What Does a Compensation Manager Do?
Compensation managers work in nearly every industry, making sure employees are paid correctly and appropriately. Since they spend a lot of time working with numbers, it’s important these human resource professionals are good at math and basic computer skills. They should also understand budgets and business finances.
If you have an interest in finances and human resources, a career as a compensation manager might be for you. Read more of this article to find out if it aligns with your career goals.
What Is a Compensation Manager?
Compensation managers develop a company’s payment system and ensure all employees are well compensated.
What Does a Compensation Manager Do?
Compensation managers are the main employees who monitor a company’s budget. They monitor market conditions, government regulations, and cultural statistics to make sure an organization’s pay rate is current, appropriate, and competitive. They have a variety of duties, from analyzing data about wages and salaries to evaluating and adjusting pay structures. Some compensation managers also help develop and monitor a company’s benefits.
The role of a compensation manager ranges from business to business, but for the most part, all compensation managers are responsible for the following duties:
- Develop a budget and keep within that budget
- Develop an organization’s pay scale and structure
- Oversee the distribution of pay to employees
- Develop a benefits packages including retirement plans and health insurance
- Evaluate cost-of-living adjustments
- Ensure the company’s pay scale complies with state and federal laws and regulations
- Propose fair and competitive compensation for positions
- Monitor wage rates to develop or modify compensation plans
- Prepare annual financial statements and summaries
- Assist managers in answering questions from employees
- Oversee compensation and payroll support team
How to Become a Compensation Manager
Compensation managers usually have a bachelor’s degree in human resources, finance, business, or a related field. A master’s degree is usually not required for entry-level positions, but earning one can help you rise above your competitors. Earning certification is also a good idea if you want to showcase your knowledge and set yourself apart on your resume. WorldatWork offers the Certified Compensation Professional for U.S.-based professionals and the Global Remuneration Professional. The International Foundation of Employee Benefit Plans also offers the Certified Employee Benefits Specialist certification.
What Degree Do You Need to Become a Compensation Manager?
As mentioned, a bachelor’s degree is required for entry-level positions as a compensation manager. Many people go on to earn master’s degree, though.
Excelsior University’s Bachelor of Science in Business program is designed for working adults. Gain skills you can use on the job in areas including accounting, business strategy, communication, computer skills, economics, business ethics, finance, global business, leadership, management, marketing, data analysis, and teamwork and cultural diversity. The bachelor’s in business curriculum gives you a broad foundation in liberal arts and sciences and the knowledge you need to create effective business strategies and achieve measurable results for your employer.
Excelsior’s Master of Science in Human Resource Management with an Emphasis in Diversity and Technology program gives you specialized knowledge to lead organizations through complex challenges associated with all functions of human resources, including recruitment and selection, training and development, performance appraisals, health and safety, labor relations, and communications, especially with a distributed workforce. Either is a good choice if you’d like to enter the world of compensation management.
How Much Do Compensation Managers Make?
According to the Bureau of Labor Statistics, the median annual wage for compensation managers was $127,530 as of May 2021 and the occupation was projected to grow 2 percent from 2021 to 2031, which is slower than average for all other occupations. Despite this limited growth rate, about 1,200 openings are expected to occur each year, on average, over the next decade.
If becoming a compensation manager sounds like something you’d like to pursue, consider starting on your degree today!