Compensation and Benefits Managers

Summary

compensation and benefits managers image
Compensation and benefits managers may meet with benefits vendors.
Quick Facts: Compensation and Benefits Managers
2012 Median Pay $95,250 per year
$45.79 per hour
Entry-Level Education Bachelor’s degree
Work Experience in a Related Occupation 5 years or more
On-the-job Training None
Number of Jobs, 2012 20,700
Job Outlook, 2012-22 3% (Slower than average)
Employment Change, 2012-22 600

What Compensation and Benefits Managers Do

Compensation managers plan, direct, and coordinate how much an organization pays its employees and how employees are paid. Benefits managers plan, direct, and coordinate retirement plans, health insurance, and other benefits that an organization offers its employees.

Work Environment

Compensation and benefits managers work in nearly every industry. They typically work in offices and may work long hours.

How to Become a Compensation or Benefits Manager

Workers need a combination of education and related work experience to become a compensation and benefits manager. Most jobs require at least a bachelor’s degree.

Pay

The median annual wage for compensation and benefits managers was $95,250 in May 2012.

Job Outlook

Employment of compensation and benefits managers is projected to grow 3 percent from 2012 to 2022, slower than the average for all occupations. Employment growth will be limited as organizations increasingly contract out a portion of their compensation and benefits functions to human resources consulting firms in order to reduce costs and gain access to technical expertise. Competition for jobs will be strong.

Similar Occupations

Compare the job duties, education, job growth, and pay of compensation and benefits managers with similar occupations.

More Information, Including Links to O*NET

Learn more about compensation and benefits managers by visiting additional resources, including O*NET, a source on key characteristics of workers and occupations.

What Compensation and Benefits Managers Do

Compensation and benefits managers
Benefits managers analyze benefits plans and determine the best fit for a company.

Compensation managers plan, direct, and coordinate how much an organization pays its employees and how employees are paid. Benefits managers plan, direct, and coordinate retirement plans, health insurance, and other benefits that an organization offers its employees.

Duties

Compensation and benefits managers typically do the following:

  • Set the organization’s pay structure and benefits offerings
  • Determine competitive wage rates and develop or modify compensation plans
  • Evaluate employee benefits policies to assess whether they are current, competitive, and legal
  • Choose and manage outside partners such as benefits vendors and investment brokers 
  • Coordinate and supervise the work activities of specialists and support staff
  • Oversee the distribution of pay and benefits information to the organization’s employees
  • Ensure that pay and benefits plans comply with federal and state regulations
  • Prepare a program budget and keep operations within budget

Although some managers administer both the compensation and benefits programs in an organization, other managers—particularly at large organizations—often specialize and oversee one or the other. All managers, however, routinely meet with senior staff, managers of other human resources departments, and the financial officers of their organization. They provide expertise and make recommendations on compensation and benefits policies, programs, and plans.

In addition to their administrative responsibilities, compensation and benefits managers also have several technical and analytical duties. For example, they may perform complex data analysis to determine the best pay and benefits plans for an organization. They may also monitor trends affecting pay and benefits and assess how their organization can improve its practices or policies. Using a variety of analytical, database, and presentation software, managers draw conclusions, present their findings, and make recommendations to other managers in the organization.

Compensation managers are responsible for managing an organization’s pay structure. They monitor market conditions and government regulations to ensure their pay rates are current and competitive. They may analyze data on wages and salaries, and they evaluate how their organization’s pay structure compares with that of other companies. Compensation managers then use this information to maintain or develop pay scales for an organization.

Some also design pay-for-performance plans, which include guidelines for bonuses and incentive pay. They may help to determine commission rates and other incentives for sales staff.

Benefits managers administer a company’s employee benefits program, which includes retirement plans, leave policies, wellness programs, and insurance policies such as health, life, and disability. They select benefits vendors and oversee the enrollment, renewal, and distribution processes for an organization’s employees. They must frequently monitor government regulations and market trends to ensure that their programs are legal, current, and competitive.

Work Environment

Compensation and benefits managers
Compensation and benefits managers typically work in offices.

Compensation and benefits managers held about 20,700 jobs in 2012 and worked in nearly every industry. Compensation and benefits managers typically work in offices.

Work Schedules

Most compensation and benefits managers work full time and may work long hours.

How to Become a Compensation or Benefits Manager

Compensation and benefits managers
Compensation and benefits managers determine equitable pay rates.

Candidates need a combination of education and related work experience to become a compensation and benefits manager.

Education

Compensation and benefits managers need at least a bachelor’s degree for most positions, and some jobs require a master’s degree. Because not all undergraduate programs offer a degree in human resources, managers often have a bachelor’s degree in business administration, business management, finance, or a related field.

Many employers prefer to hire managers who have a master’s degree, particularly one with a concentration in human resources management, finance, or business administration (MBA).

Work Experience in a Related Occupation

Related work experience is essential for compensation and benefits managers. Compensation managers usually need experience in compensation or another job where they performed complex financial analysis. For example, compensation and benefits managers often start out as compensation, benefits, and job analysis specialists.

In addition to experience working with benefits plans, most benefits managers must have strong knowledge of benefits practices and government regulations. Work experience in other human resource fields, finance, or management is also helpful for getting a job as a benefits manager.

Licenses, Certifications, and Registrations

Many professional associations for human resources workers offer classes to enhance the skills and credibility of their members. Some associations, including the International Foundation of Employee Benefit Plans and WorldatWork, offer certification programs that specialize in compensation and benefits. Others, including the HR Certification Institute, offer general human resources credentials.

Although not required, certification can show expertise and credibility. In fact, many employers prefer to hire certified candidates, and some positions may require certification. Certification programs for management positions often require several years of related work experience to qualify for the credential.

Important Qualities

Analytical skills. Analytical skills are essential for compensation and benefits managers. In addition to analyzing data on salaries and the cost of benefits, they must assess and devise programs that best fit an organization and its employees.

Business acumen. Compensation and benefits managers must manage a budget, build a case for their recommendations, and understand how compensation and benefits plans affect the company’s finances.

Communication skills. Compensation and benefits managers use their communication skills when directing their staff, giving presentations, and working with colleagues. For example, they may present the advantages of a certain pay scale to management and address any concerns.

Decision-making skills. Compensation and benefits managers need strong decision-making skills. They must weigh the strengths and weaknesses of different pay structures and benefits plans and choose the best options for an organization. 

Leadership skills. Compensation and benefits managers must coordinate the work activities of their staff and properly administer compensation and benefits programs, ensuring work is completed accurately and on schedule.

Writing skills. Compensation and benefits managers need strong writing skills to prepare informational materials on compensation and benefits plans for an organization’s employees. They also must clearly convey recommendations in written reports.

Pay

Compensation and Benefits Managers

Median annual wages, May 2012

Compensation and benefits managers

$95,250

Management occupations

$93,910

Total, all occupations

$34,750

 

The median annual wage for compensation and benefits managers was $95,250 in May 2012. The median wage is the wage at which half the workers in an occupation earned more than that amount and half earned less. The lowest 10 percent earned less than $54,060, and the top 10 percent earned more than $172,450.

Most compensation and benefits managers work full time and may work long hours.

Job Outlook

Compensation and Benefits Managers

Percent change in employment, projected 2012-22

Total, all occupations

11%

Management occupations

7%

Compensation and benefits managers

3%

 

Employment of compensation and benefits managers is projected to grow 3 percent from 2012 to 2022, slower than the average for all occupations.

Due to healthcare reform and rising healthcare costs, organizations will need the expertise of benefits managers when choosing, updating, and administering their benefits policies. Similarly, compensation managers will be needed to analyze compensation policies and design competitive compensation packages.

As organizations focus on reducing compensation and benefits costs, many have established increasingly complex plans, such as pay-for-performance strategies and health and wellness programs. Organizations will need managers to evaluate and direct these compensation and benefits policies and plans.

However, many organizations increasingly contract out a portion of their compensation and benefits functions to human resources consulting firms in order to reduce costs and gain access to technical expertise. For example, to reduce administrative costs, organizations commonly use an outside vendor for processing payroll and insurance claims. These consulting firms are able to automate tasks and operate overseas call centers, thereby reducing the need for compensation and benefits managers.

Job Prospects

Jobseekers can expect strong competition for available jobs because the slow projected growth will result in only about 600 new positions over the 10-year period. Compensation and benefits manager positions typically offer high pay, and job openings often attract many qualified applicants. Those who have a master’s degree, certification, and extensive experience working with compensation or benefits plans should have the best job opportunities.

Employment projections data for Compensation and Benefits Managers, 2012-22
Occupational Title SOC Code Employment, 2012 Projected Employment, 2022 Change, 2012-22 Employment by Industry
Percent Numeric

SOURCE: U.S. Bureau of Labor Statistics, Employment Projections program

Compensation and benefits managers

11-3111 20,700 21,400 3 600 [XLS]

Similar Occupations

This table shows a list of occupations with job duties that are similar to those of compensation and benefits managers.

Occupation Job Duties ENTRY-LEVEL EDUCATION 2012 MEDIAN PAY
Administrative services managers

Administrative Services Managers

Administrative services managers plan, direct, and coordinate supportive services of an organization. Their specific responsibilities vary by the type of organization and may include keeping records, distributing mail, and planning and maintaining facilities.

Bachelor’s degree $81,080
compensation benefits and job analysis specialists image

Compensation, Benefits, and Job Analysis Specialists

Compensation, benefits, and job analysis specialists help conduct an organization’s compensation and benefits programs. They also evaluate job positions to determine details such as classification and salary.

Bachelor’s degree $59,090
Financial managers

Financial Managers

Financial managers are responsible for the financial health of an organization. They produce financial reports, direct investment activities, and develop strategies and plans for the long-term financial goals of their organization.

Bachelor’s degree $109,740
Human resources managers

Human Resources Managers

Human resources managers plan, direct, and coordinate the administrative functions of an organization. They oversee the recruiting, interviewing, and hiring of new staff; consult with top executives on strategic planning; and serve as a link between an organization’s management and its employees.

Bachelor’s degree $99,720
Human resource specialists

Human Resources Specialists and Labor Relations Specialists

Human resources specialists recruit, screen, interview, and place workers. They often handle other human resources work, such as those related to employee relations, payroll and benefits, and training. Labor relations specialists interpret and administer labor contracts regarding issues such as wages and salaries, employee welfare, healthcare, pensions, and union and management practices.

Bachelor’s degree $55,640
Purchasing managers, buyers, and purchasing agents

Purchasing Managers, Buyers, and Purchasing Agents

Purchasing managers, buyers, and purchasing agents buy products for organizations to use or resell. They evaluate suppliers, negotiate contracts, and review product quality.

See How to Become One $60,550
Top executives

Top Executives

Top executives devise strategies and policies to ensure that an organization meets its goals. They plan, direct, and coordinate operational activities of companies and organizations.

Bachelor’s degree $101,650
Training and development managers

Training and Development Managers

Training and development managers plan, direct, and coordinate programs to enhance the knowledge and skills of an organization’s employees. They also oversee a staff of training and development specialists.

Bachelor’s degree $95,400
training and development specialists image

Training and Development Specialists

Training and development specialists help plan, conduct, and administer programs that train employees and improve their skills and knowledge.

Bachelor’s degree $55,930
Suggested citation:

Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, 2014-15 Edition, Compensation and Benefits Managers,
on the Internet at http://www.bls.gov/ooh/management/compensation-and-benefits-managers.htm (visited August 01, 2014).

Publish Date: Wednesday, January 8, 2014