It’s time to talk about money!
Cold, hard cash. Or something like that.
Incentives. Variable pay. Not payroll, but just about any other way to reward, with money, your employees.
Incentives is a bit of a crowded space. According to a variable pay HR expert we recommend, the average company will spend from fifteen to fifty percent of their compensation on variable pay.
What is variable pay? Good question. Variable pay is the term that includes bonuses, profit share, commissions, spiffs, and anything else you would consider performance-based pay (outside of normal payroll).
You can get this type of software from SAP and IBM and other massive players. But if you are a small company you likely won’t have the budget to pay for those huge systems.
Because of our (Snowfly’s) customers’ needs, we have developed an entire suite of variable pay and incentives systems that are completely catered to the SMB market.
In a conversation with our HR partner, he said these payment programs are not “administratively feasible. You can’t do this with a spreadsheet. You have to make this as hands off as possible.”
Wait… so.. turns out you can do this with a spreadsheet, and a full-time employee. But there are so many points of failure, and the expectations of getting paid correctly and timely are so high that relying on a manual system with someone who might want to take vacation, or a sick day, or heaven forbid make a mistake, just doesn’t make sense.
If that describes your company situation CALL US RIGHT NOW. Seriously.
Check out this line from a job posting online for a commission and incentives compensation analyst (the posting, not sure how long it will be live):
“Proactively resolve commission disputes within the Commissions System with high accuracy in a timely manner”
Oh man, that stresses me out just reading about it. I can imagine a salesperson waiting at my desk wondering why their check is wrong… and I need to fix it “in a timely manner.” To them that means YESTERDAY.
Was the problem a simple mistake by someone who touched or approved the numbers? Stress.
The second bullet point also says “… to resolve commission disputes.”
Oh look, the third line also includes “to resolve commission disputes.”
The fourth line says “… to analyze commission dispute month over month variances”
Is this a mediator role, or an analyst role??
If your job description includes those, plus “Create commission summary reports and other reports to…” and “Research commission variances” and “Track and ensure system defects”
The Glassdoor estimate for that job is $44k to $81k/year. We can all agree how horrible that job would be for $44k/year. Whoever is paid $81k/year would likely focus on creating systems and processes to decrease the disputes and automate the reports.
We can only hope.
Seriously, though, variable pay can be tricky. Rules, triggers, systems, auditing, etc. Mistakes against an employee can be serious and result in less trust and your star employees walking away. Mistakes that favor your employees might go unseen (by both employer and employee) and result in higher and unnecessary costs.
If your compensation model includes incentives, bonus, commissions, Per Diem, EWA (earned wage access), or any other type of variable pay, call us. Especially if you are in the under-served small to medium business space. We are here for you. We have a solution that might automated this tricky and sensitive part of your business.
If your employees or contractors expect compensation daily, we can help you in ways you might not have ever dreamed of. We can automate your compensation headache away!
Here’s our contact page… we can’t wait to hear what your needs are!