Organizations often employ a specific person to fulfill the critical role of managing pay: a compensation and benefits manager that ensures every employee gets the payment and benefits plans they deserve.
Compensation and benefits roles are crucial for any organization because they oversee a significant portion of the workforce budget.
Let’s go over what exactly these managers do, what skills to look for, and how to become one in this comprehensive guide to compensation and benefits specialists.
What is a compensation and benefits manager?
Compensation and benefits managers are specialists who oversee the proper allocation of employee payment and benefits fulfillment. Considering their purview focus on the human capital of an organization, these managers typically work within the human resources management department.
Compensation and benefits refer to a wide range of subjects. The particulars of any given manager’s duties depend on the organization’s size.
Additionally, the benefits they fulfill sometimes depend on the benefits offered by the organization or the qualified benefits that suit different workforce sectors.
However, compensation and benefits managers generally oversee the proper allocation of payroll and its budget and fulfill employee insurance policies, retirement accounts, and investment portfolios, amongst other benefits programs.
The key responsibilities of a benefits and compensation manager
Because compensation and benefits managers often oversee a wide range of human resource elements, the specifics of their role warrant closer examination. While the specifics vary between organizations or industries, these managers share the same core responsibilities internet to the role.
Here are the critical responsibilities fulfilled by the benefits and compensation manager.
Managing supplier relationships
As the overseer of employee benefits programs, compensation and benefits managers lead the way in maintaining relationships with suppliers. Third-party entities handle health insurance policies and 401k accounts.
Managers seek optimal partners for the organization’s stated benefits programs that maintain open communication channels, ensuring that benefits are accessible for the workers and affordable for the organization.
Research and analyze the market
Compensation and benefits packages are a market unto themselves. Health insurance, life insurance, and other benefits packages have their costs, which fluctuate in a dynamic market environment.
The compensation and benefits manager uses their skills to assess this ever-changing market to find the best options for the organization and the workforce.
Develop the salary structure
Compensation and benefits managers are the primary decision-makers on the organization’s salary structure. Managers are responsible for setting competitive salary packages for talent that attracts top talent to high-value positions. At the same time, managers need to set average salaries across sectors that fit within their budget.
Meeting legal requirements
The Wages and Fair Labor Act outlines the criteria for legal obligations employers have to their employees regarding compensation and pay. These criteria are expansive and overwhelming. The compensation and benefits manager must be familiar with these criteria, ensure that the organization follows them properly, and prevent failures that invite legal action.
Setting the company’s budget
Labor costs often account for up to two-thirds of an organization’s budget, which warrants careful consideration.
Compensation and benefits managers work closely with upper management to create a labor budget that keeps the organization competitive while reducing excessive costs.
Supervise other compensation and benefits specialists
Compensation and benefits managers oversee a significant portion of the organization—it’s a job title that requires problem-solving and communication skills, years of experience, and effort.
Compensation and benefits manager job openings are often only available to specialists working on their behalf to ensure the scope of their program gets adequately fulfilled. Managers must supervise their compensation and benefits specialists properly so that everything runs properly.
Oversee payroll distribution
Hiccups in payment often spiral into a massive headache. When an organization pays dozens to hundreds and even thousands of employees, the proper payment distribution becomes a gigantic undertaking.
Compensation and benefits managers lead the regular distribution of payment, ensuring that every employee in the organization receives their paycheck in full and every single pay period.
10 top skills for a compensation and benefits manager
The responsibilities of a compensation and benefits manager are sometimes demanding. To succeed in this position, managers must develop a skill set aligned with the demands of the position.
Here are the top ten high-value skills compensation and benefits managers must have to take on the role effectively.
1. Resourcefulness
Working as a compensation manager often means using several resources. You sometimes conduct salary surveys, research job types, allocate tasks to specific job roles, and work with the management team to develop more robust compensation programs.
Unsurprisingly, being highly resourceful is critical to success as a compensation manager because this job gets overwhelming without accurate, ongoing information.
2. Communication
A compensation manager must also communicate well, using many different formats.
Writing is one of the top skills a compensation manager uses often. Delivering compensation documents and presentations and working with Human Resource teams to update policies happen often. Work on writing clearly and succinctly about compensation offered by the organization.
3. Negotiation
When a compensation manager walks into executive-level meetings to promote pay raises or benefit changes, they better understand the market data and be a strong negotiator. Salary surveys based on the most current compensation data from competing organizations help in this process.
Negotiating for more attractive compensation helps your organization become a preferred employer, thus gaining top-level talent that enables more innovation and growth.
4. Analytical
What does a compensation manager do with all that data gathered from salary surveys, reports, and other information? They must use strong analytical skills to decide what it means to the business objectives.
Analytical skills often help compensation managers spot trends, conduct succession planning sessions, and push for compensation changes in targeted areas.
5. Delegator
Often, a compensation manager has a team of junior competition managers on board. Therefore, being able to delegate some tasks to those who have the best skills to handle them is a big part of the job.
6. Business-wise
A compensation manager needs to see the bigger picture regarding the types of compensation and benefits offered to employees. Seeing the bigger picture means talking regularly with the recruitment, human resource, and supervisory teams to see what drives performance. Without this vision, compensation plans sometimes fail to meet overall needs.
7. Expertise
Having at least five to ten years in an industry goes a long way toward helping a compensation manager to be successful. However, this metric goes a step further, too: A skilled compensation manager looks for ways to beat the competition with creative compensation and benefits offerings that reel a stronger workforce.
8. Technical
Besides being resourceful, top compensation managers use technology to achieve their goals. Using computerized salary surveys, signing up for industry alerts, and accessing compensation tools are all made possible by cloud-based technology solutions.
9. Organizer
Being a compensation manager takes a lot of work and effort, but none of these traits are enough if you’re not highly organized.
Compensation managers often tap into technology tools to set up an organized system for tracking compensation and benefits data and putting reminders out there for meetings with key decision-makers.
10. Equalizer
When it all comes down to it, the best compensation managers see themselves as the “equalizer” of their organizations. They focus on keeping things fair for employees and the organization to stay profitable. They work with leaders to ensure that they are meeting employees’ needs while focusing on the organization’s future growth and success.
Compensation and benefits management: Salary trends and job outlooks
Compensation and benefits managers oversee the payment plans of an entire organization. But what about the managers themselves—how much do they get paid?
Salaries range for the compensation and benefits manager position, depending primarily on the organization’s size and the industry. However, across sectors, a compensation and benefits manager salary averages $111,000 annually, ranging between $70k to $170k.
Additionally, they receive an average of about 25,0000 dollars a year in extra pay.
There’s good reason to be excited about this position. For one, it’s high-value. As a manager that oversees the budget and makes high-impact decisions, organizations are eager to attract serious talent.
Also, compensation and benefits are an increasingly dynamic part of upper management. They work closely with senior managers while communicating with the rest of the workforce. That means they get a lot of exposure to the organization.
The U.S. Bureau of Labor Statistics reports that the compensation and benefits manager is likely to grow at a modest amount between 2021 to 2031: about 2% each year.
6 steps to become a compensation and benefits manager
Compensation and benefits managers are respected positions reflected in their decent salary and decision-making role. For readers interested in pursuing a career in this field, you must take a few critical steps before getting an interview.
If you follow this progression, you’ll likely land a compensation and benefits manager position.
1. Assess whether the career is right for you
When considering a career as a compensation and benefits manager, the first step is determining whether the career is right for you. While rewarding, this position requires a particular skill set, primarily those mentioned in the article.
If those skills resonate with your existing skill set, you’re eager for a challenge and capable of handling significant levels of responsibility, the compensation and benefits manager position is likely a good fit for you.
2. Study for a bachelor’s degree in HR or a related field
Compensation and benefits managers hold high-impact positions within an organization. That being the case, recruiters want to know that candidates have demonstrable accreditations in the field. For instance, a bachelor’s degree in HR or a similarly related field is necessary. Without a degree in this kind of background, hiring managers will likely reject your CV out of hand.
3. Build work experience in a compensation role
The compensation and benefits manager role is the cap of compensation roles. To demonstrate your capability as a leader in this field, prior work experience in compensation roles is a necessity. Often, managers build up their experience in the field as compensation and benefits specialists work under the manager.
4. Explore a graduate degree
The stronger your educational background, the better equipped you are to take on the compensation and benefits manager role.
A post-grad degree, like an MBA or another relevant master’s degree, indicates that candidates possess a high level of competence in their field. Graduate degrees indicate the candidate is capable, knowledgeable, and a strong fit for the job description.
5. Become certified in compensation and benefits
The more qualifications a candidate has, the better their chance of landing the position. For those pursuing a career in compensation and benefits management, there are plenty of certifications to help you stand out.
Here are a few worth your consideration:
- Certified Professional, Life and Health Insurance Program (CPLHI)
- Certified Employee Benefit Specialist (CEBS)
- Society for Human Resource Management Certified Professional (SHRM-CP)
- International Accredited Business Accountant (IABA)
6. Apply for the compensation and benefits manager position
With a solid educational background, certifications, and work experience in the field, candidates need only apply for available compensation and benefits manager positions.
It’s a long journey, but with the right resources, motivated folks often attain and reach their goals and find fulfillment in this exciting career path.
To learn more about the best compensation practices for your business, check out PayScale’s 2023 Compensation Best Practices Report and develop a more comprehensive compensation plan today!
