9 Best Compensation Management Software Tools (2024)
The best compensation management software tested and reviewed by HR tech experts. See feature comparisons, pricing data, benefits, drawbacks, and more below.
Best Compensation Management Software
Compensation management software is essential to the modern human resources department. Compensation adds up to 70.3% of total employer costs in the private industry. Therefore, it’s important for HR teams to take extra care when planning how to pay employees.
Many other factors contribute to needing compensation management software as well. Not sure the monetary value of a specific skill? Having trouble tracking performance-based compensation across different teams? Trying to boost retention through transparent payment decisions?
To simplify your buying process, we handpicked the best compensation management solutions out of dozens in the market. Before you decide to buy, check out this guide to understand what’s out there, how much each product costs, what to ask on demos, and more.
To identify the top-tier Compensation Management Software, we evaluated dozens of tools across multiple criteria taking into account user feedback, demos, interviews with each company’s product team, and our own experts’ insight. We placed significant emphasis on three pivotal aspects: compensation management features, market analysis & benchmarking capabilities, and integration with HR systems.
- Core Compensation Management Features: The selected solutwions facilitate salary planning, performance assessment, bonus distribution, and equity administration. These features empower businesses to make informed compensation decisions, align employee rewards with performance, and optimize the overall compensation management process.
- Market Analysis and Benchmarking: Effective compensation management requires insights into prevailing market trends and competitive benchmarks. We focused on software solutions that enable businesses to compare their compensation practices with industry peers, access real-time market data, and make data-driven decisions to ensure competitive and fair compensation packages.
- Integration with HR Systems: To make the cut, the compensation management tools we picked had to offer compatibility with HRIS, HCM, and other essential HR platforms, ensuring seamless data exchange and minimizing manual data entry.
Aeqium
beqom
HiBob
Pave
PayScale
CompAnalyst
COMPview
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Aeqium
Aeqium combines the best of automation and flexibility, simplifying compensation management processes while allowing deep reconfigurability. With its intuitive platform and customizable workflows, Aeqium empowers HR teams to handle complex compensation cycles without needing external consultants or tech support. Plus, its reporting and insights tools provide real-time visibility, giving a clear edge in decision-making.
PROS
- Flexible Configuration: Highly customizable workflows and calculations without the need for specialized support.
- User-Friendly Interface: Intuitive dashboards that require minimal training for any kind of user.
- Real-Time Updates: Immediate changes propagate throughout the system during compensation cycles.
- Cost-Effective: Offers competitive pricing compared to similar tools like Pave.
- Strong Support: Dedicated Customer Success Managers and responsive support teams.
- Flexible Configuration: Highly customizable workflows and calculations without the need for specialized support.
- User-Friendly Interface: Intuitive dashboards that require minimal training for any kind of user.
- Real-Time Updates: Immediate changes propagate throughout the system during compensation cycles.
- Cost-Effective: Offers competitive pricing compared to similar tools like Pave.
- Strong Support: Dedicated Customer Success Managers and responsive support teams.
CONS
- Manual Payroll Integration: Currently, changes must be uploaded to payroll manually, but an automated sync is on the roadmap.
- Feature Gaps: Some functions, like ATS integrations and benchmarking data, could be expanded (but are being worked on as we write this).
- Initial Setup Hiccups: Some users have reported minor challenges during onboarding, though they are always solved swiftly by customer support.
- Manual Payroll Integration: Currently, changes must be uploaded to payroll manually, but an automated sync is on the roadmap.
- Feature Gaps: Some functions, like ATS integrations and benchmarking data, could be expanded (but are being worked on as we write this).
- Initial Setup Hiccups: Some users have reported minor challenges during onboarding, though they are always solved swiftly by customer support.
Aeqium excels at reducing the manual effort and errors typically associated with spreadsheets or rigid HRIS systems while letting users retain total control of their data. In other words, its system is as flexible as a spreadsheet but with structured workflows. Customers can calculate anything they need, write custom logic, perform validations, and manage budgets—top-down or bottom-up— without external consultants or tech support.
One of the main motivations behind Aeqium’s development is to allow for deeper and easier collaboration between managers and the people team. The tool works through customizable reviewer chains where the decisions about an employee’s compensation can be communicated up and down the chain for swift approval and revision.
Another feature that stood out during our demo was their Compensation Cycle Dashboard. It centralizes all compensation data, integrates with HRIS and equity systems, and allows HR teams to complete compensation reviews in hours instead of weeks. Its real-time update feature enables users to adjust formulas or logic mid-cycle, a level of flexibility that is, in our view, unmatched by traditional tools.
As an example of this flexibility, let’s say you are reviewing proposed salary changes. If you decide mid-cycle to change the formula driving the compensation proposals, you can make the adjustment in the backend. Then, the updates will propagate immediately across the system, without you having to restart the compensation cycle.
The Compensation Insights feature also stood out during the demo because it delivers proactive data points about employee compensation. For instance, it can help you identify pay equity issues, such as when employees may be out of band or have an upcoming drop in equity vesting. The comp team can then present this information to managers and work on mitigating issues like this before they arise.
While Aeqium is highly customizable, a few drawbacks remain. Automated payroll integration is still in development, and some users have expressed the desire for integrated benchmark data. Nonetheless, the team is quite responsive to customer feedback and has been known to release new features based on user suggestions.
Companies like IFS, DBT Labs, Front, Warby Parker, Loft Orbital, and Braze use Aeqium. Their customer list has grown considerably during the last year.
Aeqium's pricing isn’t publicly disclosed, but customer feedback suggests it offers competitive rates, often significantly lower than the competition. Notably, the platform also offers add-ons like compensation analysis and a total rewards portal.
Best For
Aeqium is ideal for mid-sized to large companies (200–6,000 employees) that require flexible compensation management and real-time configurability. It works well for industries like tech, consumer tech, and insurance, where dynamic compensation processes are essential.
beqom
beqom has a 99% customer retention rate for a reason. It’s a comprehensive solution to compensation management with powerful planning, budgeting, and forecasting functions that let you track headcount and compensation based on data from across your HR tech stack.
PROS
CONS
beqom’s compensation management software is a comprehensive suite with everything from performance, salary, and bonus management to budget planning and forecasting. Additional features allow you to measure compensation across gender, age, and race to uncover gaps, boosting transparency and equal pay in your organization.
You can also break down total compensation into smaller categories, such as executives and individuals, to get a granular understanding of how you’re paying different people.
- Lowe’s
- the Adecco Group
- BNP Paribas
- PepsiCo
beqom‘s pricing model is an all-inclusive annual fee. For specifics, you must contact a representative to get a quote based on your needs.
Best For
Large and enterprise companies.
HiBob
Hibob’s compensation management software is built into its people platform, but it’s strong enough to stand on its own with powerful reporting and collaboration tools.
PROS
- They have tons of modules, which makes them a real one-stop shop. Beyond Core HR, they have modules for most things People Ops-related.
- Bob is a fast-growing company and their product looks the part, as it has one of the sleekest-looking platforms in the HRMS space right now.
- Their payroll hub allows you to connect all your payroll systems, which works great if you want to pay people in multiple locations without switching providers.
CONS
- Customer support is only offered via a chatbot and email.
- As to implementation, several users commented that they felt there could be more attention via personal walkthroughs provided at the beginning. Many had to resort to reading documentation and watching videos or just figuring things out by themselves.
- Pricing is only custom and available upon request, so you can’t just sign up, pay, and start using the tool.
Hibob’s compensation management software is linked to its existing people platform, making it a great choice for companies looking for an all-encompassing HR suite. However, just because it’s a feature in bob’s larger platform, it doesn’t mean compensation management is an afterthought. It’s a powerful, efficient tool with yearly compensation reviews, equity and bonus allocation, detailed reporting and analytics, and so much more.
- SmartRecruiters
- Fiverr
- DraftKings
While Hibob doesn’t disclose pricing online, you can contact its sales team for a custom quote.
Best For
Small to mid-sized companies looking for an HR suite with compensation management built in.
We use Bob everyday. It is an integral part of our business. The key workflows we use Bob for are hiring, onboarding, offboarding, internal mobility, employee engagement and assigning tasks.
As a startup company, I love the ability to automate my daily HR administrative tasks. I’m very impressed with the onboarding capabilities for both in office and remote hires. In addition, the ATS integration with Workable is great to streamline hiring.
We were introduced to HiBOB at an HR Technology convention. We were seeking software to automate our hiring workflow process. Bob allowed us to create customized workflows, and implement e-signature documents which drastically improved our onboarding process. Bob also was very useful in helping our HR team with our company reorganization.
It would be nice if Bob had its own ATS to eliminate the requirement for third-party software.
Bob is different from its competitors for several reasons. I find the user interface and experience to be more desirable than a few other platforms. Bob is easy to navigate and has the ability to customize my dashboard. Most importantly our new hires love the straightforward modern onboarding process.
The first thing people should look for is to determine if the tool aligns with your company needs and goals. People should also make sure the tool integrates with their existing tools i.e. ATS. The next feature to consider is the cost per employee. An ideal tool will offer reduced rates as your employee/user headcount increases.
Bob has evolved overtime to meet the new HR landscape and policies surrounding things such as the use of Ai. They continuously provide monthly newsletters with additional templates and tips for HR professionals. Bob also introduced a DEI dashboard.
Small to medium
Larger companies
Pave
With access to over 40,000 employee records from 500+ companies, Pave has some of the strongest benchmarking data in the compensation management space.
PROS
CONS
Pave’s compensation management software stands out because of its three-pronged approach: Plan, Communicate, and Benchmark.
Your company can make smart, purposeful compensation decisions based on real-time salary data, analytics, and merit cycle workflows for administering bonuses and equity. Employees have access to a dashboard to view salary, equity, bonuses, and benefits as part of their total compensation. This same visualization is offered to top candidates as well to promote transparency in the hiring process.
Pave also provides real-time, up-to-date market salary data to bolster compensation decisions.
- Allbirds
- HOVER
- Canva
Pave’s pricing is not available on their website. You must contact a sales representative by clicking the “Request Demo” button in the top right corner of its website.
Best For
Companies looking to provide transparent compensation to employees and candidates.
We used Pave both internally and externally. Externally, we used their offer letter functionality to help prospective hires understand their total rewards, including compensation, equity, and other benefits/perks. This feature helped us secure a few candidates.
Internally, we used it for market data/benchmarking, creating pay bands, and compensation planning. Their compensation planning tool was straightforward to set up, with a helpful implementation team guiding us through detailed worksheets to ensure everything was entered correctly.
The tool seemed designed by someone with a deep understanding of compensation, allowing us to add necessary information and enabling managers to make well-informed compensation decisions. It was also easy to mark promotions, make notes, approve changes, and keep everything in one place, saving us time by generating compensation reward letters.
Pave is incredibly easy to use and integrates seamlessly into our processes. It enhances transparency for employees regarding pay bands, pay information, and total rewards. The Pave team, from sales to implementation to account managers, was consistently helpful and pleasant to work with.
I was initially searching for a compensation planning tool to reduce the time my team and managers spent on compensation planning. It was important that the tool incorporated pay bands and other functionalities.
Pave encompassed a large part of what we needed, winning us over with its comprehensive compensation tool, pay bands, market data, and offer letter tool. The tool appeared very user-friendly, which was a significant factor in our decision to purchase it.
We ended up using it for only a year because their pricing increased significantly, making it impractical to keep when we also needed to cut costs.
The cost after our first year became too high to justify. They acquired Option Impact, which was great, but it would be better if they still allowed free access to global compensation data, not just US data. The price point can be prohibitive for small companies that could benefit significantly from the tool.
Pave includes many features that compensation departments need, with an intuitive design that supports HR and compensation professionals while being easy for employees and managers to use. These features make it stand out above the rest. I had considered Lattice, but it seemed cumbersome and less effective compared to Pave's more spreadsheet-like and user-friendly interface.
Consider who will use the tool the most and whether it is easy for them to navigate. Assess who will save time using it, how much time, and the value of that time. Finally, evaluate potential cost savings from reduced turnover if employees better understand their compensation.
Pave has continually added features to create a more equitable and transparent compensation process.
Pave is ideal for companies focused on compensation planning and offer letters/total rewards views. It is particularly geared towards venture-backed tech companies for market data.
It might not be suitable for organizations with many hourly employees, as my experience was with a population that was 95% salaried employees.
PayScale
PayScale is the trusted compensation platform for more than 7,500 customers, ranging from small businesses to Fortune 1000 companies.
PROS
CONS
PayScale recently merged with Payfactors to become one of the largest compensation software providers in North America. PayScale has a few different offerings under its umbrella, including Insight Lab, MarketPay, PayScaleTeam, Benchmark, and PayScale Data. With so much variety, customers can pick and choose which features they specifically need.
Certain product suites are geared towards company size as well. For example, MarketPay is designed with the enterprise customer in mind. Therefore, companies of all shapes and sizes can find a solution tailored to their needs. PayScale also offers numerous compensation resources on their website based on thorough research.
- Patagonia,
- The New York Times
- Wendy’s
- UnitedHealth Group
- Bloomberg
Pricing is not available on PayScale’s website. However, it does offer a free job pricing if you make an account.
Best For
Companies of all sizes that need a tailored comp management solution.
We use Payscale every time we post a job opening to ensure we list an appropriate salary range. It is also used during our annual performance review cycle when giving raises. We consult it when considering promotions to ensure we are paying at market value. We use it to evaluate our competitiveness in the market. Additionally, we reference it when considering title changes.
I appreciate how Payscale’s team provide extensive support during setup. They set everything up using our job descriptions, making it very easy to use when considering promotions. I find it extremely user-friendly. I also love the amount of data it provides, ensuring accuracy when price-matching a role. The tool is very organized as well.
We purchased a Payscale Insights contract to price roles and ensure we were competitive with our salary offerings. We used it to compare our roles with market prices. It has been helpful during our annual performance review cycle when giving raises and considering promotions. We also use it to price new roles. We have been using it for three years.
Some roles are missing information when trying to price match, such as limited data for certain titles. There are so many features that it can feel overwhelming. The initial setup process takes a long time.
I've used other systems, but they tend to have limited data. Payscale offers a wealth of information, ensuring that you're using an accurate tool. I also feel their customer service is much better than that of competitors.
If you only need to match a few roles, I recommend paying per role rather than spending $3,100 to track your entire team. It's also important to consider the setup process, which takes time. If you decide to cancel your subscription, keep in mind that you will lose all the data you’ve entered, so it's a tool you'll likely want to commit to long term.
Payscale has expanded its network and pool of job data over the last three years. They have also increased the number of reports you can generate and added more tools. They now offer different plans as well.
Payscale is ideal for companies hiring for multiple roles or with numerous positions. I wouldn't recommend it for companies with fewer than 20 employees. It works best for medium to large-sized organizations.
Payscale may not be suitable for small companies with fewer than 20 employees or those not actively hiring. It is also not a good fit for organizations with primarily commission-based roles.
CompAnalyst
Salary.com’s CompAnalyst is the largest HR-reported source of market pricing, with 800 million market data points in 22 countries.
PROS
CONS
Salary.com’s CompAnalyst solution is a few different features under the same umbrella name. Its standard feature set includes labor cost forecasting, total compensation statements, survey management, reporting & analytics, and merit modeling.
Specifically, its Market Data tool is renowned for its massive database of market pricing. In addition, you’ll get instant access to over 50,000 named executives from public US companies, easily benchmarking your executive headhunting.
What makes CompAnalyst stand out, is its ability to grow alongside your organization. There is a standard feature set ideal for HR teams of one or two, which can expand as your company builds out a talent acquisition team and eventually a dedicated compensation team.
- GE
- Hallmark
- Toyota
- Wegmans
- Nordstrom
CompAnalyst is made up of a few different solutions, which you pay for separately. You must get in contact with a sales rep for detailed pricing.
Best For
Companies of all sizes will find CompAnalyst useful. As your company grows, you can expand your feature set from the base level.
I use CompAnalyst as part of my compensation toolkit. Specifically, I use this program to assist in benchmarking both hourly and salaried positions within my organization. By utilizing market data and compiled survey responses, I can see what other organizations of similar size and location are offering for various positions. This tool is also valuable when determining wages for newly created roles.
The platform is user-friendly and easy to navigate. It provides current market data that is refreshed monthly and includes compensation survey data from a national survey base. Additionally, the program offers reports that can be downloaded with minimal editing required.
I have been using CompAnalyst since April 2024, but my organization implemented it in September 2023. My organization needed a compensation benchmarking tool that could be used for overall benchmarking, job pricing, and market data analysis. CompAnalyst was chosen to address these needs and has since become an essential part of our compensation process.
Currently, my organization only has the basic model of this program. To access merit tools or performance management resources, an upgrade to the more robust package is necessary. Also, when trying to benchmark or price industry-specific jobs, data is not always available. In such cases, a request must be submitted to Salary.com to add the job and collect data, which can lead to longer turnaround times.
CompAnalyst provides not only market data but also access to Salary.com's extensive survey results at no extra cost if you participate in the survey. The platform also functions as a merit cycle tool and can generate Total Rewards or Total Compensation statements for all employees.
Organizations should consider their internal compensation philosophy and how they want to determine wages for their current positions. Once this is established, they should assess the type of data needed to price jobs and provide benchmarking information for their compensation structures and ranges.
The tool is updated monthly with refreshed market data and additional trending jobs. CompAnalyst also continues to enhance its resources, including webinars and whitepapers.
This tool is ideal for organizations with a defined compensation philosophy and a desire to offer competitive wages to both new hires and current employees.
CompAnalyst may not be suitable for organizations without an internal compensation strategy or those that prefer to rely solely on internal compensation calculations.
COMPview
COMPview is a flexible solution for companies of all sizes. It’s designed to adapt to any compensation plan, whether simple or complex.
PROS
CONS
COMPview, the compensation management software offered by HRSoft, is a no frills compensation solution that can easily adapt to any compensation model.
Upon logging in, users are met with a detailed dashboard that provides birds eye details on the status of compensation. From there, different users can access different functionalities. Frontline managers can make recommendations for their team members, leaders have access to a workflow for reviewing and approving, and upper management will receive detailed reports and compensation statements.
COMPview’s value proposition is being agile to meet the different requirements of its variety of customers. As such, they provide a dedicated customer support team that will be with you from implementation all the way to customer success.
- Nintendo
- Square
- Ameriprise Financial
- WellCare
COMPview is priced on a per employee per year model, plus a flat implementation fee.
Best For
Companies of any size looking for a flexible comp solution.
Compete
With a sleek and easy-to-navigate platform, Compete stand out for offering real-time data about benefits and compensation in the tech industry. HR leaders at hundreds of tech companies use their platform to stay competitive in their offerings and retain their people.
PROS
CONS
Compete’s co-founder and CEO, Amit Rapaport, comes from the world of HR. During her years in several roles, she realized that a major challenge for most HR people was tapping into real-time compensation data. Addressing this pain point is why Compete was founded. Each and every one of their customers provide data from their organization in an anonymous manner, which is fed into their ever-growing database.
On the user side, HR and hiring managers can search for any role, see how much it pays, and look at the benchmark for benefits and other forms of compensation. There’s hard data for salaries, dozens of benefits such as vacation days, maternity leave, healthcare, 401K, and of course benchmarking data about equity. Managers can then make their own conclusions vis a vis compensation and make an informed effort on how to retain their employees.
Many of the leading unicorns and public companies in tech are Compete’s customers. Some of them are Fiverr, Monday.com, Rakuten Viber, HoneyBook, Taboola, Riskified, ironSource, and Melio. Compete also caters to tech companies of all sizes.
Compete is available at a single price and they’ve made sure it’s affordable for startups as well, even if you only hire one person. Regardless of your company size, they offer an unlimited amount of seats.
Best For
HR leaders, CFOs, and Venture Capital Funds in tech.
ChartHop
ChartHop promises to take you beyond manual spreadsheets with their compensation planning solution that automatically generates a compensation review plan to share with management based on any metrics you choose.
PROS
- ChartHop seamlessly integrates with existing HR and ATS systems, streamlining processes by centralizing functionalities.
- The tool's organizational chart has long been a standout feature. It allows users to edit and navigate company structures easily. This fosters efficient communication and change tracking after reorganizations.
- ChartHop's goal-tracking interface is user-friendly and intuitive, simplifying goal management.
- The Map feature fosters a sense of togetherness for remote teams, enhancing employee engagement.
- Charthop nicely integrates with your existing HR and ATS systems. Having everything under one roof means not having to use ten different applications.
- Charthop’s organization chart is its biggest asset. Their drag-and-drop feature to edit the chart is a hit amongst a majority of the users. Overall, the tool makes navigation throughout the company really easy - you can find the people you need, figure out their responsibilities, and track changes after the latest company re-organization.
- Charthop's goal tracking interface is simple, intuitive, and easy to build. There's not much else you can ask for.
- Charthop's Map feature allows businesses to see where each employee is located. For organizations that work remotely, this promotes a feeling of togetherness, which is crucial for employee engagement.
CONS
- Navigating ChartHop's organizational chart can be challenging due to its fast zooming and somewhat unintuitive gestures.
- ChartHop's search function lacks user-friendliness and, from our research and testing, occasionally provides incorrect results.
- Compared to other tools, some users have shared that the user interface of ChartHop can seem outdated and cumbersome.
- Charthop's organization chart navigation isn't the best. The chart zooms in and out quite quickly, and the gestures aren't intuitive, making it difficult to use.
- Charthop can be a little complicated to figure out. Also, the fact that there are so many features is a little intimidating.
- Charthop's search function isn't user-friendly. There's not much information on how to use it effectively, and it sometimes throws the wrong results.
- Charthop's UI is somewhat dated and clunky.
ChartHop’s compensation management solution is excellent at distributing salary data and creating personalized scenario planning.
Your team decides what information to share with managers, from compensation and performance data to demographic and benchmarking data. Once all that information is chosen, ChartHop automatically creates compensation scenarios and exports it to detailed “smart guides” for managers to see.
Managers can then add their proposed changes to a dashboard that forecasts how the compensation changes affect the company. After that, they can approve changes and move them up the chain of command. It’s a powerful, intuitive tool that streamlines the review process.
- Peloton
- OpenAI
- better.com
ChartHop’s compensation planning solution is a part of their suite of employee management products.
The pricing tiers that offer compensation planning are Grow, Scale, and Enterprise. They are $7 per employee per month, $10 per employee per month, and custom priced respectively.
Personalized support is provided in ChartHop’s enterprise pricing plan.
Best For
Any company looking for an entire people planning suite with compensation built in.
Compensation Management Software Use Cases
Compensation management tools are incredibly useful across the employee lifecycle. Picture the beginning of the candidate journey. What’s the market pay for the role you’re hiring? How much do you bump their salary after 2 years, assuming they perform well?
These questions and more are answered with comp management. Here are a few more use cases.
- Enhance recruitment: Comp software helps provide clarity to what the market pays for a role. It will give you and your recruiting team a range for the job. This beats the old way of asking the hiring manager or using free sources.
- Boost retention: You’ll be able to tell how your employees are paid relative to the market. Therefore, you can make adjustments to prevent someone from leaving because of a better-paying opportunity elsewhere.
- Budget and model for future needs: Since compensation can make up 70% of the company budget, it’s essential to know how strategic decisions will impact compensation. If you are opening in a new location, hiring brand new roles, or implementing a new incentive compensation policy, these tools can help you understand costs.
- Deliver bonuses and equity: Instead of relying on a complicated spreadsheet to calculate bonus and equity amounts, your compensation software will do this for you.
- Manage compensation survey data: For those already using salary survey data, the software can help manage it all in one place. Additionally, many offer tools or services to help with the tedious task of survey participation.
- Manage job descriptions: Job descriptions are just as impactful on compensation. A role with additional responsibilities should pay more. Descriptions should emphasize that. Some vendors have a tool, while others outsource this function to partners.
- Build transparency and equality: Compensation management platforms have tools that show where you can improve equality in the workplace. By recognizing gender and racial pay gaps, your company can take steps to overcome implicit biases. Many software solutions promote transparency as well. Employee dashboards break down their compensation on the individual level.
Pitfalls to Avoid When Using Compensation Management Tools
When considering compensation management software, it’s important to avoid common pitfalls that may occur.
- Avoid shiny object syndrome: During a sales pitch, you may have seen powerful analytics tools and smooth UX that attract you to a certain vendor. But it’s essential to understand what your must-have features are, so you can separate them from the nice-to-have and extraneous features. Think about what’s essential. Otherwise, you might waste your budget on tools you’ll never touch.
- Understand the professional services vendors offer: Sometimes organizations will position their solution with a “dedicated” compensation professional with “unlimited” access. These terms are often used as a selling point. Be sure you understand how the services work, how quickly you can expect replies, and the skills of the services team.
- Implementation takes time: Adopting a compensation management software takes time and prioritization from your team. There are no instant solutions where you just send over an HRIS, API key, or CSV and everything is up and running. Discuss timelines and expectations with vendors upfront.
- Be mindful of contract length: Three-year or five-year contracts with big discounts can be tempting, especially when you’re trying to be budget-conscious. However, this could leave you with software you don’t like or don’t use. Be sure you know the cancelation policy, and choose a contract length that allows you to reevaluate after a reasonable amount of time. If you do your research beforehand, this shouldn’t be an issue. But sometimes unforeseen things happen, and you don’t want to be trapped.
- Know the data sources: It’s critical to understand where vendors source their data from and how it is validated in your compensation software. There are many different approaches that exist. For example, a data set may be validated by compensation professionals, but be very limited in job titles. Another may be from a large data source, but weak in certain regions. Think critically about what data is important to you and choose a vendor accordingly.
Benefits and ROI of Compensation Management Software
It’s much easier to gain buy-in with decision makers if you have a firm grasp of ROI. Compensation management software has many benefits that will provide measurable returns for your business. Here are a few that you can bring up to your superiors:
- Save time and costly errors: Having a streamlined process for pricing a job will save you countless hours. Being able to model and use pre-built reporting provides insights you may have never discovered in Excel without the risk of errors.
- Strengthened employee loyalty: When making informed compensation decisions, employees can rest assured they are being paid competitive salaries and bonuses. As a result, they will feel valued by your company, which builds loyalty.
- Ensured compliance: Compensation compliance can be tricky, especially if you’re hiring remote workers from different geographic locations. Instead of doing all the granular research yourself, comp management software automatically assists with staying compliant
- Decrease days to fill job req and false starts: Knowing the approved salary range for the role and what the market pays will ensure you avoid the dreaded “oh I was looking for $10k more in base pay.”
- Increased transparency: Employees who know what, how, and why they are paid are more engaged and less likely to leave. By being able to communicate a paid strategy from a high level as well as an individual will impact retention.
- Equal pay: Many comp solutions pull data from your HRIS or HCM to map salary and bonuses in accordance with gender and race. By recognizing pay gaps, you can take initiative to create an equitable workplace.
- Save money: In addition to saved time, comp management software saves money too. Benchmarking data shows you if you’re overpaying for a new executive. You can tweak company-wide bonus structures based on integrated performance or talent management data. These are just a couple of many examples.
Compensation Management Pricing
Compensation management software is priced either through a subscription or a license.
Companies such as ChartHop or Hibob, that offer comp management through their greater product suites, charge on a per user per month basis. Companies such as CURO charge for an annual license, which is based on how many employees you have. You will have to pay upfront for a license, whereas subscription you pay per month.
This will often come with implementation and service fees. If you sign a longer term contract, you may receive a discounted rate.
Don’t be afraid to negotiate a better price. For guidance, read our ebook on how to get the best pricing in HR tech.
Key Features of Compensation Management Software
Compensation management software is designed to streamline all of your comp operations. The features reflect that goal.
- Salary management: Easily keep track of how much employees make and use that information to make future compensation decisions.
- Performance management: Compensation management software often has performance management tools to determine eligibility for bonuses and equity.
- Bonus and equity administration: Comp management software automatically determines who is eligible for bonuses and equity based on performance, time since hire, and other factors. Once HR managers gather this information, they can submit it to managers for approval all in the system.
- Planning, budgeting, and forecasting: Using past and current data, your company will be able to plan compensation budgets and headcount. In addition, you can use this data to forecast where your company’s needs will be in the future. Detailed dashboards make this easy to visualize.
- Market analysis and benchmarking: Many comp solutions have access to detailed salary information from across the job market. You’ll be able to tell what competitors and peers are paying their employees in similar positions. As a result, you can offer new hires competitive compensation based on market data.
- Integration with HR systems: Compensation management systems centralize all your people data to make informed compensation decisions.
Questions for Demos
Before you get on the call, you need to think critically about your needs. Ask about key features, implementation timelines, customer success, and all the other variables that will help you make the right decision. It’s important to not be distracted by the bells and whistles.
Here are some suggestions for questions to ask:
- How can your product help me achieve my compensation goals?
- Can you benchmark this job for me?
- How do I build a report? How would I present this to others?
- We are opening a new office. How would I model the compensation costs with your software?
- Does this integrate with my human capital management system? If not, how much work will it take on our end to connect them?
- What features do current clients use the most?
- Are there automation features?
- Is the training required in the implementation process self-service, or hands-on with a customer success team?
- Has your product lengthened the employee lifecycle for your customers?
Implementing Compensation Management Software
Implementation of compensation management software differs from company to company. Generally, you should expect to spend a few weeks to a few months on the process.
The typical steps include set up, data integration, training, testing, going live, and post-going live review. If price is a concern, double check about implementation fees with your vendor of choice. Your first choice of vendor might have a lower annual cost, but charge big service and implementation fees that actually make it more expensive than your second choice.
Compensation Management Software FAQs
What is compensation management?
Compensation management is the process of determining the wages, salary, bonuses, equity, and benefits employees and potential hires receive.
What is compensation management software?
Compensation management software are solutions designed to streamline comp processes. They achieve this by automating processes that would typically be done manually or in spreadsheets.
What are some benefits of compensation management software?
Benefits of compensation management software include saved time and money, transparency and equal pay, ensured compliance, and heightened employee retention and satisfaction.
What are the features of compensation management software?
Compensation management software features include salary and performance management, benchmarking, reporting and analytics, planning, budgeting, and forecasting tools, and bonus and equity administration.
Final Advice and Important Takeaways
When choosing a compensation management software, think critically about your goals. Each of our featured vendors will provide you with streamlined comp management. Therefore, you must consider the extraneous factors that might make a certain vendor stand out.
Are you mainly looking for salary benchmarking? Choose a vendor with a huge database of salary information. Are you looking for an entire HR suite with compensation included? Choose a vendor that offers that feature set. Are you looking to spend as little money as possible? Take a look at each vendor and compare costs.
Regardless, you will end up with a useful solution. Just make sure you focus on the must-haves rather than the nice-to-haves.
Finally, compensation is necessarily linked to performance. If your team is having a hard time building out a detailed bonus plan, performance management software will make it much easier to track OKRs and annual reviews. Take a look at our performance management software landscape for more detail, including pricing, ROI, benefits, features, and more.
About Us
- Our goal at SSR is to help HR and recruiting teams to find and buy the right software for their needs.
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- SSR lists all companies we feel are top vendors - not just those who pay us - in our comprehensive directories full of the advice needed to make the right purchase decision for your HR team.
