CompLogix Blog

Is it Time to Replace Excel with a Compensation Management System?

If your organization is using Microsoft Excel or a similar spreadsheet solution to manage your employees’ compensation and benefits, you aren’t alone. Generally speaking, Excel is the go-to-platform for many small businesses. It’s widely available in the Microsoft Office suite of products (that you have likely already purchased) and, in certain circumstances, using a spreadsheet to manage compensation and benefits can make good business sense.

In fact, many HR professionals start out managing compensation and benefits by spreadsheet; but, like most basic applications, Excel isn’t really designed to serve as a long-term comp management tool. More specifically, it can’t effectively accommodate the continual change that a growing company must go through in order to succeed.

Limitations of Spreadsheets

One of the most limiting features of using Excel or a similar spreadsheet solution for compensation management is found in its very structure and the way data must be manually added. The data that ends up in a spreadsheet is inherently susceptible to becoming inaccurate with one misplaced comma, fat-fingered character, or hastily applied formula. A one character error in one spreadsheet can quickly infiltrate any number of linked sheets and cause serious downstream consequences. Overpaying or underpaying employees, incorrect incentive payment calculations and other issues that result can seriously erode employee confidence, which in turn impacts morale and even retention.

Another limitation of using a home-grown spreadsheet solution to manage compensation happens when the person who built it decides to leave the company. There will be a long learning curve involved for any new HR professional that has to inspect each sheet line by line to understand how the sheet is set up, where it links and how outputs are affected. Not only does this place a lot of stress on your new hire, it also stands to impact the timeless of essential reports and even distribution of compensation, which is never well-received by employees who are expecting a paycheck or expense reimbursement on time.

Spreadsheets were never designed to be robust compensation management systems. They are only as accurate as the data being added to them and the competence of the human who is responsible for creating repeatable processes to ensure employees are paid fairly, on time and accurately.

A growing company can quickly start to accumulate an increasing number of spreadsheets to keep up with the volume of added benefits, incentives and regular payroll needs. Without a robust technology system in place to bring it all together, validate data points and automate processes, the time it takes to accurately manage compensation for employees becomes a vicious, unrelenting exercise in futility. The toll taken is apparent on not only your employees who become frustrated with unprofessional management of their important benefits and pay, but also on the team of people you have hired to administer them. 

The Right Tool for the Job

wrong tool for jobWhile Excel is a good short-term solution, using it on a long-term basis for compensation management and planning can create some unique business challenges that lead to decreased employee satisfaction, inability to recruit and retain top talent, and even financial losses caused by inaccuracies, inefficiencies or manual errors.

We like to think of it as having the right tool for the job. Imagine trying to build a house with a simple hammer and nails. While those tools may be sufficient to construct a small bird house, when it’s time to build a two-story office building, it is going to require a few more power tools. In this case, those power tools can be found in a robust, cloud-based compensation management system, like CompLogix.

Instilling a reliable and competent approach to managing your employees’ compensation goes a long way toward making sure all your employees are satisfied. With CompLogix, your staff will have time to focus on keeping your employees’s benefits well managed and compensation handled accurately and on time. That leaves more time for researching new incentive programs, locating and recruiting the best talent, and responding quicker to current employees’ questions or concerns.

Is Your Company at a Competitive Disadvantage?

Once your business has reached a certain size, keeping a spreadsheet-based compensation system can create a competitive disadvantage. Exposure to errors, compliance risks and reporting inconsistencies are inevitable as your business needs become more complex. Excel will not keep up. It wasn’t designed to keep up.

CompLogix’s configurable solutions help your team pinpoint errors before they happen, stay on top of industry salary trends, and allow for the kind of pay equity and transparency that today’s employees expect. Attracting new talent and keeping top performers depends on it. Excel simply cannot automate critical processes or provide the consistency needed to support your growing HR responsibilities around compensation management and planning.

Is it time for your organization to move beyond spreadsheets? It’s time to contact CompLogix.

See for Yourself

Ready to learn how CompLogix software suite can help you to work smarter?