Insights from the 2016 Compensation Impact Report
Three findings not to be missed
- Most companies with 1000 or more employees find that they need compensation software (53%).
- Most companies are happy with their compensation software (63%) but almost all companies are happy if it’s cloud-based software (80%)
- What matters most to companies that are experienced with compensation software is ease of use, ease of learning, and ease of implementation. (But it still must be flexible and configurable).
When do you need compensation software?
Does your company need compensation software? It depends on the size of the organization. Most smaller organizations (less than 1000 employees) get by without it. However, once you cross the 1000 employee threshold, most companies have compensation software.
|
Takeaways for small organizations |
Takeaways for mid-tier & enterprise organizations |
|
1. Most small organizations think that they don’t need compensation software.
2. Many who use Excel dislike it; now over a decade old, compensation software may become more relevant in the near term.
3. However, if your compensation plans are complex, or revenue is over $10 million, then even a small company will benefit from specialized software. |
1. Most mid-tier/enterprise organizations need compensation software, yet some still cling to Excel or custom versions despite inaccuracies and lack of security.
2. If you don’t have software yet, but are feeling the pressure to do better, create a roadmap for HR technology investments and ensure that compensation software is included on that roadmap.
3. Tying compensation to performance is a key trend going forward. |
When do you need a compensation software upgrade?
One of the myths of compensation management is that you just have to live with inadequate tools. Fortunately, good, affordable tools now exist and a significant number of companies are now on the lookout for better tools (see Figure 2).
|
Takeaways for small organizations |
Takeaways for mid-tier & enterprise organizations |
|
1. 19% of small companies are looking to upgrade their solutions.
2. Ask for demos of compensation software so that you get a sense for the capabilities of these tools.
3. Factor in training to convert your company from Excel or in-house platform to one compensation software in one place that everyone sees and works on. |
1. 26% of mid-tier/enterprise companies are looking to upgrade their solutions.
2. If you find that your existing compensation software is cumbersome, then you have probably outgrown it.
3. Many larger companies buy compensation software as part of a suite. Yet complex compensation plans can stretch the limits of suite compensation software, and changes adaptations are not likely to happen. |
Key Takeaways – Compensation Software Upgrade
When a company reaches 1000 employees (and sometimes sooner than that), it usually needs specialized compensation software. At that point, using Excel or Access is not effective and in fact ends up costing the company money.
The two most important criteria for choosing compensation software are that it should be:
• Easy (i.e., easy to use, easy to learn, easy to implement)
• Functional (easy to manipulate data, flexible, and configurable)
The evidence from this survey suggests that companies that bought a cloud-based solution are very likely to be happy with that choice.