Why the Demand for a Compensation Software is Increasing?
According to various market researches done by several intelligence companies, the Global Compensation Software Market is expected to grow at a CAGR of 9% during the forecasting period of 2019-2026. More than 50%+of the market share is originated from the Americas and the market in APAC is expected to register highest CAGR. And Small/ Medium size enterprises are expected to show higher growth rate in demand than Large enterprise segment. In 2018, on-premises compensation software accounted for the significant share in the global compensation software market however demand for cloud-based compensation software is growing sharply and it is expected to witness the growth of over 12%, during the forecast period, which is higher than the overall market CAGR.
What are the key drivers in the Market? What is Changing?
Highly Attractive Benefits Offered by Compensation Software:
The benefits offered by compensation software, which includes optimized utilization of company revenue, enhancing positive reinforcement, boosting of employee performance, and improving company reputation during talent acquisition are expected to fuel growth in the market. On the other hand, automated compensation management process simplifies administration processes by reducing errors caused by manual work coupled with saving organizations’ money and time while improving efficiency and productivity.
Increasing Competitive Edge:
A smart compensation software helps organizations to take their strategy beyond numbers and budgets. It ensures that the incentives provided to employees are in line with the recent market trends, which helps organizations in maintaining low attrition rates. Moreover, employers can also identify top-performing employees by their work management, thus rewarding such employees for their effort. Also, it improves the workplace environment of the company, which plays a significant role in the performance and productivity of an employee. Thus, more companies are looking to adopt compensation software tools into their organizational activities to attract and keep top performers, build a solid employer brand and ultimately to sharpen their competitive edge.
Technological Advancements and New User-Friendly Software Launches by Market Players:
There is a clear shift from Core HR Suite to end-to-end Compensation Software since organizations do not want to rely on their core HR Suite and compromise their compensation strategy. A typical HR Suite can only manage certain aspects of a typical compensation process; thus, companies still manage some part of their processes offline, basically through traditional spreadsheets. But with the technological advancements and the smart offerings by “boutique' compensation software companies, the rules of the game are changing, more and more companies shifting their compensation processes out of their HCM. Unlike HCM market, approximately one quarter of the Compensation software market is dominated by major global vendors who offers full HCM suite, (for HCM market it is more than 50%). The concept of ‘integration’ is surely helping this change, most of the compensation software can be easily integrated to ERP/ HRIS and allows organizations to leverage their investments in existing processes and systems.
Nowadays, for any size of enterprise, for any type of compensation process, for any set of expectation, there is a compensation software available in the market. It is “the time” to manage employee compensation with confidence; the right tool can bring data intelligence, workforce agility and administrative efficiency to human resources while providing transparency of all compensation detail for reporting, total compensation statements and letters, and audit/ compliance reporting.
There is a compensation software out there which would help you to optimize the utilization of company revenue, to enhance positive reinforcement, to boost employee performance and engagement. Wishing you all the success and highest return on investment. For any queries/ feedback please feel free to reach out.
Co-founder/ Managing Partner Compport