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How to Evaluate Compensation Management Software

Jen Dewar
May 13, 2021 7:00:00 AM

The right compensation management software can help you make compensation your competitive advantage. It can give you instant insights into total employee compensation, so you can see how you’re using your organization’s single biggest operating expense. It can let you forecast salary changes and see market trends in real-time. It can take the stress out of compensation review cycles for stakeholders, and help create an overall better employee experience for everyone. And it can do all of this in one place, without spreadsheets or subpar all-in-one software.

If you’re ready to evaluate compensation management software, here’s how you can get started.

Consider your strategic priorities and needs

The first step in evaluating compensation management software is to consider your organization’s strategic priorities and needs. Rope in key stakeholders to discuss your must-have requirements in a new compensation platform, and any additional nice-to-haves.

For example, you may want to:

  • Provide a better experience for your stakeholders during regular review cycles.
  • Prioritize pay equity within your organization. 
  • Access better compensation analytics to use your budget most effectively.
  • Support your remote compensation strategy.
  • Create a better employee experience around compensation and improve retention.

Rank each of these focus areas so your evaluation team knows what to focus on. This exercise will help you compare different compensation management software options against the same criteria, so you may choose the best fit for your organization.

See the software in action

Run some web searches and collaborate with peers to build a list of solutions you’d like to evaluate. Schedule a preliminary demo with your desired vendors to determine whether they meet your requirements, and take note of their strengths and weaknesses as they relate to your needs. 

Then, choose two or three solutions for in-depth demos with additional internal stakeholders. These may include power users in HR and Finance, company leaders, or line managers, so you can evaluate the software from multiple perspectives.

Come prepared with an evaluation checklist to ensure you cover all your questions. For instance:

  • Features. Ask specifically how the product can address your strategic priorities and needs, and see them in action.
  • User experience. Take note of the user experience for power users in HR and Finance, as well as anyone else who will be using the tool (such as company leaders and line managers during review cycles).
  • Integrations. Learn how the product works with your existing HR tech stack, including your HRIS and performance management system.
  • Implementation. Ask about the implementation process and timeline. You will want to make sure it won’t impact any upcoming review cycles.

Speak with customer references

Before making a final decision, you may want to speak with a customer reference to get feedback from a current user. Ideally, speak with someone from a company similar in size to yours to get a feel for how the solution would work within your own organization.

Some questions you might want to ask include:

  • Why did you select this vendor?
  • How well has this solution met your expectations and requirements?
  • What are the biggest benefits you’ve realized since using this solution?
  • Where could this platform improve?
  • Do you use this platform to help with [strategic priority]?
  • What feedback have you received from your end users?
  • What did the implementation process look like, and how long did it take?
  • How do you find the quality of support?
  • Would you select this vendor again?
  • Is there anything else you could share to help us make this decision?

Final thoughts on evaluating compensation management software

The right compensation management software can vary by organization. Keep your strategic priorities in mind throughout the evaluation process to ensure you find a solution that meets your needs now—and in the future. 

Not only that, but make sure the solution you choose will work for all of your internal customers. Siloed data, clunky all-in-one software, and outdated spreadsheets make the complex world of compensation even more challenging to handle. Make compensation your strategic advantage by investing in a solution that will improve the experience for everyone.

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