Compensation Analyst Job Description
Compensation analysts ensure their organization offers pay plans that are competitive, fiscally viable, and in accordance with state and federal laws. Success in this position requires careful evaluations of job wages, employee performances, benefits, pay incentives, and more. Compensation analysts typically deal with large quantities of data, so they should be highly organized and detail oriented. Also, they should have strong interpersonal skills as they frequently interact with others. The traditional work environment is an office setting with nine-to-five hours. Typically, compensation analysts work closely with human resources or other personnel departments to carry out their duties and responsibilities.
Compensation Analyst Duties and Responsibilities
While specific duties for compensation analysts vary depending on their place of employment, there are several core tasks commonly associated with the position, including:
Administer Compensation Programs
The chief responsibility of a compensation analyst is to administer pay programs on behalf of their company. These programs are far-reaching and can include wages and compensation, benefits packages, incentives, and bonuses. Administering these programs requires input from multiple sources, including market research, internal and external surveys, and performance evaluations, to name a few.
Evaluate Company Compliance
There are multiple state and federal pay regulations a company must follow to avoid penalties or lawsuits. A compensation analyst is responsible for knowing what those regulations are and ensuring their company is and remains compliant.
Conduct Job Performance Reviews
To properly administer pay programs, a compensation analyst must have all relevant information related to employee performance. To acquire this information, a compensation analyst will either conduct a performance review personally or consult with someone who has direct information about an employee’s performance – e.g., a department manager or HR professional.
Research and Gather Data
Compensation analysts rely on various data sets to inform their actions. Compiling this data means they must consult and research multiple sources, including current wage trends, compensation surveys, job market data, and more. All this information must be meticulously organized and collated for reference.
Create Operational Reports
A company relies on its compensation analyst to produce detailed reports on everything from job performance to current market pricing. The creation of these reports requires collecting and collating data, analyzing that data for pertinent information, and creating an actionable report based on that information.
Compensation Analyst Skills and Qualifications
A successful compensation analyst is a strategic thinker who can effectively plan and problem-solve and who is comfortable working with others. Compensation analysts commonly hold a bachelor’s or master’s degree, and many possess additional job-related certifications. Employers also prioritize candidates who display the following abilities:
- Research skills – compensation analysts need large quantities of data to effectively perform their duties. To ensure they have the most accurate and up-to-date information, compensation analysts must be capable researchers who know how to get the information they need
- Analytical thinking – collecting data is only part of a compensation analyst’s workflow. They also must interpret that information and extract the data they need for tasks and programs
- Microsoft Excel expertise – without workbooks and spreadsheets, the amount of data that compensation analysts must deal with would be wholly unmanageable. Of the various spreadsheet software applications, Microsoft Excel is the most frequently used and should be mastered
- Organization skills – compensation analysts must keep detailed records on personnel and policy. To retrieve these files quickly, they need to be highly organized and detail oriented
- Interpersonal skills – compensation analysts spend large parts of their days talking and working with others, so the ability to communicate effectively with different personality types is essential
Tools of the Trade
Compensation analysts use some or all of the following tools during their workday:
- Microsoft Office software (Word, Excel, Outlook, PowerPoint, and SharePoint)
- Communication tools (telephones, emails, and fax machines)
- Human resources software
Compensation Analyst Education and Training
For compensation analysts, a bachelor’s degree from an accredited in university is often required for employment, with additional preference given to those who possess a master’s. Although not always a requirement, preference is often given to candidates who have completed courses to attain job-related certifications, such as the Certified Compensation Professional (CCP) or Certified Employee Benefit Specialist (CEBS) designations.
Compensation Analyst Salary and Outlook
The Bureau of Labor Statistics (BLS) lists compensation analysts under the broader category of compensation, benefits, and job analysis specialists, and reports a median annual salary of $62,680, which is equal to an hourly rate of $30.14. These numbers are consistent with salaries offered for compensation analysts on multiple online job sites. Compensation analysts in the 10th percentile earn $38,860 per year, while the highest paid make around $101,800 annually.
According to the BLS, employment in this sector is expected to grow by 9 percent through 2026, which is on par for the projected national average for all occupations. This level of growth will translate to more than 7,000 new employment opportunities for compensation analysts through 2026.
Ready to become a compensation analyst? Check out the resources below to get started:
Essential HR Handbook: A Quick and Handy Resource for Any Manager or HR Professional – billed as “the one HR guide every manager needs,” this handbook is an excellent resource for compensation analysts. Authors Sharon Armstrong and Barbara Mitchell deliver over 250 pages of useful information, including guides for appraising job performance, rubrics for providing equitable pay, rewards strategies, and much more
Excel 2016 Bible – from spreadsheet guru John Walkenbach, this comprehensive guide teaches you everything you need to know about Microsoft Excel. Inside, you’ll find over 1,100 pages of useful instructions on everything from creating your first workbook to leveraging advanced formulas to create detailed, actionable reports
Perfect Phrases for Performance Reviews – a handy resource for anyone who conducts job performance reviews, this book provides hundreds of carefully constructed phrases to effectively communicate your assessment of an employee’s performance
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