Excel has long been the go-to platform for managing compensation. After all, it’s free, available on almost every computer, and familiar to most people. It’s even how most of us comp professionals learn the basics of market pricing. But just because you learn to ride a bike with training wheels doesn’t mean you need to keep doing so. At a time when compensation is highly visible and vital to how businesses attract and retain their talent, companies must move beyond the limited, error-prone capabilities of Excel and adopt the strategies and solutions that deliver a modern, more efficient approach.
One of the biggest challenges around using Excel lies in consistency, or rather the lack thereof. When relying on spreadsheets to perform complex compensation calculations, mistakes are likely to be made. Multiple people can enter data differently, and any changes or discrepancies can unwittingly change dollar values. Even if it’s just off by a fraction, that can lead to significantly overpaying or underpaying your teams. And what happens if your comp person leaves the organization? You could potentially have months of comp reporting not being done, leaving huge gaps for your next comp professional to try to figure out.
Another reason Excel isn’t the answer is that it can open your company up to compliance risks. When the newest FLSA regulations go into effect in a few months, any potential miscalculation in employee earnings can result in potential back pay or unnecessarily paying for overtime. Employees you thought were exempt may become non-exempt, and if using Excel, you might never know you have an issue.
The shortcomings of relying on Excel for complex comp calculations don’t end there. What happens when you need to make a presentation to company leadership? Unless you double as a graphic designer (and which busy comp professional has the time do to that?), you’re likely limited to putting a spreadsheet in front of people who might not be too savvy in deciphering compensation data.
If Excel Isn’t the Answer, What Is?
As compensation becomes more complex and visible, your organization needs a solution that can automate key processes and provide the simplicity and consistency that Excel can’t deliver. Comp professionals often get bogged down in their spreadsheets – looking up formulas, making sure everything is up to date and essentially being data managers – rather than displaying their true expertise as a strategic business partner. With a technology-based solution, comp professionals can then focus on more impactful initiatives like proposing new, competitive pay structures or developing bonus programs to keep current employees engaged.
Salary.com’s CompAnalyst solution remedies these issues. We offer a cloud-based platform that makes it simple to manage salary surveys and market pricings, and also provide compensation analytics of internal pay practices against market rates to easily understand your company’s pay competitiveness and internal equity. With pre-configured and customized reporting, users can get instant visualizations of their data. This helps to uncover any potential risks and make the necessary adjustments, while also being able to present compensation data in a more digestible way. And through a new mobile app, comp professionals can pull up data anytime, anywhere, giving them access to crucial information whenever and wherever they need it.
Making the Case for a New Solution
Still, adopting a solution like CompAnalyst might not be easy for every comp department. Historically, the compensation function is usually the last in a business to get money for new tools or technology.
Since compensation is not directly tied to revenue, it can be difficult to get the investment the department needs to stay on top of the latest trends. Instead of tying it directly to revenue, making the case for a compensation solution should be about protecting the organization. You can start by demonstrating the risks that can happen if it continues to rely on spreadsheets, and the financial impact on the company for non-compliance, which can be in the $100,000’s.
Comp professionals can also show the limitations of continuing to rely on Excel, highlighting the list of challenges that make determining appropriate pay levels difficult. In the end, the goal is to attract new talent and keep current top performers motivated and engaged. Without a sound pay philosophy, the business will struggle to find and retain qualified talent, leading to further challenges down the road.For today’s comp professionals tasked with developing fair and competitive pay practices, performing their key tasks on outdated technology will no longer cut it. At a time filled with steep competition for the best talent, poor employee engagement and growing industry regulations, comp teams need a solution that can adapt to their most pressing demands and streamline their day-to-day tasks. It’s almost 2017, and now many comp professionals can attest – Excel is not the answer.