By Jean Roque, President + Founder at Trüpp
Compensation is a highly specialized aspect of human resources that requires strengths in areas such as analysis, Excel and/or database systems, compensation practices and plan design, labor laws, pay equity, incentive plans, market trends, employee benefits, and performance management. Before launching your search for a compensation professional, it is important to target your search to the qualifications that align with your organization’s needs. Here are four steps to take prior to hiring a compensation professional.
Evaluate the required skillset
Compensation professionals can easily get siloed or specialized in their role, so it is helpful to consider the specific skills needed at your organization. For example, consider the unique focus for each of the following roles.
A Compensation Analyst may expect to focus most of their time analyzing data, creating and maintaining complex spreadsheets and reports, conducting job surveys and questionnaires, updating job descriptions, and conducting market salary analyses.
A Compensation Manager may expect to develop and implement compensation programs and practices, design incentive plans, align compensation with talent management and equity initiatives to ensure regulatory compliance, and present to key stakeholders.
A Compensation Administrator may expect to administer established compensation programs, apply pay decision frameworks, update job descriptions, conduct employee surveys, and gather market data.
Determine the need for specific qualifications
How important is it for the employee to have a specific degree or certification, such as a Certified Compensation Professional (CCP) certification? If hiring for an internal position, relevant compensation experience may be more important. However, certifications may be important if hiring a compensation consultant that provides services to a company’s clients.
Identify points of engagement
When recruiting for a compensation professional, the employer should consider who the employee will be interfacing with. Suppose the role supports executives and presents to senior stakeholders, the employer should verify their ability to comprehend business issues, present data in compelling manner, and perform their work with a high level of acumen. If the role primarily engages with other human resources team members or non-management staff, the employer may be less concerned about the candidate’s ability to present or confidently think on their feet.
When assessing the need to hire a compensation professional, many employers will discover that the need fluctuates, and the required skillset varies based on the project. When this is the case, an employer may be better served by engaging with a compensation consulting firm rather than hiring internally. Additionally, offloading the compensation program management and administration enables the employer to leverage an experienced team, scale and contract resources as needed, and avoid the challenge of hiring and retaining compensation professionals.
Regardless of the path chosen, maintaining a compelling compensation philosophy, up-to-date compensation program, and sound pay practices is key to attracting and retaining talent, maintaining pay equity, and competing in shifting labor markets.