What is the manager of compensation and benefits?
The manager of compensation and benefits is an essential cog in the company benefits and compensation wheel. This article delves further into this role. We look at the compensation and benefits manager’s main duties and pay.
A manager of compensation and benefits is accountable for the accuracy and fairness of all forms of employee pay, including base pay, incentives, stock options, pensions, and other benefits. Compensation and benefits (C&B) management oversees all related initiatives in larger organizations, whereas in smaller ones it may be a subset of the responsibilities of an HR generalist.
The role of the compensation and benefits manager
The manager of compensation and benefits collaborates with recruiting managers, HR staff, and others in the field to guarantee that employment offers are competitive and fair (more on this later). The duties of a Compensation and Benefits Manager include the following.
- Finding out the market rates: It is the responsibility of C&B managers to assess each position and establish a fair market value for it. One common method is to conduct wage surveys and use statistical analysis to find out how much each position is worth in the market.
This isn’t necessarily a set number because every business is unique and every project is different. We can get a ballpark figure by looking at things like the required level of education, number of years of experience, and name of institution for the position. Next, the C&B manager needs to think about the individual’s training, experience, responsibilities, and the amount of people they oversee when making an offer.
Take the case of a company posting a marketing manager position. The ideal applicant, however, possesses ten years of relevant work experience and offers suggestions that the business would like to adopt. If the candidate’s market rate is higher than the anticipated salary, a C&B manager will make the necessary adjustments to the salary.
- Creating Salary Levels: Many businesses utilize compensation bands to account for the fact that different people bring different sets of abilities to different jobs. The middle point of these salary ranges is the going rate for the job. You have what is known as a compa-ratio in reference to this midpoint.
- Evaluating Jobs: Every position has both a set wage and a place within a pay band. After reviewing each position’s job description, a C&B manager will use predetermined criteria to place it in the appropriate job band. It is possible to allocate multiple positions with varying responsibilities and duties to the same job band inside the same firm.
It is common practice to associate job titles with these bands as well. For example, a senior analyst would be considered to be in Grade 12, a junior analyst in Grade 8, and an analyst in Grade 10.
- Keep an eye on internal equity and analytics: While anything is up for discussion, it is the responsibility of the C&B manager to guarantee internal pay equity. For colleagues in a comparable position, having great negotiating abilities shouldn’t lead to a significantly different wage. C&B managers scour the company for racial, gender, and age disparities, in addition to checking internal equity amongst employees with the same title. As a rule, they will check for variances using regression analysis. There are many acceptable factors that contribute to an individual’s salary, such as their level of education, performance reviews, and the number of hours worked. However, gender and color should not be included.
Also, when it comes to people data, compensation and benefits records tend to be the most well-kept and organized. Because of this, it is ideal for analytics pertaining to individuals. Performance measures are similar to the aforementioned compa-ratios. The ideal compa-ratio is positive, the middle ground is average, and the worst case scenario is a negative one. Disparities may point to unethical methods of pay.
It is also possible to examine compa-ratio deviations across different parts of the business in order to spot outliers. When it comes to compensation, these can also show that there may be systemic issues. An important aspect of a compensation and benefits manager’s job is to spot these trends early on and fix them.
- Constructing Bonus Systems: Discretionary and non-discretionary bonuses are the two main categories.
Sales and guaranteed production bonuses are examples of non-discretionary bonuses. Prior to the employee completing the task, the amount (or percentage) is determined by the company. Workers get the bonus if they fulfill the requirements.
Company and individual success are two of many variables that could affect a discretionary bonus. When creating these frameworks, C&B management keep market standards and internal equity in mind.
- Savings programs: A C&B manager is responsible for both defined contribution and defined payout programs, including 401(k)s and pensions, respectively. In developing and overseeing these programs, they collaborate with suppliers, employee councils, unions, and lawyers.
- Coverage for medical expenses: Having health insurance through your employer is common in the US. The business, often via an intermediary, chooses the health insurance plans and negotiates premiums with the providers. Any competent C&B manager should also be able to do this task.
- Every other perk: The C&B manager is pivotal in deciding on employee perks, such as the frequency of yoga classes during lunch, the availability of healthy snacks in the break room, and the amount of paid vacation days.
- Software for benefits: Payroll and benefits administration software is an often-overlooked component. More and more companies are using pay and benefit plans that are open to negotiation. The advantages of company-sponsored daycare may be more appealing to a single father, while an expat may desire additional time off to visit relatives. A great way to boost morale and motivation among workers is to provide them benefits packages that they may customize to their specific needs. Here, software plays a significant role.
How to start a career in benefits and compensation management
It is common for benefits and compensation managers to have extensive expertise in the field as well as a bachelor’s or master’s degree in business or human resources. Because of the importance of salaries in this field, you should have extensive experience with financial analysis and statistical modeling.
Top applicants should have credentials that prove they know what they’re doing when it comes to compensation. Some of the credentials held by those in this field include Certified Compensation Professional, Certified Employee Benefits Specialist, and Compensation Management Specialist. Although they lack the specificity of more recent certifications, broader human resources credentials like those from the SHRM or HRCI, as well as some online HR courses, can teach candidates the fundamentals of HR topics like compensation and benefits.
Manager of Compensation and Benefits Salary (United States)
Task specificity, business size, and geography are the three primary factors that determine salary ranges. On average, a C&B manager in Iowa can expect to make $112,560 a year, compared to $79,017 in the nation’s capital, according to Salary.com
Directors oversee others and can earn substantially more money in bigger organizations. Most Compensation Directors in Washington, DC make more than $166,651 a year, which is more than twice as much as a manager. Naturally, a human resources generalist in a smaller organization may handle all of these responsibilities.
A pay and benefits manager applicant should know what she’s getting into and be comfortable with her salary request, or else she won’t be a suitable fit for the position.
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