Compensation and Benefits Managers : Occupational Outlook Handbook : U.S. Bureau of Labor Statistics

Summary

Compensation and benefits managers often give presentations on different benefit plans.

Quick Facts: Compensation and Benefits Managers
2010 Median Pay	$89,270 per year $42.92 per hour
Entry-Level Education	Bachelor’s degree
Work Experience in a Related Occupation	1 to 5 years
On-the-job Training	None
Number of Jobs, 2010	31,800
Job Outlook, 2010-20	3% (Slower than average)
Employment Change, 2010-20	900

What Compensation and Benefits Managers Do

Compensation managers plan, direct, and coordinate how and how much an organization pays its employees. Benefits managers do the same for retirement plans, health insurance, and other benefits an organization offers its employees.

Work Environment

Compensation and benefits managers work throughout the economy. They typically work in offices and may work long hours.

How to Become a Compensation or Benefits Manager

Candidates need a combination of education and related work experience to become a compensation and benefits manager. Although most positions require at least a bachelor’s degree, some require a master’s degree.

Pay

The median annual wage of compensation and benefits managers was $89,270 in May 2010.

Job Outlook

Employment of compensation and benefits managers is expected to grow 3 percent from 2010 to 2020, slower than the average for all occupations. Continued contracting out of compensation and benefits work is expected to result in slow employment growth. Candidates will face competition for jobs.

Similar Occupations

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

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What Compensation and Benefits Managers Do About this section

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

Duties

Compensation and benefits managers typically do the following:

Set the organization's pay structure and benefits offerings so the organization can compete for employees
Participate in or buy salary surveys to see how their organization's pay compares with that in other organizations
Determine competitive wage rates and develop or modify compensation plans
Evaluate employee benefits policies to assess whether they are current, competitive, and legal
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
Collaborate with outside partners such as benefits vendors and investment managers
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.

In addition to their administrative responsibilities, compensation and benefits managers also have several technical and analytical duties. For example, they may do complex data analysis to determine the best pay and benefits plans for an organization. They also must 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 frequently identify and present their findings 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 collect and analyze data on wages and salaries, and they evaluate how their organization’s pay structure compares with 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 and insurance policies such as health, life, and disability. They work closely with benefits vendors and manage the enrollment, renewal, and distribution processes for an organization’s employees. They must frequently monitor government regulations and the costs of other plans to ensure that their programs are current and competitive.

Work Environment About this section

Compensation and benefits managers may meet with benefit vendors.

Compensation and benefits managers held about 31,800 jobs in 2010 and were employed throughout the economy. About 16 percent were employed in the management of companies and enterprises industry.

They typically work in offices. Most compensation and benefits managers work full time and may work long hours.

How to Become a Compensation or Benefits Manager About this section

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, although 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

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.

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.

Certification

Many professional associations for human resources professionals offer classes to enhance the skills of their members. Some associations, including the International Foundation of Employee Benefit Plans and WorldatWork, specialize in compensation and benefits and offer certification programs.

Although not required, certification can show professional 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.

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.

Managerial skills. Compensation and benefits managers must coordinate the work activities of their staff and properly administer compensation and benefits programs.

Speaking skills. Compensation and benefits managers rely on speaking skills when directing their staff and giving presentations. For example, they may present the advantages of a certain pay scale to management or inform employees of their benefits plan options.

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 About this section

Compensation and Benefits Managers

Median annual wages, May 2010

Management Occupations: $91,440
Compensation and Benefits Managers: $89,270
Total, All Occupations: $33,840

The median annual wage of compensation and benefits managers was $89,270 in May 2010. 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 $52,150, and the top 10 percent earned more than $151,090.

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

Job Outlook About this section

Compensation and Benefits Managers

Percent change in employment, projected 2010-20

Total, All Occupations: 14%
Management Occupations: 7%
Compensation and Benefits Managers: 3%

Employment of compensation and benefits managers is expected to grow 3 percent from 2010 to 2020, slower than the average for all occupations.

Many organizations contract out a portion of their compensation and benefits functions to human resources consulting firms 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.

Similarly, as benefits packages grow more complicated, employers increasingly contract out their benefits work to human resources organizations that have expertise in complex benefits programs and knowledge of federal and state regulations. These consulting firms are able to automate tasks and operate overseas call centers, reducing the need for managers.

Therefore, even as healthcare costs rise and healthcare coverage options expand, employment of compensation and benefits managers is not expected to experience comparable growth.

Job Prospects

Candidates are expected to face competition for jobs. Those who have a master’s degree, certification, or experience working with compensation or benefits plans should have the best job prospects.

Employment projections data for compensation and benefits managers, 2010-20
Occupational Title	SOC Code	Employment, 2010	Projected Employment, 2020	Change, 2010-20		Employment by Industry
Occupational Title	SOC Code	Employment, 2010	Projected Employment, 2020	Percent	Numeric	Employment by Industry
SOURCE: U.S. Bureau of Labor Statistics, Employment Projections program
Compensation and Benefits Managers	11-3111	31,800	32,700	3	900	[XLS]

Similar Occupations About this section

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	2010 MEDIAN PAY
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.	High school diploma or equivalent	$77,890
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	$103,910
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	$99,180
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 public or private-sector organizations.	See How to Become One	$101,250
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	$89,170
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	$58,360
Human Resources Specialists	Human resources specialists recruit, screen, interview, and place workers. They also may handle human resources work in a variety of other areas, such as employee relations, payroll and benefits, and training.	Bachelor’s degree	$52,690