Best Compensation Management Software in 2024

Compensation is a company’s largest expense AND the number one motivator when it comes to recruiting and retention. But facilitating compensation is an incredibly complex, and unfortunately, manual process. It involves months of planning, budgeting, expectation-setting, and communicating. 

If compensation is so important, and the processes involved so time-consuming and error-prone… why is it so rarely automated with technology?

What is Compensation Management?

Compensation spans a wide range of crucial processes that involve multiple departments, (primarily HR and Finance) and multiple data sources (including payroll, HRIS, performance management, equity and benefits administration, ATS, and a trillion miscellaneous spreadsheets).

Compensation management is the design, implementation, and administration of systems to facilitate employee compensation. This includes turning benchmarking data into a job architecture and then into pay bands, running various merit, bonus, and promotion cycles, and educating your employees about their total rewards.

Effective compensation management is crucial to keep employees happy, engaged, and willing to stick around. Plus, it keeps your company competitive in the labor market and results in a motivated and productive workforce.

Why is Compensation Management software important?

Compensation management software can take care of the nitty-gritty details of managing compensation, leaving your team more time to work on more strategic initiatives. Using tech to handle compensation is not only efficient but it also saves money, boosts your capacity and gives you a clearer view of what’s happening in the big picture.

But, once you’ve decided to get the software help you need (and deserve), you’ll quickly see that all solutions aren’t created equal.

What makes the best Compensation Management software?

An effective Compensation Management platform should be able to automate each of the important areas of compensation, not just one of them. Below are the main criteria to look for in a compensation management tool:

1. Customization

First, and arguably most important, you need flexibility from your comp management platform. The tool should fit your strategy, existing calculations, nomenclature, etc.–not the other way around. 

Your compensation tool should be as flexible as you are. From sorting out job taxonomy to delivering custom information to different employee groups based on permissions, your company is unique, and you need a compensation management tool that gives you the same freedom as Excel (minus the Excel headaches).

Questions to ask each vendor:

1.) Can we customize the fields shown on each screen – including custom information (compensation history, employee cost center), and calculated information (prorations, order of operations, etc.)?
2.) Can the fields shown vary by user group? (manager, exec, admin, etc.)
3.) Can you support the way we calculate our bonus/incentive program?
4.) Can we customize the approval flow? (i.e. who’s responsible for each review and how that rolls up to the respective executives)

2. Cost

Price will likely be an important factor in the purchase decision. Compensation management software is typically priced on a per employee per month basis, and should be extremely cost-effective when comparing the amount of time saved for the team in charge of compensation (or even additional headcount freed by implementing a solution).

The price of compensation software can vary a lot. Some are budget-friendly, while others charge a premium with high minimums that just don’t work for smaller companies.

Ideally, you’ll want to find a provider that doesn’t have “implementation fees” or one that is willing to waive said fees. You should not have to pay twice to use a solution.

Questions to ask each vendor:
1.) What is your price per employee? What’s the minimum total price?
2.) What is the implementation fee?

3. Ease of use

Compensation is complex, so it’s imperative that your solution provide a simple and seamless experience for managers, employees, and admins alike. It should promote visibility in your organization and reduce compensation-related questions.

Admins should be able to make changes at any point in the compensation process! Data should be intuitive to manipulate. Managers need the ability to make educated decisions pertaining to their purview, with an understanding of both individual employees’ information and high-level company guidelines. Employees should have a hub to easily understand their past, current, and potentially future state of compensation (depending on the level of transparency at your company).

Questions to ask each vendor:
1.) Can I make changes to everything in the platform without assistance? (examples: changing reporting structure, adding/removing an employee from a review cycle, and adjusting calculations mid-cycle)
2.) Can I see a product demo of what my reviewing managers will see? (confirm the product is intuitive and easy-to-use)

4. Integrations

Compensation data coming from various places can be a bit of a puzzle which can sometimes lead to errors when you are trying to piece it all together. Your compensation management tool should integrate with all your sources of truth (including payroll, HRIS, and performance management) and ingest any miscellaneous spreadsheets you use. Pulling real-time data directly from the source removes the possibility of version control issues and easily identifies discrepancies between the different sources.

The integrations should also support your preferred method of SSO, making the tool secure and easily accessible.

Questions to ask each vendor:
1.) Do you integrate with my HRIS system without any additional cost?
2.) Can I mix-and-match different data fields from different sources?
3.) Do you support SSO?

5. Support

Compensation is stressful enough—especially during crunch time when you’re in the middle of a cycle. You should have direct access to a compensation expert familiar with your account to expedite your needs—no logging tickets, watching videos, or reading through tutorials.

Admins need the ability to (A) make changes themselves to any portion of the tool without having to wait for a solutions engineer and (B) have a direct line to their contact with <1 hour turnaround time (chat is usually the quickest).

Everybody else (managers, employees, etc.) should also have a way to contact the support team directly so that you don’t need to spend time fielding questions and acting as a mediator.

Support is often overlooked as a tangible benefit, but can often make or break the success of an organization with their compensation management platform.

Questions to ask each vendor:
1.) How do admins contact your support team? Do you support live chat via Slack or Microsoft Teams?
2.) What is your response time?
3.) Do I have a dedicated point of contact? How much compensation experience do they have?
4.) What does training for managers look like?
5.) What do managers and employees do if they have questions about the tool? Do you support in-product live chat?

Introducing: Comprehensive Compensation Management Tools

Comprehensive is an all-in-one compensation management platform for automating compensation reviews, communicating total rewards with employees, benchmarking, and managing pay ranges – with integrations to existing HRIS and performance management tools.

Our priority is to ensure success on our platform by improving all compensation processes at your company. Comprehensive will significantly reduce the time and energy required to administer your initiatives and increase trust in all things compensation from executives, managers, and employees.

Comprehensive is the most customizable and cost-effective compensation management software. It’s easy to use and offers high-touch support with the promise to get you up and running in <2 weeks.

Ready to get out of spreadsheets and start automating your compensation management? Let’s chat!

Compensation management software dashboard | Comprehensive | managing pay increases | compensation review | compensation planning

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