With today’s mobile job market, many businesses are becoming more worried about attracting and retaining employees. In a 2021 Gartner Poll, 60% of executive leaders described themselves as “significantly concerned about employee turnover.”
These concerns are warranted, as the same poll found that 56% of employees had applied for jobs outside their existing career path within the past year. Based on these alarming trends, it is evident that businesses should focus more intently on reducing employee attrition.
Along with stepping up their recruiting and talent acquisition efforts to compensate for losses, a growing number of organizations are prioritizing benefits and compensation to retain their high-performing employees. This had led to more organizations recognizing the importance of compensation and benefits managers.
If you’re interested in keeping employees happy and improving retention rates, you might pursue a career as a compensation and benefits manager, but there are several important things you should understand about this role.
What Is a Compensation and Benefits Manager?
A compensation and benefits manager is a human resources professional who supervises a team of specialists focused on payroll, insurance, and investing for employees.
Compensation and benefits managers help to establish fair standards of pay for each position within their organization, and across their industry. They work with the HR department to implement, monitor, review, and update policies related to employee compensation and benefits.
Job Description: What Does a Compensation and Benefits Manager Do?
Individuals in this career perform several important duties in a business’s payroll functions. They are likely to collaborate with several employees, managers, and executives on a daily basis to provide insight and make recommendations on different payment and benefits plans. In addition, they work directly with their team members to ensure the information they share with the organization is accurate and aligned.
What do compensation and benefits managers do? Here is just a handful of the many responsibilities typically assigned to these professionals, as per the U.S. Bureau of Labor Statistics (BLS):
- Setting the business’s overall pay and benefits structure and budget
- Overseeing the distribution of information related to benefits and pay to employees
- Working with employees and managers to modify compensation and benefits packages as needed
- Maintaining compliance with federal and state regulations regarding payroll and benefits plans
- Selecting benefits vendors, investment managers, insurance brokers, and other external partners
- Making sure programs stay within the target budget
Because compensation and benefits managers are experts in pay and benefits within the organization, they are typically the ones responsible for determining the right pay and benefits plans. To do so, they might analyze data that comes directly from the business and examine market trends impacting the industry.
Many HR professionals perform both duties, supervising and administering the compensation and benefits programs. Others, particularly those at large organizations, work in just one of these subsets. Regardless, individuals pursuing this profession must gain expertise in both areas, as they typically work in tandem with one another.
Individuals in compensation make sure their organizations offer pay rates that are competitive with companies of a similar size and industry. They may also consider the average salaries of different professionals in the region, as geographic location has a significant impact on pay scales. Compensation professionals may also denote the business’s bonus and incentive pay plans, as well as commission rates for sales teams.
An employee benefits specialist will orchestrate and execute the employee benefits program. Common workplace perks may include paid time off, wellness programs, insurance policies, retirement plans, tuition reimbursement, childcare, and travel assistance.
What Skills and Characteristics Do Compensation and Benefits Managers Need?
Individuals who are considering a career path as a compensation and benefits manager might be curious about different skills and characteristics that lead to success in this profession. Some of the most important skills for compensation and benefits managers include:
- Communication: Compensation and benefits managers are heavily reliant on communication skills; as they must direct teams, interact with vendors, and collaborate with other professionals at their organization daily.
- Business literacy: Because they help determine their organization’s pay and benefits structure, compensation and benefits managers need to understand budgeting and be aware of the other financial considerations in their industry.
- Tech literacy: In the digital age, compensation and benefits managers must be comfortable using spreadsheets and software programs to monitor company data and conduct market research.
- Attention to detail: Creating benefits packages and structuring bonuses can be a nuanced process. Compensation and benefits managers must have a keen eye for detail as they look for efficient ways to optimize these packages for their organization’s needs.
- Negotiation: By employing strong negotiation skills, compensation and benefits managers can help ensure that their organization gets the best possible deals from third-party vendors like insurers and retirement plan providers.
- Delegation: As they direct teams of HR professionals, compensation and benefits managers must understand how to evaluate the abilities of individual employees and delegate tasks to the team members who are best suited for them.
- Leadership: Demonstrating strong leadership skills can help compensation and benefits managers direct projects efficiently and develop rapport with their team members.
Additionally, compensation and benefits managers should be passionate about helping people, as a significant chunk of their job duties includes assisting employees and managers. They must be organized when handling a lot of data and information. Finally, they should be approachable and welcoming to employees and members of the benefits and compensation team.
What Are The Education and Experience Requirements for Compensation and Benefits Managers?
In order to become an HR Manager of any kind, you’ll need to be well-educated in a relevant area. Compensation and benefits managers are typically required to have a minimum of a bachelor’s degree in human resource management, business administration, or a related area.
Work experience is also essential for compensation and benefits managers, according to the BLS. Managers often start as entry-level human resource specialists and gain at least five years of experience before moving on to leadership. A history of work in other HR roles and experience in finance or management can also be helpful for this career path.
Important Certifications for Compensation and Benefits Managers
Certifications are not always required for compensation and benefits manager positions, but they may be in some cases. Some of the most valuable professional certifications related to compensation and benefits management include:
- HRMI Certified Compensation and Benefits Manager (CCBM): Compensation and benefits management certification course offered by Human Resource Management Institute (HRMI).
- HRCI Compensation and Benefits Course: An introductory-level course in compensation practices and policies offered by the Human Resources Certification Institute (HRCI).
- SHRM Foundations of Compensation: Introductory course about compensation structures and systems offered by the Society of Human Resource Managers (SHRM).
- AIHR Compensation and Benefits Certificate Program: A comprehensive course focused on future-proof compensation and benefits strategies for modern employers, offered by the Academy to Innovate HR (AIHR).
Even when it’s not required, earning a relevant certification can make you more attractive to potential employers and help you stand out for higher-paying roles. In some cases, organizations may even sponsor certifications for their employees to help further their professional development.
Compensation and Benefits Manager Salary and Career Outlook
There are a variety of career paths for human resources degree graduates, but compensation and benefits management is an especially attractive option for many people due to competitive pay. According to the BLS, the median annual salary for compensation and benefits managers was $127,530 in May 2021. The top 10% of earners in this profession brought in over $208,000.
The industry in which compensation and benefits managers work is a major salary determinant. Here is a breakdown of the median annual wages of these professionals in different industries, as reported in May 2021:
- Management of companies and enterprises: $135,460;
- Professional, scientific, and technical services: $131,710;
- Insurance carriers and related activities: $127,690;
- Health care and social assistance: $118,960;
- Government: $101,860.
Additionally, the increasing demand for compensation and benefits managers indicates that this career may offer relatively high job security. As companies seek better ways to retain hardworking employees, they will have a growing need for compensation and benefits managers to analyze, evaluate, and execute effective compensation and benefits plans.
The number of professionals in this occupation is expected to grow by 2% from 2021 to 2031, as per the BLS. However, despite slow employment growth, about 1,200 new openings for compensation and benefits managers are expected each year of the decade, resulting from the need to replace workers who switched fields or retired.