Compensation strategies that entice employees to stay at the company are more important than ever.
According to a report by the Society for Human Resource Management (SHRM), more than two-thirds of organizations surveyed said they have a difficult time recruiting for job openings.
Agility in compensation management is crucial – the approach needs to be flexible and can’t rely on rigid standards. Best practices include using in-depth data to figure out compensation for each employee or employee group. As with most data-driven approaches, this helps you make better decisions.
Luckily, with the help of compensation planning tools, any business can understand and evaluate the effectiveness of their compensation strategy.
How Can You Make Compensation Planning Easier?
Compensation has become much more complicated, as it’s no longer just about exchanging money for time.
Today’s compensation plan must maximize the effectiveness of the budget for each employee and department. At the same time, it needs to provide satisfaction and security to your employees, ensuring that they’re compensated fairly.
What’s more, a good compensation plan incorporates ways of motivating employees to perform at their best. You can do so by providing a range of performance incentives that are appealing, relevant and quantifiable.
That’s why investing in the development of a solid compensation planning strategy is worth it. A method of ensuring that your compensation budget is allocated as efficiently as possible can have a considerable effect on your company’s success.
How to Develop an Effective Compensation Management Strategy
One of the first steps in developing a compensation planning strategy is to thoroughly analyze your current one. How do you do so? By using compensation planning and analysis tools. They help you see a clear picture and quickly spot areas for improvement.
There are several success stories of organizations completely revamping their compensation strategy with data-based insights.
With the help of compensation management software, it’s much easier to develop an auditable compensation planning process that’s transparent, and the extensive reporting capabilities provide a more convenient way of analyzing information.
What is Compensation Management Software?
Compensation management software helps businesses streamline and automate their compensation planning process. It accomplishes this by optimizing budget allocations and aligning compensation decisions with an organization’s guidelines.
These systems provide the tools to develop competitive compensation strategies that help attract and retain top talent.
The powerful calculation engine that’s present in the leading compensation management software allows you to allocate rewards to those who deserve it.
It’s essential to adequately reward your best employees to keep them motivated and happy. In fact, according to a survey by Glassdoor, 46% of U.S. employees expect a pay raise in the next 12 months.
Even though salaries aren’t the only way to compensate employees, a clear strategy for increasing employee salaries is a key component of keeping them happy.
Compensation management software helps you develop an intelligent compensation plan. This plan can not only optimize your salary budget but also take into account other incentives such as bonuses, benefits or stock options.
Still, it’s important to note that in order to reap the most out of the available software solutions, the right management team has to be present. Plus it has to be willing to make the right decisions and develop a comprehensive policy.
The end goal is to have a compensation planning strategy that ensures that your company’s best talent is enticed to stay. You also need to be sure that they won’t be easily lured away by competition. At the same time, the strategy must be lucrative enough to lure top talent away from other companies.
What Tools to Use?
There are plenty of compensation management solutions out there, but here are a few of the most popular:
PeopleFluent is one of the leaders of social capital management software provider. The PeopleFluent Compensation Management solution offers versatile options to develop comprehensive compensation strategies that help to retain and attract top talent.
PeopleFluent Compensation Management is a robust solution that’s developed to handle compensation planning for large companies with thousands of employees. It has a powerful calculation engine with self-service configurability, allowing you to quickly design, model and execute global compensation strategies.
One of its strongest advantages might be the flexibility that PeopleFluent compensation provides. With the software, businesses can quickly adopt their own rules and customize worksheet views. This makes it much easier to manage total compensation plans, saving you time in the process.
PeopleFluent Compensation can take over all forms of compensation, including short and long-term incentives, equity, spot awards, salary ranges, promotions and much more.
There’s a wide range of visual tools available to help quickly process your compensation data and understand the impact of decisions. In addition, robust business intelligence and analytics tools help you make informed decisions.
HRsoft is another excellent solution that provides a wide range of tools for managing compensation and rewards. You’ll find extensive customization capabilities and a long list of features built to simplify compensation planning.
The system is very user-friendly, providing all the tools necessary to businesses of all sizes. HRsoft enables managers to make decisions quickly, saving time while also building a comprehensive compensation planning strategy that fits the needs of each company.
HRsoft helps you find the best possible way to use available budgets, helping automate the entire compensation planning process. And since it’s based in the cloud, HRsoft provides instant access to managers wherever they are.
While HRsoft is very accessible and easy to deploy because it’s cloud-based, that doesn’t mean that it’s any less robust than its on-premise competitors. You’ll find a long list of functions that handle compensation planning tasks like merit upticks, bonuses, equity and salary progressions.
The software can even take into account both departmental and individual performance to make the best possible decisions.
UltiPro is another solid compensation management software option for SMBs. It’s also a great choice for companies that want an entry-level solution without a huge commitment.
Like HRsoft, UltiPro is an all-inclusive solution that’s based in the cloud. Even though it’s designed for smaller businesses, the functionality and benefits that you can expect match up with many of its more prominent competitors.
The main reason why UltiPro has been gaining popularity is the value it brings compared to the price. It provides a wide range of human capital management (HCM) functionality, going beyond just compensation planning. This is a great asset for companies that want a solution with a wider scope.
UltiPro comes with personalized recruiting and onboarding tools, making it much easier for new employees to understand their benefits choices. UltiPro also helps with payroll calculations, managing performance and development and developing succession plans.
The system even provides easily-accessible business intelligence and reporting tools that help you make smarter, data-driven decisions.
With UltiPro, you can develop an effective compensation planning strategy — one that accurately determines compensation, bonuses and other incentives based on guidelines, budgets and performance.