The role of HR today isn’t just limited to evaluating candidates and choosing the best ones based on the talent and skills required. In fact, the Human Resources department has to manage the entire life cycle of the employee within the organization and that also includes managing employee benefits and pay.
HR today has to take compensation management seriously because it can directly impact the total budget, company goals, and cost to the company. Also, it is a critical part of any talent management and retention strategy.
In simple words, compensation management is the process of managing, analyzing, and determining the salary, incentives, and benefits each employee receives. However, compensation management is connected with individual goals and using financial benefits to boost employee engagement and attract more candidates.
Having the right compensation management software can make a huge difference. It is an excellent tool that can help HR to decide how to manage employee compensation and benefits without having to do much.
Hence, you need to look for the best compensation management software to make things easier and more convenient for your HR team.
How to Choose the Right Compensation Management Software?
In a world of automation, finding various analytical and integration tools isn’t hard. However, different businesses function differently, and therefore you need to be clear about how you would choose compensation management software that is right for your business.
This would allow you to make suitable investments and ensure that you can manage employee benefits and pay without having to make any changes to your current business solutions and systems.
Here are 6 factors that you should consider when comparing different compensation management software.
#1 Know Your Business Goals
When planning to buy compensation management software, you need to know your goals.
Also, when assessing these goals, you need to know if these align with the overall organizational goals. Ask questions about how you intend to use the software.
Will the HR team and managers only use it, or do you want to let employees have limited access as well? Do you want a lightweight program with a few important features to assist you with employee compensation or a comprehensive and all-in-one solution?
Similarly, you must know if you want an integrated solution or standalone software that matches your company’s objectives.
#2 Evaluate the Features
Once you have clarity on why you want compensation software and how you will utilize it, you need to narrow down on the features.
Different software has different features, and therefore, you must know how you are going to optimize those features and use them to make your job easier and more convenient.
#3 Focus on Integration Options
While you might choose standalone compensation management software, you should choose the ones that come with integration tools.
This would allow you to meet your strategic objectives and ensure that you can do more in less time. Compensation programs that allow you to connect with your existing software through API and built-in connectors would be easier to learn and help you save time.
In digital life, a lot more people today access information and data online through their smartphones and mobile phones.
Hence, it would be best if you looked for compensation management software that is mobile-friendly. This would allow them to access their benefits information and pay slips on their smartphones as and when they prefer.
#5 Improves Work Accuracy and Efficiency
Also, you need to focus on compensation management programs that allow your HR team to be more accurate and efficient when it comes to managing employee compensations, bonuses, and salaries. The software must have a centralized platform that automates and takes care of all employee data and records.
#6 Gain Valuable Budget Insights
One of the reasons for choosing compensation management programs is that you can streamline the long-term incentive planning process and track all the records automatically. The software must help generate reports and analysis to help you gain valuable insights into your budget.
Top 5 Best Compensation Management Software
#1 Workday HCM
Workday Human Capital Management is a cloud-based single system with a single source of data, security model, and user experience.
It offers compensation management features along with other features like performance management, payroll management, and employee self-service features that help HR teams and managers to automate workflow and do more in less time.
The software also has better integration features to help HR work with their existing business solutions and integrate data seamlessly. Workday HCM supports Web, Android, iPhone, and iPad platforms.
Paycom is a single user-friendly software that offers HR and employee-driven payroll features and benefits.
The software provides accurate information and workforce data that help HR teams to manage employee compensation, payout, and incentives.
This single system ensures that all the updates and changes made populate instantly.
This ensures no data errors or miscommunications between different HR personnel or departments. Paycom supports Web, Android, iPhone, and iPad platforms.
#3 UKG Ready
UKG Ready is a single system application that combines HR, payroll, talent, and scheduling and provides an all-in-one solution.
With an easy-to-read dashboard and robust workflows that are completely customizable UKG Ready offers an easy-to-use interface. Additionally, data is uploaded and synced in real-time, and therefore all information is available anywhere, anytime.
The software also integrates well with other solutions like HR service delivery and workforce management tools making it more effective and efficient. UKG Ready supports Web, Android, iPhone, and iPad platforms.
#4 Dayforce HCM
Dayforce Human Capital Management is an excellent tool for those looking for payroll, benefits, HR, workforce management, and document management programs. This single application provides businesses with access to real-time information from all domains of HCM.
This allows HR to make better decisions based on real-time insights and data.
Dayforce allows HR to manage employee development, process pay, and administer benefits while managing and monitoring compliance throughout the employee life cycle. With its single-user experience, it is easier to adopt and provides quick ROI.
Lattice is a people management platform that allows HR personnel to use data for compensation management for their business.
The software comes with continuous feedback tools, goal-setting options, and custom workflows that make it easier for HR teams and managers to manage their operations easily and conveniently.
Lattice supports only Web platforms.
Key Features You Should Look For
Once you have decided what you need in efficient compensation management software, you need to focus on the key features that you need.
Here are 20 key features that you should look for when you are choosing compensation management software.
#1 User-Friendly Interface
When looking for compensation management software, you want to keep things simple and easy.
Hence, it would be best if you focused on an easy-to-use interface that you can learn quickly.
#2 Easy Data Access
One of the main reasons why HR teams need compensation management software is to have access to data quickly. The software must have a centralized database to manage and update all employee records.
#3 Create Automated Workflows
Creating automated workflows can make things easier and help HR teams to automate repetitive tasks.
This makes the entire process simpler, and with automation, HR managers can provide necessary notifications for efficient data delivery.
#4 Self-Service Functionality
Having a self-service function in the software can also make things convenient for the employees.
This would allow them to keep track of their weekly goals and compensation rewards, update contact information, and track their events.
#5 Reports and Analytics
Compensation management software is incomplete without good reporting and analysis features.
This allows HR teams to have a clear picture of employee performance and get valuable insights readily available instead of doing the calculations manually. Also, it should allow you to view budgetary allocations by the department.
#6 360-Degree Feedback
HR teams have to constantly look out for better ways to be efficient and productive, and having compensation management software that offers 360-degree feedback would be important.
This would allow HR to gather and manage anonymous employee feedback from coworkers and managers.
#7 Customizable Dashboard
All software has a dashboard that offers visual data to quickly access data, essential points, features, and functions. These dashboards provide an overview of the situation and allow HR to make valuable decisions.
Hence, it would be best if you looked for software that has a customizable dashboard to get the right overview.
#8 Data Import and Export Functionality
Using employee compensation data to make important decisions would require you to import and export data to similar applications.
Hence, your chosen software must have data import and export functionality to help you migrate records and visual cues.
#9 Custom Integrations
Choosing compensation management software that comes with custom integrations would allow you to use the software with other external applications and programs. This would help you create complete HR solutions to save time and transfer data seamlessly.
#10 Easy Onboarding Options
The software must also have easy onboarding features to streamline the onboarding process for new employees. The software must allocate checklists, passwords, and access management features.
#11 Set and Track Goals
The compensation management software must come with a feature to help employees set and track their individual goals and development and see their progress over time.
#12 Employee Performance Information
The software must provide bonus payment information and employee appraisal data based on real-time feedback and performance outcomes.
#13 Tax Management
Compensation management software must also come with features that allow HR to comply with local and national taxation regulations.
#14 Connecting with Performance Management System
Linking compensation management with a performance management system automates the entire process of setting bonuses and incentive payouts, and salaries based on the efficiency and performance of the employee.
#15 Planning and Budgeting
Choosing compensation management programs with excellent planning and budgeting features would allow you to manage funds across different departments.
#16 Travel Budget Tracking and Management
HR also has to keep track of all the expenses an employee makes to stay on top of budget reimbursements and manage the department budget.
#17 Expense Forecast
When opting for compensation programs, you need to look for systems with automated predictive analysis options to help you stay ahead of the curve. This would showcase your upcoming revenues and expenses based on your past data and regular reports.
#18 Multi-Currency Support
Businesses today have branches in different countries, so HR has to convert currencies manually. Choosing a compensation management program that offers multi-currency support would help you see information on taxes, payments, and reimbursements in different currencies.
#19 Multi-Account Control
HR teams and managers often have to work in sync, and therefore choosing a compensation management program that has a multi-account option allows you to create more than one user account and authorize access to information as you want.
#20 Instant Notification
Choosing compensation programs and systems that come with instant notification allows you to stay in control and manage important and time-sensitive work.
Compensation management software isn’t just about business finances but much more.
With the help of this software, businesses can boost their employee motivation and retention using financial rewards. The software would also help streamline payment adjustments and provide better equity payout tracking.
The software can help companies with long-term incentive planning and administering compensation packages for employees, teams, and even departments. It also ensures that employee compensation is fair and merit-based, which would attract more candidates and talent to your business.