users like employees and power-users like HR leaders and the finance department.
These discussions will not only help businesses get a clear picture of specific requirements that a compensation tool needs but also offer insights on the level of training that needs to be provided before onboarding everyone onto the new tool.
3. Zero in on features that you need
The third step is to gain in-depth insights of the features and functionalities you need in your compensation management system. When you take a look at the compensation software offerings in the market, you can find a range of tools from light-weight systems that offer basic functionalities to a feature-heavy offering that comes with SSO, workflow automation, and more.
To find the right compensation tool, businesses need to understand which features offer real benefit and which are just a vanity offering. The key here is understanding the fact that even the most sophisticated and feature-rich compensation management tools are worthless is they are too complex to operate or if they are not suited for your day-to-day activities.
4. Look for integration-friendly tools
The fourth and the most important aspect for any business software hunt is to check whether the tool of your choices plays well with your existing software stack. You need to see for yourself how well your shortlisted compensation management tool connects with all your existing software stack through API and built-in connectors.
5. Assess its mobile-friendly nature
The digital life your employees lead demands that any and all business tools you make them use must have mobile offering for easy accessibility. This means that all your HR leaders, functional managers, and employees should be free to access their payslip and other compensation-related aspects anywhere, anytime.
Bonus: Top 5 Compensation Management Tools in the Market
There are an array of compensation management tools available in the market today making the selection process challenging. To help you cut to the chase, we have compiled a list of compensation software that stand out from the crowd
Compport is an agile compensation management tool that is flexible to serve the simplest need for an SMB and powerful enough to meet the most complex compensation demands in an enterprise. It empowers businesses by incorporating cost efficiencies, productivity, and engagement in the compensation process.
Compport accommodates nearly all the scenarios that help analyze compensation data for any organization. What’s more, it helps organizations implement and communicate all compensation related information in a single platform without any hiccups.
Being a financial forecasting tool by nature, it helps businesses solve their compensation troubles by replacing their old excel files and manual updating process. While it can do nearly anything from analyzing large data sets to offering complete transparency, it has trouble with metadata management and sharing data across modules.
CompensationXL standardizes the compensation management workflow by streamlining the approval process, ensuring timeliness and accuracy in end-of-cycle statements, and making actionable recommendations.
Harvest HCM enables businesses to automate their end-to-end compensation program including stocks, equity, and promotion with an easily accessible, web-based interface.
PayScale provides businesses with on-demand compensation data to create, track and analyze a compensation strategy that meets their business needs.
Businesses of all sizes have started using compensation management tools to streamline the process and track their hard dollar spend better. With the evolution of technology, compensation tools have evolved as well.
While all the compensation solutions listed above offer an incredibly powerful compensation management experience, their feature sets and functionalities set them apart. So, before leaping onto a specific product, it would be better to take a look at each tool and verify whether or not they suit your unique compensation management needs.
If you’re on the lookout for the right compensation management tool, give Compport a try and see if it’s the right fit for your organization. We’ll get on a free call with you to understand your requirements and help you make the right compensation management decison.