Compensation and Benefits Manager: Career and Salary Outlook
Last Updated March 26, 2024
Individuals planning for a career in compensation and benefits management should know the options are as varied as the potential employers themselves. When companies expand, they need managers who can handle specific duties for employees working locally and in other states. Additionally, as the pandemic creates new remote opportunities, workers are asking for benefits beyond what was formerly expected by new employees.
This is where compensation and benefits managers come into play. As the title implies, the role of a compensation and benefits manager (C&B manager) is to coordinate employees’ compensation throughout the company, from top management down to hourly workers.
The position requires a bachelor’s degree, but more professionals are pursuing advanced education like graduate certificates to increase their knowledge base. Approximately 1,100 C&B manager positions open each year, according to the U.S. Bureau of Labor Statistics (BLS), usually to replace workers who’ve moved on to other occupations or replace those who have retired.
The following sections discuss what is involved with becoming a compensation and benefits manager, along with the skill requirements and salary potential.
Who is a Compensation and Benefits Manager?
Specifically, the C&B manager handles all benefits a company gives to employees, including bonuses, stock options, pensions, insurance, along with other benefits and perks the company offers. The C&B manager is also responsible for evaluating all positions within the company to determine comparative salaries, making sure the wages offered are competitive both locally and nationally and creating a fair bonus plan for the company.
Smaller companies sometimes combine the compensation and benefits manager job description with those of an HR manager. Larger companies may opt to separate the compensation and benefits department from HR and further separate the compensation position from the benefits position.
Compensation and Benefits Manager Job Requirements
Because the position can vary between companies, it is challenging to describe standard job requirements across the board for a C&B management position. But there are some tasks that are all-encompassing regardless of business.
- Job evaluation: The C&B manager is responsible for evaluating all the jobs in the company and creating a pay band for each position. To ensure that the company treats individuals within the same job band equitably, the C&B manager is responsible for evaluating the qualifications of each position and deciding what makes them equal, also known as a job evaluations scheme. For instance, most C&B managers would consider a Grade A analyst and a Grade A coder equal because they receive similar scores under the job evaluation scheme.
- Company integrity and analytics: Once the C&B manager has evaluated the jobs, they must next ensure a fair pay structure between all pay bands and grades. Raises and benefits must be allocated fairly, and variances should fall within reasonable parameters. Similarly, ranked workers should receive equal pay.
- Market rates: A C&B manager must review the current market rates and determine the true market value for each job. This varies from position to position, from location to location, and on the company’s specific needs. In addition, they must consider variabilities in the outside world. For instance, the current pandemic has created a volatile market that favors workers, meaning they can demand better wages and benefits. A savvy C&B manager takes all trends into account.
- Developing the bonus structure: The C&B manager must create a discretionary and non-discretionary bonus system. Discretionary includes performance-and merit-based bonuses, while non-discretionary are sales, production, and annual bonuses. These two structures help ensure impartiality and prevent allegations of favoritism or unfairness.
Most C&B managers work a full-time schedule, although some work 40+ hours per week. In addition, C&B managers can expect to work even more during a company’s peak time, such as the benefits enrollment period, to meet deadlines.
Education, Skills and Traits of a Compensation and Benefits Manager
There is no single educational track to become a compensation and benefits manager. However, because the career involves both management and people skills, prospective candidates need to have a good management background along with a solid knowledge of social interactions and human psychology.
According to the BLS, most compensation and benefits managers require at least a bachelor’s degree in business or human resources, which will help give professionals the required knowledge of business relations. Alternatively, a degree in social science or psychology could help provide the personal interaction skills necessary to handle the human relations aspect of job assessment.
The BLS states that most C&B managers have several years of prior experience as compensation and benefits specialists working under a C&B manager. Also helpful is additional management experience or experience in finance, human resources, or another related field.
C&B managers also should have key abilities outside what is taught in school or at work.
- Leadership: A key trait for any management position is leadership ability, including directing people and bringing projects to a successful conclusion.
- Communication skills: Good managers communicate their findings to upper management and explain their duties to their workers.
- Analysis and critical thinking: C&B managers must be capable of reviewing large quantities of data, comparing and contrasting their findings, and rapidly and efficiently assessing the relevant portions.
- Knowledge of legal policies: Some compensation and benefits are required by federal statute or must adhere to federal and state regulations. The C&B manager must know these policies and ensure that the company’s compensation and benefits comply with the law.
Job Outlook and Salary Potential for a Compensation and Benefits Manager
The BLS expects the job outlook for compensation and benefits managers to grow at about 2% annually through 2032, which is slower than the national average for all occupations. Despite lower-than-average expected job growth, the BLS projects approximately 1,100 job openings each year, through 2032.
The earning potential of a compensation and benefits manager depends on the size and type of business. Salary potential can also depend on whether the position reports to a director. For example, the C&B manager may head the department in a mid-sized company. In contrast, a benefits director may oversee the entire division within a large corporation.
On average, a C&B manager who meets educational and work experience qualifications should expect to have high earning potential. The BLS states that the median annual pay for a C&B manager in 2022 was $131,280*.
The BLS also reports that the most common compensation and benefits manager employers are management of companies and enterprises and professional, scientific, and technical industries, providing an average salary potential that’s higher than the aforementioned median pay ($154,110 and $142,570, respectively). In terms of average yearly salary, following professional, scientific, and technical industries employers are insurance carriers (at $126,220 per year), healthcare and social assistance providers (at $121,780 per year), and government organizations (at $104,310 per year).
Your Next Step to Developing as a Compensation and Benefits Manager
Graduate certificates in human resource management, strategic management, and other human resource skills can help provide compensation and benefits managers with a competitive advantage. Michigan State University’s online graduate certificate program in HR Management and Development well-prepares professionals to develop HR skills that employers desire, covering topics including compensation systems, staffing, management of labor, compliance, and regulatory issues, among other core HR functions.
Disclaimer:
National long-term projections may not reflect local and/or short-term economic or job conditions, and do not guarantee actual job growth. Information provided is not intended to represent a complete list of hiring companies or job titles, and certificate or degree program options do not guarantee career or salary outcomes. Students should conduct independent research for specific employment information.
