How Compensation Software Empowers Your HR Team

Benchmarking, salary bands, reviews… compensation planning can take hours and hours of HR time. 

But there’s a better way. Compensation software empowers HR teams by streamlining compensation planning processes, enabling data-driven decision-making, and ensuring pay equity. 

What’s more, it helps manage complex pay structures and ensures compliance with legal regulations. Sounds good, right? If you want to tap into those kinds of benefits, it’s essential to choose the right software. Here’s what you need to know, including key features, real-world benefits, and how to select the best software for your needs. 

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What is Compensation Software?

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Compensation software helps HR teams manage a wide range of pay processes, including salaries, bonuses, benefits, and equity. 

Most HR technology for compensation offers a range of core functions, including:

• Compensation planning 
• Pay equity tools for analysis and management 
• Integrations with payroll and HRIS systems 
• Market data integration
• Performance-based compensation 

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The Role of Compensation Software in Streamlining Compensation Planning

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Compensation software brings all kinds of benefits to HR teams, from saving time to helping HR teams manage their budgets more effectively. Here’s more about what makes it so indispensable. 

Manual tasks like compensation planning take a lot of time — but it’s estimated that automating these kinds of tasks can save up to eight hours per week. Compensation software allows HR teams to automate pay adjustments and raises, freeing up a significant amount of HR time. At the same time, this automation reduces the chances of errors creeping in. 

That’s not the only benefit, though. Many compensation software solutions also include budgeting tools, which help HR teams efficiently allocate their budget for salaries, bonuses, and incentives. 

Lastly, the forecasting and modelling capabilities of compensation software are helping HR teams predict future compensation needs. By modelling various scenarios, for example, inflation or changing market needs, it’s easier to plan for the future and increase the chances of organisational success. 

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Enhancing Pay Equity with Compensation Software

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When it comes to attracting top talent — equitable pay is where it’s at. So while compensation software is excellent at streamlining compensation planning — it’s also becoming a crucial driver of pay equity.  

The first step in moving toward pay equity is conducting a pay equity analysis, which involves a significant amount of data collection. The good news? Compensation software can help! By identifying disparities, this software helps HR teams resolve the salaries of any affected employees, and then set goals for how to move towards equitable compensation across all roles and departments within the company. 

Ensuring compliance with labor laws like the Equal Pay Act and the EU Pay Transparency Directive is also an essential part of HR’s role. Of course, that’s something that compensation software can help make a lot easier, too. By providing clear insights into any pay discrepancies, this software makes it much easier and faster to identify and resolve any issues.

Lastly, moving toward pay equity helps companies improve transparency around pay practices, which in turn helps improve trust and boost employee morale. This can have a big impact on vital metrics like employee engagement, performance, and retention. Over time, it also has a positive effect on the reputation of the company, making it easier to hire top talent. 

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Improving Employee Satisfaction and Retention through Compensation Software

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Talent attraction is key — but once you’ve hired the best talent it’s also crucial to keep them satisfied and engaged, so they’re more likely to stay with the company. Here’s how compensation software can help achieve this:

• Performance-based rewards: The right software helps HR teams reward high performance with bonuses and incentives, helping link pay and productivity.

• Employee access and transparency: Depending on the level of transparency your organisation is aiming for, compensation software can allow employees to view their pay structure and understand their total rewards, helping boost trust and transparency. 

• Retention strategies: By helping create fair, competitive compensation practices, HR teams can effectively retain top talent. 

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Key Features of Effective Compensation Software

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Salary planning software is becoming a must-have for HR teams. Here are the key features to look for during your search:

• Integration with HRIS and payroll: For best results, look for software that can integrate with your existing HR tech stack. This makes it much easier to streamline the flow of data between HR and payroll systems, avoid duplication, and reduce errors. 

• Advanced reporting and analytics: Choosing software with reporting and compensation analytics features makes it easier to track compensation trends, and the impact of pay-for-performance initiatives, plus ensures your pay practices are compliant with local laws. 

• Customisable compensation plans: Different roles, departments, and performance levels often require tailored compensation plans, which can easily be created if your chosen software allows for customisation. 

• Budget tracking and cost controls: Choosing software with budget control features allows HR teams to accurately monitor spending on salaries and benefits.

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Want to discover some of the top compensation software? Here’s our top choices, including pricing, key features, and usability. 

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Real-World Benefits of Using Compensation Software for HR Teams

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Want to know how others are making HR compensation tools work for them? Check out these real-world benefits:

• Time-savings: Before they used compensation software, the HR team at Treatwell relied on time-consuming, manual surveys to try and track down salary benchmarking data. Figures gave them speedy access to the reliable, international salary data they’d been missing. 

• Enhanced strategic decision-making: Data-driven insights from Figures helped Welcome to the Jungle make informed, strategic decisions about its compensation structures. 

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To discover more benefits, read our full library of customer case studies.

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Selecting the Right Compensation Software for Your HR Needs

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If you’re now convinced you need compensation software — here’s how to choose the right one.

Step 1: Identify your company’s specific requirements 

Some software will suit startups working in one country, while others are better suited for legacy businesses operating across multiple regions. Knowing your company’s specific needs will help narrow down your shortlist. Things to consider include your organisation's size, industry, and region. 

Your compensation structures also play a part, for example, if you have employees overseas, offer performance-based bonuses, or plan to conduct salary benchmarking. If you plan on integrating any compensation software with your existing tech stack, make sure they’re compatible. 

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Step 2: Consider scalability and flexibility 

In a fast-moving market, companies can quickly expand. That means it’s important to make sure any software you choose can also grow and adapt to your organisation’s changing needs and workforce. 

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Step 3: Consider cost vs. value 

A high-quality employee pay management tool is definitely an investment — but it’s also important to consider the potential return. Choosing a tool with the right balance of features and benefits will help maximise the value you’re getting. Plus, remember to factor in the time saved when HR no longer has to carry out manual salary surveys.  

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Step 4: Test different platforms 

By this point, you should have a shortlist of platforms that meet all your current (and future requirements), are within your budget, and have proven their value for other organisations. Now it’s time to get testing! 

Many brands offer a free demo, which is a great way to check how intuitive they are to use. This is also a good time to see how easy the platform is to implement, plus the speed of their customer support department — particularly important if your organisation has limited technical support. 

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Empower Your HR Team with Compensation Software

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An effective compensation strategy is one thing — but when this is combined with the right data and the right HR tech… that’s when the magic really happens. The right compensation software brings so many benefits, from streamlining compensation planning and enhancing pay equity to improving employee satisfaction and performance. 

If you’re ready to supercharge your HR team, compensation software is just what you need to keep pace with the ever-increasing demands of the modern world of work. 

To see if Figures is the right platform for your HR team, book your free demo today. 

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