Excessive admin, pay inequity, below competitive pay, and non-compliance—these are all risks associated with outdated compensation management operations. Yet, many enterprise organizations today still rely heavily on Excel or other spreadsheet tools for compensation-related tasks. They may be unaware of the profound benefits of switching to purpose-built compensation software that could help them design, model, and manage pay and reward programs with advanced analytics and planning tools—all via a single, unified platform.

Making the change can seem intimidating at first. You may be worried about the time and effort setting up new software could require. Over the long term, however, the advantages are well worth it. Below, we’ve laid out the key distinctions between Excel and compensation software as well as the advantages of elevating your strategy with a compensation platform.

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The Challenges Spreadsheets Present and Why You Need Compensation Software Instead

According to McKinsey, the world’s top companies report higher adoption rates of advanced technologies. However, so many organizations still rely too heavily on Excel for critical compensation planning tasks. Larger organizations with intricate pay structures across multiple regions and currencies need more sophisticated solutions. While spreadsheet tools will always have a place in any team, overreliance on these tools can cause numerous problems.

Let’s explore four of the issues below.

1) Exacerbated Time Constraints

Manual data input in Excel is time-consuming. Keeping track of updated pay policies, new hires, promotions, or compliance requirements means even more hours tracking, typing, and updating information.

When you use Excel, you’re also likely to rely on spreadsheet formulas, which can be useful for saving time and avoiding human error. However, it may take time for newer colleagues to get comfortable with formulas, which can cause bottlenecks and put unnecessary time constraints on the wider team.

Why Compensation Software Does It Better

With platforms like PeopleFluent Compensation, you eliminate the bulk of manual entry. The software integrates with HR systems, allowing seamless data import and export. You can easily use AI to validate and correct formulas across your compensation tasks too.

This flexibility frees up your team from tedious administrative work. It also supports consistent, up-to-date compensation records—a crucial factor to keep your compensation strategy future-ready.

Access to ready-to-use templates—for salary, bonus, stock, total rewards, and more—ensures your teams follow best practices, even as your compensation strategy evolves.

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2) More Errors and Inaccurate Planning

Checking for errors is also particularly time-intensive in Excel. The only built-in alerts Excel has are when formulas aren’t entered or working correctly. When you’re not alerted to unusual or unexpected data in your spreadsheet, you have no choice but to meticulously rely on manually reviewing rows and rows of data.

This makes quality control exceedingly difficult and forces you to rely on implicit team dynamics rather than having peace of mind that the software itself will support a sensible and thorough quality assurance process.

Should you make a mistake during your manual data input, you won’t be able to plan accurate and realistic compensation scenarios for your total rewards program.

Why Compensation Software Does It Better

There’s no need to put up with a stressful, error-prone process that hampers your strategic planning. PeopleFluent provides:

• Admin-definable controls that allow you to grant review access to the right stakeholders at the right time.
• Alerts when the wrong information is entered, so you can address potential errors before finalizing compensation decisions.
• Complete, roles-based visibility so you have the information you need to plan accurately.
• Advanced configurability that supports complex compensation calculations, built on multiple layers of scripting logic and user-defined fields at both the plan and reward cycle level. This helps you understand how compensation decisions will impact your wider organization.

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3) Slow, Time-Consuming Reporting

Excel does offer the capability to produce basic graphs, but it's up to the user to manually create these. This makes it difficult to communicate with stakeholders outside of your own team. Getting all your stakeholders on board then becomes a matter of translating complex spreadsheet information into intuitive graphs and figures.

Why Compensation Software Does It Better

PeopleFluent includes out-the-box templates for numerous standard and custom reports, pulling data from a variety of relevant sources to save you hours of manual work. You can access unlimited plan designs, measures, statements, and worksheets—all customizable to fit your needs. With advanced compensation analytics, you gain deep insights into pay trends, compa-ratios, salary gaps, and more—empowering you to share the right information with stakeholders, so your organization can continuously improve your compensation strategy.

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4) Lack of Integration With HR Software

Apart from the obvious administrative burden that manually entering data from your HR sources creates, a lack of HR integration also results in minimal real-time visibility. Each time an employee transfers roles, receives an award, or there’s a policy change, you’re forced to update spreadsheets by hand. This introduces the risk of errors and can slow down compensation planning cycles.

Why Compensation Software Does It Better

A purpose-built solution like PeopleFluent Compensation integrates with your HR systems for real-time updates that support strategic, data-driven decision-making.

PeopleFluent allows you to create comprehensive total compensation worksheets that reference fields from salaries, incentives, and stocks. This helps you make informed compensation decisions—with the right information at your fingertips at all times, you and your stakeholders can collaborate efficiently to keep compensation in line with business goals.