9 Best Compensation Management Software Tools (2025)
The best comp management software tested and reviewed by HR tech experts. See feature comparisons, pricing data, benefits, drawbacks, and more below.
Best Comp Management Software
Compensation management software is typically a cloud-based SaaS tool that helps HR and finance teams plan, manage, and optimize employee pay. These tools facilitate compensation processes like salary planning, bonuses, equity, and pay-for-performance programs. Comp 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 comp 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, pitfalls to avoid, 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.
I used Bob for a couple of years to support a company’s recruitment efforts. The primary modules I relied on included the recruitment module for posting job advertisements, managing candidate pipelines, and overseeing the onboarding process. It played a crucial role in organizing these workflows and ensuring a smoother hiring experience.
Bob is a very user-friendly tool for both administrators and applicants. The recruitment analytics were effective for a company of this size, which had fewer complexities in terms of organizational structure and recruitment goals. It provided a strong candidate experience for those comfortable using computers and technology.
Our medium-sized US company needed a more efficient tool to enhance the recruitment process. During peak hiring seasons, we required a more organized approach to posting job openings, managing candidate pipelines, and streamlining the onboarding experience.
Bob proved to be user-friendly, and while I have used more intuitive HRIS systems in the past, this one effectively met our needs. It was particularly useful for managing high-volume recruitment during critical times. I used this tool for a couple of years during my time with the organization.
Bob's training posed a significant learning curve for management teams who were unfamiliar with similar tools. While it worked well for employees and managers regularly using computers (e.g., in customer service, sales, and accounting), it was challenging for frontline workers in packaging and production roles due to their limited technological skills.
The tool was not ideal for smaller companies or larger, more complex organizations with global needs.
From a user-friendliness perspective, Bob ranks highly. However, in terms of functionality, other tools I have used, such as Workday, Paradox, and PeopleSoft, offer more advanced features that are better suited for larger, more complex organizational needs.
If you are looking for a system that is user-friendly and well-suited for a medium-sized company with predominantly office-based employees, Bob would be a great fit. However, for companies with a diverse workforce, including frontline employees, or those with highly complex needs, other solutions may be more suitable.
It has been a few years since I used Bob, but at the time, it effectively met the basic needs we had. That said, it lacked the advanced functionalities required by larger organizations with more complex requirements.
Bob is ideal for medium-sized organizations, especially those without highly complex or global organizational structures. It is also more suitable for companies with employees who are comfortable using technology.
Bob is not a good fit for larger corporations with more complex organizational structures or smaller companies that may find it unnecessarily costly and overly complex for their needs.
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.
I use Pave weekly for various tasks at our company. It helps me track records and data, enabling responsible compensation decisions that retain employees while adhering to the company budget. I streamline approval flows and access historical logs of each employee. Pave provides proactive insights into team compensation relative to their band, such as compa ratio and range penetration, allowing me to identify and resolve inequities. I also use it to track and address employees paid above or below market standards promptly.
The customer care team is highly supportive of any technical challenges. The band templates are easily customizable and visualizable, saving time compared to starting from scratch. The pricing is favorable and does not negatively impact our ROI.
I have used Pave for two years. Our company purchased Pave to address the challenge of seamlessly integrating with ATS tools, equity management tools, and HRIS/payroll systems. We needed an effective way to access, share, and automate data and payroll processing for employees globally while complying with various HR policies. Before implementing Pave, this integration and compliance were significant challenges. Pave has enhanced my management and HR skills and helped me run merit cycles to prevent pay inequality in our organization.
The user interface needs improvement; fonts are unclear, and it lacks many external tool/app integrations for comprehensive market data. The compensation planning module requires technical expertise to understand and use effectively. It takes considerable time to understand and deploy the tool fully, and the user experience needs enhancement, such as allowing avatar uploads and profile information edits.
Pave maintains consistent pricing and offers high-class support through live chat, unlike competitors that rely on email and ticket systems for support.
Consider the technical skills required to set up and use Pave effectively, as it demands proficiency in technical and data science skills. Ensure that your team has the capability to leverage the full advantages of the software.
Nothing significant has changed with this tool since I started using it.
Pave is ideal for data scientists and human resources professionals.
It may not be suitable for companies that are not in the recruitment sector or data analytics.
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.
I used PayScale to gather market compensation data for roles within their respective locations. During market benchmarking analysis, it was invaluable for reviewing and comparing job descriptions. The platform was also used to create job bands and develop career paths for employees.
PayScale provided HR resources, including up-to-date employment compliance information, which supported decision-making. It was particularly useful during annual performance reviews, salary adjustments, and employee promotions.
- I appreciate the extensive data PayScale offers as a compensation tool.
- It has been instrumental in ensuring market compensation equity and helping the company remain competitive.
- The platform is useful for defining proper job descriptions, job levels/bands, and career paths.
My company used PayScale as an extension of our payroll provider services. We utilized it for several HR and compensation-related functions. It was primarily used to collect and analyze job and pay data, ensuring our compensation strategies aligned with market trends.
The platform has been in use for three years, helping our team make informed decisions about salaries and career pathing. By leveraging PayScale, we streamlined processes related to job evaluation, market analysis, and pay equity.
- Some job roles are not available in the system.
- Finding data for roles in specific geographical locations can be challenging.
- The compensation data for some roles occasionally varies significantly from other similar systems, reducing consistency.
- PayScale provides data that is sourced directly from employers, which enhances its reliability.
- I occasionally compared it with other platforms like Salary.com, Indeed.com, and Glassdoor.com to verify data accuracy.
Companies should assess their specific needs for using PayScale and ensure it aligns with their goals. It is particularly beneficial for determining competitive compensation through market benchmarking.
Organizations should also evaluate the cost of the platform compared to other options, factoring in the frequency and purpose of its use. Understanding how the platform integrates with existing payroll or HR systems is another critical consideration.
I have not noticed any significant changes or evolution in the platform during my use.
PayScale is ideal for larger organizations with diverse job functions and various job levels.
PayScale might not be suitable for smaller organizations that can gather job and compensation data from free platforms or search engines.
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.
The frequency of my use depends on business needs and the timing of our compensation processes. During busy periods, I use it almost daily, while during off-cycle periods, I may use it only a few times per month.
I primarily use it for ad hoc pricing, so when we are in a busy hiring season, I price a high volume of roles. I also use it to stay informed about trends in the compensation field, including identifying high-demand jobs.
Additionally, the minimum wage map feature allows me to quickly check wage requirements across different parts of the U.S.
CompAnalyst has a very user-friendly interface. It is simple to navigate and offers a customizable dashboard. The Community section provides a space to connect with other compensation professionals and learn about market trends and educational opportunities. The tool also provides robust market data, allowing me to confidently price roles for my organization.
Our organization was granted access to CompAnalyst by our parent company, which owns several other veterinary care businesses in addition to VCA. It was already in place when I joined the team almost three years ago, and I have been using it since then for market pricing jobs.
CompAnalyst is one of many compensation tools available, and it features an easy-to-learn interface that allows us to quickly perform ad hoc pricing for new and evolving roles within our company. It can be utilized by all of our business units, ensuring consistency in our pricing approach.
Its ease of use and applicability across a wide range of roles make it a valuable tool for our organization.
When comparing multiple jobs, the minus symbol next to each job suggests it can be removed from the comparison, but clicking it does not actually remove the job; instead, I must navigate back and remember which jobs to remove. I wish this process were more streamlined.
The minimum wage map only provides state-level data, but many states, such as California, have multiple minimum wages, so city-level details would be more useful. Similarly, it would be beneficial if state differentials could be viewed at the county or city level instead of just the state level.
CompAnalyst has a better user interface than some other tools I have used. While there are more advanced tools available with additional features, they often complicate navigation and usability. CompAnalyst strikes a balance by offering the essential tools compensation professionals need without overwhelming the user with unnecessary complexity.
Features are a critical consideration, as larger companies with complex compensation processes may require more advanced functionality than those just beginning to develop their pay structures.
Pricing is another important factor, as compensation software can be costly. Reliable customer support is crucial to ensure timely assistance when issues arise. I recommend requesting a demo to assess the tool’s capabilities and evaluating the company's responsiveness.
I cannot speak to changes beyond the past few years, but CompAnalyst provides a feature on its website for users to submit suggestions, and the developers appear to take feedback seriously and implement requested improvements.
CompAnalyst is ideal for users who need reliable, straightforward compensation data presented in an easy-to-use format.
Organizations with highly complex compensation structures that require extensive customization and advanced features may find CompAnalyst too limited for their needs.
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.
