In the realm of compensation management, there’s one tool that seems to be universal: Excel spreadsheets. In them, compensation data is organized, calculated, and just generally wrangled into something workable that can be used practically. But no matter how skilled a user is with Excel, it has its limits when it comes to compensation management.
One of the biggest problems is the huge margin for user error that Excel spreadsheets introduce to the compensation process. Usually there will be a master spreadsheet file into which all of the compensation data needs to be entered and organized. Usually, this process is done manually from files sent to the HR/Comp department from various other sectors of the organization. Human beings, however, are prone to error, and even one misplaced digit can throw off the entire compensation process, requiring a lot of time and effort to root around in the spreadsheet and find where the error is located.
This doesn’t even take into account the massive time investment required to consolidate all of the necessary data into the spreadsheet in the first place. Not only is everything put in piecemeal, but it requires a lot of waiting – waiting for the necessary information to be sent from managers (over unsecured emails), waiting for permission to move up the approval chain. The result of that is a lot of wasted time on the part of the person managing the spreadsheet file.
Not to mention budget considerations. Compensation and merit budget totals will need to be calculated in the spreadsheet software and updated by the user. And while it’s possible to streamline the process somewhat with the use of macros and other Excel wizardry, the process is never fully automated. Not to mention the possibility, again, of errors somewhere along the way.
If you add all of these factors up, you have a recipe for a massive headache and a lengthy compensation process. There is, however, a solution to the problems presented by Excel spreadsheets. The right compensation management tool can fully streamline and automate the compensation process, eliminating chances for errors by updating totals in real-time as data is input directly into the system by managers, eliminating the need to wait for emails or calculate totals. The approval chain is also automated, meaning less time spent waiting on replies and go-aheads. And everything is secure, protecting confidential data from prying eyes.
Excel spreadsheets have served their purpose, as have many other pieces of forgotten technology. But like many other obsolete technologies, it won’t last forever – and it’s days are numbered. It’s important to keep with the times and be on the cutting-edge of compensation technology, lest your company get left behind.