What does Salary management system Do?
A salary management system is an essential component of talent management and employee retention.
It's about using financial and non-pecuniary benefits to drive hires, reduce employee turnover, boost performance, and foster employee engagement.
It is also necessary to ensure that wages and bonuses remain competitive and that benefit programs evolve with the needs of the workforce. People in this field not only manipulate data, but also need to understand the intricacies of benefit administration.
Salary management system Software
Most human capital management suites include salary management software. They are used to budget the salaries of the employees and provide information on the evolution of the salary according to the position. The human resources department is responsible for managing the salary management system, but company managers also have access to them.
These software are typically configured to give managers in each department an overview of employee data, allowing them to offer salaries, grant raises, and award bonuses. Thus, the performance management data of an employee can be displayed along with the compensation related information.
Benefits of a salary management system
One of the main advantages of salary management system systems is to ensure the competitiveness of wages. Market-relevant compensation data provides hiring managers with critical information when making an offer to a candidate. This factor is also true for increases and bonuses granted to existing staff. Today, employees have the opportunity to know the salaries and benefits received by their peers. A good salary management system follows market trends, which helps motivate employees and limit turnover.
The salary management system requires the use of external data. Executives collect salary data by industry, company size, job type and geographic location. This allows them to rely on government data, leverage information from public sites that collect salary data submitted by internet users, as well as purchase data from third-party companies that regularly survey salaries and benefits.
The value of a pay analysis for wage setting is currently debated. Patty McCord, former director of human resources at Netflix, said in a recent Harvard Business Review article that compensation analysis is based on the historical value of the results produced by employees rather than their future potential to add value. According to her, a benchmarking may be of interest, but companies should instead focus their salary assessment on an employee's potential.
Well-paid professionals in the field of a salary management system
In small businesses, it is often the human resources managers who also take on the role of compensation manager. But, in general, the salary management system is a separate function. Almost 16,000 people in the United States work as compensation managers, and that number is growing by about 5% per year. People in the lower echelons of the salary management system (typically analysts and specialists) earn a median salary of about $ 62,000.
The International Foundation of Employee Benefit Plans, an association of professionals in the field of compensation and benefits, claims 33,000 members.
Changing landscape in terms of benefits
Benefits are an important part of a company's salary management system program. The administration of benefits requires keeping abreast of changes in legislation at local and national level, but also of market trends. Well-being incentive programs, in particular, are on the rise. Therefore, the salary management system must be flexible enough to allow for the inclusion of new types of benefits and the modification of existing benefits.
For example, some corporate wellness programs provide employees with activity-tracking smartwatches, such as the Apple Watch, for free or at a reduced price, as long as they meet fitness goals. Watch data, such as daily steps count, is collected, and if an employee does not achieve the goal, they may have to pay for the watch out of their pocket fully. Some programs offer employer-sponsored DNA testing.
Many other benefit programs are available, such as flexible working hours or gradual return to work for new parents. In the latter case, it may be to resume part-time to start. Some companies offer reimbursement for consultations with adoption or geriatric counselors.
