The amount of compensation that an employer is willing to pay often represents the value placed on what employees bring to the company. A company may hire a compensation analyst to evaluate the compensation system for current and prospective positions. For most compensation analysts, a primary responsibility is to create an equitable and legally compliant compensation system. Compensation analyst jobs may include researching comparable positions within the industry based on geography and trends. Using research and analytical skills, compensation analysts may develop a compensation structure to help a company retain good workers by rewarding knowledge, skill, and ability.
The compensation analyst may produce a job analysis that evaluates the duties and responsibilities of each position within a company. A job analysis of each position may involve the analyst assigning organizational ranking and salary value. The process identifies the position’s worth to the company while also determining the necessary knowledge and skills to perform certain tasks. This information may ensure employees receive adequate compensation comparable to the requirements of the position.
To complete a full assessment of company positions, compensation analyst duties may also include researching comparable positions in the industry. The compensation analyst may examine industry trends to determine what competitors are paying in compensation and benefits packages. In general, compensation analyst jobs investigate the skill level, job responsibility, and education standards at competitive companies. Analyzing the standards of competitors may highlight areas that a company can use as an advantage for hiring the best talent.
A compensation analyst may interpret the research findings into a report that is typically presented to senior management. This information usually provides recommendations on what to offer employees based on industry standards and the financial position of the company. The report may also detail where the company currently ranks compared to the competition.
The expertise of a compensation analyst in salary administration equips someone in this position to counsel managers on other issues related to employee compensation. In this capacity, compensation analyst jobs often design executive compensation packages for high-level positions. The structure of a severance package for terminated employees may also fall under the compensation analyst’s responsibility. Whether the company offers a pension program is another related issue that typically requires the knowledge of a compensation analyst.
Comprehension of employment laws regarding fair labor standards and job classifications are also essential skills needed for compensation analyst jobs. Generally, compensation analysts are responsible for creating an equitable compensation system that complies with local and regional employment laws. The compensation system should also comply with company policy and strategic planning.