Compensation management can be a hassle. On one hand, you want to give your employees the best possible working environment. You value their hard work and job satisfaction, and you want them to feel happy, secure, and successful in their work. On the other hand, compensation management takes a lot of time, money, and (personal investment). You want the focus of your business to be the product or service that you offer, and spending time on compensation management takes resources away from your primary goal.
It’s a tale-as-old-as-time conundrum. The toss-up between being a good employer and a successful business. But… what if this didn’t have to be an issue? How would you feel if there was a way to have the best of both worlds?
Have no fear! Compensation software is here!
It’s the solution to all of these problems. Specifically, here are 5 major ways that compensation software can simplify your life, and that’s just the beginning!
Human error is inevitable. Even if your compensation management personal is some of the best in the business, it is likely that your employees will make mistakes. Filling out spreadsheet after spreadsheet can be daunting, time-consuming, and frankly quite boring. Even with the use of Excel, Google Sheets, or Numbers, there is still a human employee responsible for punching in the data.
Take a second to think about it: how often do you make mistakes? It is incredibly easy to have a type, forget or add a 0, change a 5 to a 6, and those small mistakes add up when it comes to employee compensation. Other than clerical errors, there are numerous other mistakes that individual employees or even business can make, which can cost businesses serious money.
With compensation planning and management software, the risk of error is reduced to 0. Think about it, if there is an automated computer program managing all of these numbers, there is simply no way that can fail. When a program is automated, all of the work relies on a ready-made algorithm, that has proven over and over again to be successful for business.
As of March 1, 2018, the cost for a compensation and benefits manager ranges from $89,080-$120,298 with a median of $104,583. Even if this number seems manageable, compensation costs are only about 69.6% of employee costs, according to the United States Department of Labor. On top of wages and salaries, employers have to pay for benefits, which include paid leave, supplemental pay, insurance, retirement and savings, and taxes or other legal requirements. This doesn’t even include raises or job promotions, which are necessary to retain employees year after year or the cost of more than one person in the compensation department.
Once you look at the numbers, the price of keeping and maintaining compensation personal is increasingly expensive. Compensation software is the answer to these problems. With software, there are no hidden costs, and the price is not going to exponentially increase the longer you use it.
Once again, using compensation software means not having to hire an employee whose only job is to manage employee compensation and management. Instead, the software does all of the work!
This saves an incredible amount of time. With an employment spot opened up, now your business can hire a new sales manager or marketing expert. As a business owner, your time searching for the perfect employee or the time of that compensation employee can now be allocated to something that helps grow your business.
Remember that tale-as-old-as-time conundrum that we were talking about earlier? It is an incredibly stressful experience. No employer wants to be stuck between having the best for your business or the best between your employees. This can be incredibly stressful for employers, who really strive to have an all-around successful business. No one wants to sacrifice employee satisfaction or potential profit.
But, why not have both of them?
Compensation management reduces stress by making employers feel at ease with a fail-proof compensation management plan. Like we’ve said before, reducing the need for a compensation manager saves money, human error, and plenty of time- all of which directly increase potential profit.
Additionally, employees feel secure when they know that they are being fairly compensated for their work. If an employee feels like they do not make enough for the job they are doing, they are going to go somewhere else to find fair compensation. But, using a compensation management tool will help employees feel that they are getting what they deserve because it is all tied to the compensation software algorithm.
It’s a win-win-win situation.
Increase Employee Morale and Success
So far, we know that having software to manage compensation can reduce human error, save time and money, and lower stress but what do all of these things have in common? They actually make your employees happier and more productive!
This is the ultimate key to having a successful business. If your employees are happy in their jobs and satisfied with their salary and benefits, they will produce higher quality work. An article by Fortune states that “being happy at work really makes you more productive.” They found that “productivity increased by an average of 12%, and reached as high as 20%” when employees felt happy at this work.
This study did use showing funny videos as an indicator of happiness, but saving time, money, reducing error, and reducing stress are all things that help employees become happier- I know that it makes me happier!
Good compensation management is crucial to employee happiness, which then increases employee success.
Now, these are just some of the ways that having compensation software can improve your business. It reduces errors, saves time, saves money, lowers stress, and increases employee retention.
Just imagine, an office where errors are rare, less time is wasted, money is used in the most efficient way, and employees are happy; it really does sound perfect.
While of course, no business can be absolutely perfect, compensation management software can get it pretty close.