What do employees want? Fair pay! When do they want it? Now!
These (justifiable) demands for fair pay, combined with the fact that compensation is usually an organization’s biggest outgoing, means HR teams are under pressure to ensure fair and competitive compensation — right now.
But HR teams are also expected to do more with less — which often means taking a long hard look at what’s slowing you down..
Often the answer is pay reviews. Hours spent trawling industry reports and salary review websites aren’t a good use of anyone’s time, and it’s often a challenge to figure out when these reviews will actually happen, and where the data will come from.
But because these reviews are an essential and non-negotiable aspect of an equitable compensation policy, removing them isn't an option. Instead, forward-thinking organizations are turning to automation and compensation management software.
In this article, we’ll look at how this software can transform the pay review cycle, plus the benefits and features you should look out for.
The Role of Compensation Management Software
As HR teams look for ways to streamline the pay review process, compensation management software is quickly becoming the go-to solution.
This software is designed to unlock easy salary review decisions by providing a centralized location for all compensation data — from salary benchmarks to employee performance and industry standards. It can also save time by automating pay calculations, meaning HR teams have more time to focus on other tasks that need a human touch.
What’s more, using the right compensation management software helps ensure compliance with company policies and regulations.
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Benefits of Using Compensation Management Software for Pay Reviews
If that already sounds good — there are even more benefits to this kind of software. Here’s what you need to know.
Time savings
Research estimates that HR teams spend up to eight hours a week on manual tasks. Automation (like compensation management software) can help boost productivity and at the same time, empower HR teams with the data they need to make informed, equitable decisions.
Accuracy
Working across multiple spreadsheets using data from different sources is a recipe for disaster. The potential for errors increases, as does the amount of time spent trying to track down the details you need.
Compensation management software solves this issue by providing a single, secure platform for all your data. This not only reduces errors but ensures you’re adhering to company privacy guidelines.
Transparency
More than ever before, employees want to know how their pay is calculated. And with the right compensation management software, it’s easy to show them.
When you use software, all compensation decisions are backed up by robust data. And this means it’s easy to share the outcome of any pay reviews, and the evidence behind it, with employees. This kind of open, transparent culture boosts trust and shows employees that all pay decisions are made on an equitable, consistent basis.
This kind of transparent approach also helps to create a company culture where all employees know they’re valued. What’s more, they’re involved in decisions around their pay, and understand where the data that informs these conversations comes from.
In addition to boosting trust, adopting a transparency approach to pay reviews can help boost employee engagement and performance, at the same time as decreasing turnover. This approach can also help attract top talent as your organization develops a positive reputation with job seekers.
Find out more about how pay transparency enhances company culture.
Compliance
Pay transparency laws will soon be in force, and it’s better to be proactive and prepare for them now. The right compensation management software records all pay decisions — plus the data that’s used to justify them.
In addition to helping identify and resolve any pay inequities ahead of time, this information means you’re prepared for the EU Pay Transparency Directive when it comes into force.
Employees also want to know their data is being protected. Choosing software with the highest levels of security compliance means their data is in safe hands. We recommend choosing a provider:
- With SOC 2 and ISO 27001 certifications
- That complies with GDPR regulations
- Uses European cloud storage
- Uses aggregated and de-identified data
By the way… Figures adhere to all these security recommendations and more.
Data-driven insights
Forward-thinking companies know that informed decisions are critical for equitable pay. By basing pay decisions on real-time market data and benchmarks (that are relevant to your organization’s size, industry, and location) it’s much easier to justify each decision.
Insights like this can also help organizations stay ahead of the curve, particularly crucial in competitive, fast-moving industries like tech. By leveraging data-driven insights to inform salary ranges and pay reviews, it’s easier to attract and retain top talent — whose efforts at work then help drive overall organizational performance and success.
Features of Compensation Management Software for Pay Reviews
Curious about what features the best compensation management software has? We’ve got you covered.
Here are the five features we recommend looking out for.
1. Centralized database
Many HR teams spend too long switching between different databases looking for the information they need. Instead, using software that stores all employee compensation data in one single, secure platform can boost productivity — and ensure all employee data is kept confidential.
2. Performance tracking
Pay-for-performance is an effective tactic for maintaining employee motivation and performance. But you need the right data to inform pay reviews.
Choosing software that integrates employee performance metrics with the rest of your data means the information needed to inform compensation decisions is right there at your fingertips.
3. Compensation planning
Employee compensation usually makes up the largest percentage of a company’s budget — and managing this correctly can make a difference to your bottom line.
Software that includes tools for designing and managing compensation structures and budgets means you can maximize your available funds while also creating competitive salaries that attract and retain top talent.
4. Workflow automation
Choosing a platform with automated workflows and notifications helps streamline the pay review process, freeing up your team's valuable time for other tasks.
5. Reporting and analytics
Involving employees in their pay decisions is one of the best ways to cultivate trust. By choosing a platform that offers customized reports, it’s easier for HR leaders and managers to share the data that informs pay reviews. This kind of transparent process helps to boost employee trust and satisfaction.
Reporting dashboards are also crucial for monitoring pay trends, assessing where salary ranges sit relative to the market, and identifying areas for improvement.
Real-Life Success Stories From Existing Figures Customers
Ready to see how the right compensation management software can transform your compensation processes? Here’s how Figures can make a difference.
How Klarx attracts and retains top talent with a forward-thinking compensation policy
When construction machinery rental company Klarx wanted to update their compensation review process, they turned to Figures.
Previously, this process had been time-consuming, inaccurate, and frustrating — using Excel spreadsheets and manual data collection from salary review sites like Glassdoor.
Now, thanks to Figures benchmarking tool, the review process has become streamlined, efficient, and accurate.
Here’s what Klarx achieved:
- Attracting top talent: With the right data, setting competitive salaries for new positions becomes easy.
- Retaining top talent: Klarx aims to retain around 95% of their top performers — and the salary data from Figures makes this possible. By checking how salaries line up with the market rate, Klarx can ensure their salaries are set at the right level to retain talent.
- Cultivating trust: The data from Figures helps inform open conversations about pay between managers and their teams.
How Slimmer AI uses compensation reviews to boost transparency and champion fair pay
When artificial intelligence company Slimmer AI wanted to create a more transparent and equitable compensation review process, they knew they needed access to reliable, up-to-date benchmarking data.
Previously, the HR team had relied on industry reports and informal conversations with others in the same industry — meaning they didn’t feel confident in the accuracy of their data.
That’s when they turned to Figures. The real-time, accurate data from Figures makes benchmarking salaries an easy and intuitive process, rather than something that takes hours.
Here’s what Slimmer AI achieved:
- Accurate leveling: Thanks to the Figures dashboard, benchmarking takes minutes, not hours. The HR team can now quickly and accurately identify small differences in levels that they couldn’t previously identify.
- Streamlined salary reviews: Slimmer AI reviews employee salaries bi-annually, using Figures data to check each employee’s pay is on target. This data is also used to quickly identify which employees are below benchmark, have performed above expectations, or are due for a promotion.
- Increased transparency: The HR team now holds regular outreach sessions covering how each employee’s pay is calculated, the data used to inform pay decisions, and how performance and pay are linked.
Considerations for Selecting Compensation Management Software
So… you’re convinced you need compensation management software. But how do you choose the right one?
Not all software is created equal — and we should know. When selecting the right software to meet your needs, we recommend considering the following:
- Scalability: As your organization grows, so should your compensation management software. Look for a platform that offers the ability to benchmark multiple salaries. It’s also important to choose software that offers benchmarking data for different organizational sizes, as the benchmarking data for a startup will be different from that of an established enterprise business.
- Integration capabilities: Choosing software that seamlessly integrates with your existing tech stack makes sure all your data is easily accessed from one place.
- User-friendliness: Even if it’s backed up by the best data, a platform that’s difficult to use won’t yield the results you’re looking for. Ask for a free demo before you sign up, so you can check it’s intuitive and easy to navigate.
- Customer support: The pre-purchase experience can tell you a lot about what kind of customer support you can expect when using the platform.
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The Future of Compensation Management is Here
Ready to see how it works for yourself? Check out our Compensation Review module to see how we make fair pay, the easy way.
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