Accurate and on time compensation is very crucial for talent retention. Compensation professionals often work late into the night during compensation planning season, struggling with old outdated tools or spreadsheets to update the data and track compensation processes. This process is not only time consuming and labor intensive but also fraught with errors.
Although there have been many advances in HR technology that allow companies to fully automate the compensation planning process, many companies still stick to the old Excel spreadsheets because they think spreadsheets are the easiest and most inexpensive solution. How inexpensive it is when you lose money year after year due to a single error in a single cell that leads to overpayment? How much time is lost by managers and the HR department constantly updating spreadsheets?
The manual process of using spreadsheets for compensation planning is very complicated. A single spreadsheet file is created by dumping basic data from the employee database and then broken down into pieces and sent around the entire company to each manager for auditing and updating. Each manager then updates the files and sends them back to the HR professional who then updates all the information back into the system.
Automating the compensation planning process with an integrated compensation management system allows for accurate and timely compensation planning without the risk of human errors. This automation allows for compensation planning on a decentralized level while still maintaining oversight on corporate level. Plus, it maintains confidentiality and prevents confidential data from being exposed in spreadsheets and scattered around the company.
Spreadsheets may seem like the easiest, cheapest way to handle compensation planning, but when you add up all the hours spent by both HR and managers, moving to an online system proves to be the smartest return on your investment.