About the Compensation Impact survey
The survey was completed by 204 HR professionals from a wide range of organizations. The distribution of company size is shown in Figure 4.
What do companies like (or dislike) about compensation software?
If you are considering getting new compensation software, then it’s helpful to learn from the experiences of your peers.
Our survey asked a variety of open-ended questions about what companies liked or didn’t like about their compensation software. The two main issues for small companies were ease of use and flexibility; for mid-tier and enterprise companies, integration was also an issue (see Figure 3).
Figure 3: Features of compensation software most frequently cited
Important features |
Small organizations |
Mid-tier & enterprise organizations |
Easy to use, learn, and implement |
66% |
50% |
Flexible, configurable, and comprehensive |
26% |
21% |
Integration with other systems |
5% |
25% |
Cost |
3% |
4% |
While no one mentioned global capability unprompted, when asked if global capability mattered, 41% of companies with over 1000 people listed it as one of the deciding factors.
Takeaways for small organizations |
Takeaways for mid-tier & enterprise organizations |
1. When buying compensation software, pay attention to ease of use, ease of training, and ease of implementation.
2. Be sure that you get the flexibility needed for your business needs now, and likely needs in the near future. |
1. In addition to ease of use and flexibility, look closely at integration issues.
2. If you are a global firm, then the capability to handle global currencies will be a deciding factor in your choice. |
When do you need an HR suite?
One perennial concern of HR leaders is whether the need to integrate different software packages will create problems. Overlooking integration issues can create headaches. On the other hand, overemphasis on buying pre-integrated modules can lead to headaches as well.
Pre-integrated but underpowered or inflexible modules often lead HR managers to leave the module unused and instead go back to doing the work in Excel.
Each situation is different; for your specific situation, ask:
- How much better is the standalone tool?
- How difficult is integration in this case?
Takeaways for small organizations |
Takeaways for mid-tier & enterprise organizations |
1. Integration is usually not a top concern for small firms.
2. Compensation software is usually Excel or an in-house solution; people in the company may be reluctant to switch.
3. Track the hours spent on compensation to determine the cost benefits for your organization. |
1. Find another company that has done the same integration you are considering to learn exactly how easy or difficult it is.
2. Run a range of test scenarios on any software you intend to buy so that you don’t get stuck with a solution that is integrated, but can’t do the job.
3. Even though your company is big, getting a suite to change compensation software requires numerous requests and is not likely. |
The link to performance management and HR Suites
This survey focused on compensation software; however, it’s important to see compensation software through the lens of performance management.
Often the biggest issues in performance management arise from the compensation element, and if you don’t get this right it can be hard to get people to focus on goal setting or individual development.
Compensation Impact Takeaways for all organizations
1. One of the most important features of compensation software is that it should support making the right compensation decisions as part of the performance management process.
2. Get the compensation side of performance management sorted out first, and then
managers can concentrate on goal setting and development.