Important Considerations When Choosing a Compensation Module
One thing remains true in the marketplace of services: people don’t remember how crucial customer service is until they receive a terrible experience with it.
HR software suites, whose scope and complexity have only grown over the years, are cornerstone components for many mid to enterprise-sized organizations. Despite being so important, the service elements of these suites are often ignored until they are faced. HR specialists don’t realize how much they detest calling a support center until they have to dial into one during a busy compensation planning cycle.
So why do so many customers focus on the capabilities of these services working at their best and disregard what happens when they trip, break, or don’t work at all?
We posit that a good HR system is not only effective at its best but quick to recover at its worst. And the key to resolving issues, we often find, is a comprehensive, strong customer service system.
Here are some important considerations to account for when looking at compensation planning in an HR software suite.
Disruptive Technology or Disrupting Technology?
When compensation functions are included under the umbrella of an HR suite, their tech support staff are often trained on how to assist with issues that affect the total package.
However, the severity and complexity of issues vary from system to system.
Take recruiting functions, for example. If an issue occurs with using recruiting software, one may get away with saying, “Well, we can address that in our maintenance release scheduled for next quarter.” There are often ways to mitigate and bypass gaps in these sorts of systems or do without features for a limited amount of time.
Alternatively, when a customer faces an unresolved issue in the middle of their compensation planning process, the effect is immediate and widespread. A company facing issues with pay may not be able to get hundreds, thousands, or tens of thousands of pay increases planned in time for payroll deadlines. An inability to corroborate and share manager recommendations leads not just to technical gaps, but massive gaps in knowledge.
If you read our earlier piece about the Golden Ratio of Compensation, you may remember that comp software follows a 100/0 rule – whereas some HR functions like recruiting can get by with 80% efficiency, compensation solutions must be able to perform 100% of the tasks required in order to be sustainable.
When compensation platforms aren’t flexible enough to support incentive strategies, comp planners may have to settle for extensive manual processes like Excel to fill the gap. As more organizations realize that compensation planning works best as a technology-enabled process, they’re also learning more about the pitfalls of partial solutions and more so the far-reaching effects of even small critical failures.
Time Is of the Essence for HR
Another case to consider is how hardware usage for compensation planning systems differs greatly from other systems in the HR ecosystem.
Consider recruiting systems. They have a relatively continuous and predictable usage pattern. Performance management systems fall somewhere in between, with the major peak generally coming at the end of the review cycle. Employee training systems are dependent on when an organization is hiring, but many organizations hire continuously or in batches rather than in one year-end surge.
Compensation planning is like a bear in hibernation. It may sit relatively quiet and docile for 9+ months of the year, but then, in a frantic 4-12 week period, hundreds or thousands of managers awaken in a flurry of activity to madly enter increases and bonuses, approve lower-level manager recommendations, re-do recommendations to meet budgets and send the results up to their payroll system and print compensation statements.
This is not to say that comp planners are asleep on the job for three-quarters of the year. Rather, these HR specialists are working, planning, goal-setting, and maintaining systems. But during that crucial comp cycle, these managers must devour – not salmon from a river, but vast amounts of bandwidth and data.
Comp planning processes take an enormous amount of energy, not just mentally, but computationally. Sending spreadsheets, adjusting recommendations, and trading results up and down manager approval lines all take bandwidth that relies on the stability of servers to power these processes. If a vendor lumps multiple customers on a single set of servers, then you, along with everyone else on those servers, will need to do some sharing. If you do your planning in October/November (as the vast majority of organizations do), then be prepared for painfully slow response times that will hamper crucial processes.
Compare this scenario to other systems within the HR suite. Recruiting systems have a much more continuous and predictable usage pattern. Performance management systems fall somewhere in between, with the major peak generally coming at the end of the review cycle. Employee training systems are dependent on when an organization is hiring, but many organizations hire continuously or in batches rather than in one year-end surge.
Compensation’s timeframe is mission-critical and unlike other systems, many organizations do their planning around the same time of the year. For these reasons, you want to know that the vendor you choose understands the compensation business model needed to support this type of application with this type of usage.
As a case in point, the largest players in the recruiting and performance management spaces have avoided bringing Learning Management into their offerings for many of these same reasons. The irony is that Learning Management Systems (LMS) have been identified as one of the key pillars in the Talent Management suite as it represents the lion’s share of the development side of the equation. Yet, there is much reluctance to get into this space by suite vendors because of the level of expertise needed and the volatility of the revenue model.
The Importance of Named Account Support
Organizations handle compensation very differently depending on their size, industry, corporate values, and shifting elements like laws and market conditions. Comp processes, in particular, can be completely upended by a change in leadership or senior management or a change in the economy or marketplace.
As such, processes are unique to each organization based on both its own internal ruleset as well as external factors.
When a process as vital as compensation can change so rapidly, HR must have the agility to adapt to changing circumstances.
Likewise, HR needs a support system that understands their goals and needs. In the case of a general or ticketed support system, comp planners can be waiting minutes, hours, or days for a resolution to their issues. General customer support can feel like waiting in line at the doctor, not knowing if you’ll get a shot in the arm or told to sleep things off – knowing that you have deadlines due right after you leave the office.
With a more responsive system such as named account support, HR can not only have a faster and more comprehensive support system, but a point of contact that comes to understand their values, needs, and objectives, even as they evolve over periods of time. An agile comp system demands equally agile service in the form of representatives that understand how the platform can accommodate all types of compensation work. Knowing who your doctor is – and understanding how you two align on goals and values – gives you a greater sense of care and relief when you have to make a visit.
Questions to Ask When Choosing Compensation Software
Compensation planning, more than any other aspect of HR, needs to have comprehensive support in order to address potential issues and problems. This is not to say that compensation should be excluded entirely from an HR software suite, but special interest should be given to identifying vendors that provide swift and thorough support in this area.
When pursuing a compensation management software solution, here are some questions to ask yourself:
- When you have a support need in the middle of a focal cycle, will you get a random call center employee or a named account manager already familiar with your configurations?
- If a persistent issue costs you a week of administration time during a busy cycle, can you still fulfill your obligations?
- What is the emotional toll your staff suffers from running into obstructions and issues that cause frustrations?
- How much productivity is lost through slow load times and server-side issues?
These questions will lead you to make an informed decision about what compensation planning platform is right for you.
CompensationXL is the flexible compensation planning solution for merit, bonus, long term awards, and total reward statements, enabling mid- to large-size organizations to implement competitive pay structures such as vested stock options and variable incentive pay.