White Paper
THE BUSINESS CASE FOR
COMPENSATION TECHNOLOGY
C
ompensation accounts for nearly 70 percent
of operating expenses for most organizations,1
and is one of the main reasons employees join
and leave organizations. Yet despite the foundational
role compensation plays in any talent strategy, most
organizations continue to manage compensation market
analysis, strategy development and program administration
using spreadsheets.
The perils and pitfalls of handling complex compensation
tasks in spreadsheets are well known:2 spreadsheets are
prone to human error, require a high-level of skill and
expertise to move beyond simple analysis, and are not
a scalable solution across decentralized groups. For this
reason, most discussions on the use of spreadsheets in
compensation and HR focus on productivity loss and risk of
error. However, beyond these important but tactical gains,
the compensation function and the organization at large
have far more to gain by reducing reliance on spreadsheets
than reduced risk and greater efficiency. This paper will
explore the five areas in which organizations can improve
via the adoption of compensation technology solutions:
efficiency, consistency, visibility, transparency and trust.
END GOALS OF COMPENSATION
In the end, the work of the compensation function enables
the organization to accomplish five key goals:
Make the Right Offers
Compensation is one of the top reasons employees join
organizations,3 and a rewards package that isn’t market
competitive can impede a company’s ability to bring in
the talent and skills needed to execute on business goals.
Paying competitively does not necessarily mean offering
the highest salaries in the market, but it does require a deep
understanding of the pay landscape in which the company
operates so organizations that choose to place a lower
emphasis on base salary understand the need to balance this
approach with non-salary rewards.
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