The most popular request that OutSail has received over the last few months has been for compensation management tools. Companies are highly focused on making sure they are paying the right amount to keep the right employees. There are a few reasons that this topic has taken center stage:
- Tight Labor Market - At the end of 2010 there were 6 applicants for every open job in the US. Today, there are 0.6 applicants. The market has very quickly shifted from one where applicants are desperate for a job, to one where candidates dictate terms.
- Great Resignation - The last 16 months have seen unprecedented job switching in the US economy as employees are taking advantage of their newfound leverage to find more flexible or higher paying opportunities.
- Inflation - US inflation is at 8%, the highest rate in 40 years. Employees who receive a 3% raise during 8% inflation are actually taking a 5% pay cut. Many employees know this and are demanding raises that keep up with inflation.
Because of these three trends, companies are needing to quickly re-assess their compensation practices. The market data that companies were using two years ago is hopelessly outdated now. And allowing managers to give one-off raises to their teams without proper structure will lead to inconsistency and skyrocketing costs. Another consideration to keep-in-mind is the likelihood of a recession on the horizon. Companies have to balance keeping great talent around with being careful not to hand out too many raises heading into an economic slowdown. In order to properly manage a comp review process, companies need:
- Compensation management tools that allow them to run a fair, well-communicated and budget-conscious review cycle
- Compensation data that is capable of keeping up in this rapidly changing inflationary market
Most companies are finding these solutions with separate providers, but increasingly there are platforms that can manage comp cycles and provide up-to-date comp data.
These are the nine best software platforms for compensation management today:
Comp Data Platforms
PayScale has become a market leader in the compensation space due to their robust data set and powerful compensation management tool. The PayScale data is acquired via multiple channels and is capable of being supplemented with other sources too. Once the data is accessible, they provide a strong modeling tool that enables compensation managers to run multiple scenarios and determine their best outcome. Additionally, the PayScale customer support team gets some of the highest ratings in the industry. Due to the self-reported nature of some of their data and the changing nature of job titles, there can be some roles where the data is not very useful.
Salary.com provides an all-in-one compensation management system to small-to-medium sized businesses. Because of this, their price point is a bit lower and their data is more relevant to mid-market clients. Additionally, their data quality has improved over the past few years with the acquisition of Compdata in 2018. The platform is fairly easy to implement, but once up and running, some users have found it to be a bit more manual than expected, especially within the job description manager
Comp Management Platforms
Compright is one of the simplest and most intuitive compensation management platforms on the market. They are highly focused on being a best-in-class comp management tool, and aren’t expanding into other areas (performance, surveys, learning) like many of their peers. The platform allows for a high degree of configuration and can automate smart recommendations. Their team also gets strong reviews for their integration builds and customer support. The platform doesn’t have a high degree of predictive analytics, but can meet most organizations reporting needs. Additionally, they are one of the smaller teams on this report.
HRSoft offers best-in-class comp management functionality for businesses that have complex compensation requirements. Their system can integrate with most of the leading enterprise HRIS systems and is often proactively brought in by those vendors when their compensation module cannot meet a client’s requirements. The HRSoft team is great to work with and their solution is highly capable, but it is more expensive than some peers and doesn’t offer the sleekest user interface.
Compport is an up-and-coming leader in the compensation management space. Their platform can support the entire scope of comp plans and provides a very flexible plan building tool that an allow all organizations to automate their comp cycles. Compport’s technology continues to evolve quickly and they’ve recently added some employee engagement tools that can add another layer of insight to their robust analytics tools. Some users find the platform to have a very high learning curve, however. And much of the support team is based out of India.
ChartHop offers a best-in-class people planning tool for mid-sized companies. Syncing data from all of your various point solutions is just step one. Once that data is live, ChartHop then allows for dynamic planning, org restructure and re-designs and comp management cycles to take place using real-time employee data. The sandbox environment gives admins the ability to build multiple scenarios and run them by other stakeholders. ChartHop also recently announced engagement and performance tools too.
Comp Data + Comp Management Platforms
Kamsa offers a hybrid approach that marries the best of Radford’s tech industry comp data and consulting experience, with the ease-of-use of PayScale/Payfactors’ technology platform. Kamsa offers some innovative features such as their machine learning-powered job title matching, as well as some unique ways to cross cut data. In addition to the technology and comp data, Kamsa will also provide consulting hours that can help companies build a compensation philosophy. Kamsa is a recent graduate of Google’s accelerator program, so it is viewed as a highly promising start-up, but some start-up challenges are to be expected along the way, including some product limitations early on.
Pave is an up-and-coming contender in the compensation data and comp management space. They pull their data directly from HRIS and cap tables which makes it accurate and up-to-date and their system does a great job of modeling this data so that employees can better understand their total comp picture. Pave integrates with many leading HRIS and cap table platforms today and is a secure platform. They are still a young company, however, so there may be some limitations with their comp management tools and also some industries where their data isn’t as robust
Welcome has taken a very novel approach to the comp data problem by focusing on the offer letter. Welcome has helped leading companies improve their offer accept rate by giving prospective employees a better understanding of their total comp package. This also allows Welcome to capture real-time salary information. The platform’s data is only as good as the industries they operate in today (heavily concentrated in tech) and isn’t suited for running full comp review processes yet.