Taken by itself, currency conversion may seem like an innocuous prospect. As it only takes a simple calculation to convert one currency into another, the process may seem straightforward enough. Like any other task, however, as the numbers and types of variables increase, so too does the difficulty. So when you’re suddenly faced with multiple conversions in and out of multiple currencies for multiple managers, what started out as simple calculations can quickly spiral out of control. A salary planning tool can help make conversions more manageable by instantly performing conversions behind the scenes and allowing managers and those responsible for compensation to plan in multiple currencies quickly and effectively.
Whether an organization operates in two different countries or twenty, managing separate currencies in a spreadsheet program makes the compensation planning process needlessly difficult by requiring someone to convert salary data into and out of different currencies. Not only is this process time-consuming up front, it can also cause complications further down the road. The more separate currencies and conversions someone is responsible for keeping track of, the more susceptible they are to making an input error or some other mistake. This means combing through masses of data trying to find the exact spot where the error was made, wasting even more of that organization’s valuable time.
Another aspect that spreadsheets can’t account for are the managers, and their own personal preference in regards to salary planning. If a manager has direct reports in multiple countries, managing salary data in a simple spreadsheet would mean needing constant adjustments and conversions. Furthermore, a spreadsheet would make the process static, forcing managers to go about planning on an individual or country-specific basis. All of these separate variables would have to be sent piecemeal to their organization’s HR or Compensation department, who would then have to re-organize and tweak it in order to update their main Comp spreadsheet.
Using a salary planning tool, on the other hand, eliminates these problems. All of the necessary calculations or conversions are done behind-the-scenes, allowing users to instantly switch between currencies and have them update in real-time. If, for example, an organization’s merit pool is calculated in USD, and they have an employee whose salary is paid in Euros, they can input and tweak the salary in Euros with the merit pool automatically updating with the proper conversion completed immediately. This also eliminates the chance of errors made during the conversion process, saving valuable time.
The ability to switch between currencies on-the-fly also makes it easier for managers to plan their direct reports’ salaries how they’d like to, whether they prefer to plan in their local currency or in any other currency they choose. And when this data is inputted into the salary planning tool the HR or Compensation department can view and plan salaries in any currency they’d like, with the amounts updating dynamically as they switch between various currencies. This also means that if conversion rates change at some point during the planning process the proper adjustments can be made instantly without having to go through and perform all of the necessary conversions over again.
Instead of being constrained by endless calculations and considerations, a salary planning tool enables you to view your data on your terms. All of the necessary information is updated behind the scenes, allowing data to be updated and viewed dynamically, demystifying the planning process. The end result is less time wasted on conversions, less chance for errors, and less headache.