Compensation Administrator Careers: Salary & Job Description

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A compensation administrator's median salary is around $108,000, but is it worth the education requirements? Get the truth about the job duties and career prospects to decide if it's the right career for you.
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Pros and Cons of a Compensation Administration Career

A compensation administrator (or compensation manager) is a human resources (HR) specialist who ensures that a company's workers are paid fairly for their time. Weigh the pros and cons of being a compensation administrator to determine if this career is right for you.

PROS of a Compensation Administration Career
High earnings (median annual wage of $108,000 as of 2014)*
Wide range of job opportunities (employed in nearly all industries)*
Pleasant work settings (clean and comfortable office environments)*
Meet people of different cultures and backgrounds (the workforce is multicultural and diverse)*

CONS of a Compensation Administration Career
Lowest projected employment growth of all HR managers (about three percent from 2012-2022)*
Involves handling tense situations (resolving disputes and payment issues)*
Requires extensive work experience in the field*
Heightening education requirements (advanced degrees are becoming increasingly prevalent)*

Source: *U.S. Bureau of Labor Statistics.

Career Information

Job Description and Duties

Companies and organizations employ compensation administrators to develop and maintain employee payment systems. In this role, you must have a strong grasp of compensation law to ensure that your company is in compliance with regulations like the Employee Retirement Income Security Act. Administrators may conduct salary surveys to make sure their companies are offering wages that are comparable to current salary trends. They may also be responsible for running benefits programs, including health benefits, 401(k), stock ownership, bonus rewards and profit-sharing plans.

Day-to-day duties might include preparing and distributing documents that inform employees of updates to compensation or benefits policies. When employees have problems with pay, compensation administrators are responsible for resolving the issues. These workers typically work 40-hour workweeks, though you may have to put in extra hours to resolve negotiations or complete special projects.

Salary and Job Outlook

Earnings for compensation administrators vary greatly by industry as well as level of experience and education. While the U.S. Bureau of Labor Statistics (BLS) reports that compensation managers earned a median wage of approximately $108,000 as of May 2014, there was a wide variance in pay between the highest- and lowest-earning workers. The bottom ten percent of compensation administrators earned about $58,000 per year, while the top ten percent took home a median of over $187,000. The highest-paying industries, such as oil and gas extraction, typically employed fewer compensation administrators.

Human resources managers are needed in almost all industries, particularly in companies and enterprises, local governments, hospitals and insurance carriers. But employment was expected to grow at a slower-than-average rate of three percent from 2012-2022 for compensation administrators, in particular. Many of the new jobs available will be in outsourcing firms, which are often contracted to develop compensation programs (www.bls.gov). But despite fewer new employment opportunities, companies will be looking for expertise from compensation managers who can help choose and administer benefits policies due to healthcare reform and rising healthcare costs.

What Are the Requirements?

Education Requirements

A bachelor's degree is typically required for a career in compensation administration, according to the BLS. You might choose to study a major relevant to the field, like human resources management, which is often available as a concentration in Bachelor of Business Administration programs. While a 4-year degree may suffice, the BLS reports that employers seeking graduate degrees are becoming increasingly common. One example is the Master of Business Administration in Human Resources Management. These programs often include courses in HR technology, compensation, finance and accounting, strategic management and global business.

Experience and Additional Requirements

In addition to obtaining education, compensation administrators are generally required to have years of experience in human resources. They may start out as entry-level workers and rise through the ranks to a supervisory role; however, even entry-level workers may need some familiarity with human resources, and many employers prefer those who've completed work-study or internships. Given that regulations are continually changing, compensation administrators must also maintain current knowledge of legislation, such as through self-study or continuing education, to ensure their employer's programs remain compliant. Other assets beneficial for this career include:

  • Strong written and verbal communication skills
  • Confidentiality when working with sensitive information
  • Leadership skills and the capacity to oversee workers of various backgrounds
  • Solid proficiency with computers and digital communication tools
  • Pleasant yet persuasive personality

Job Postings from Real Employers

Since compensation administration is an upper-level HR position, the main requirements are, at minimum, a bachelor's degree coupled with 5-10 years of experience in compensation. Many job postings for these professionals also stressed a preference for applicants who are certified by professional associations like the International Foundation of Employee Benefit Plans (IFEBP). Following are a handful of compensation administrator job listings to give you an idea of the education, experience and skills employers were looking for in March 2012:

  • A medical center in New York sought out a benefits and compensation manager with communication and presentation skills, pension law expertise and healthcare experience. Certified Employee Benefits Specialists were encouraged to apply.
  • An HR firm in Virginia advertised for a compensation manager with 8-10 years of experience in domestic and international compensation program planning.
  • A Chicago staffing firm advertised for a compensation manager to develop a human resource management system for a manufacturing business.
  • A Tampa Bay accounting firm was seeking a compensation manager with 10-15 years of experience to prepare job descriptions and determine compensation for its employees. Candidates with a Certified Compensation Professional credential were preferred.
  • A university in Virginia posted a listing for a compensation manager with strong persuasive skills to evaluate compensation data and design compensation structures.

How to Get an Edge in the Field

As CareerBuilder.com job listings from March 2012 indicate, employers might prefer compensation managers with certification. The IFEBP awards the Certified Employee Benefit Specialist (CEBS) designation to candidates who complete eight courses and pass exams (www.ifebp.org). It offers the Compensation Management Specialist designation to those who complete three courses and pass exams specific to compensation concepts. The Wharton School of the University of Pennsylvania governs all certification courses offered by the IFEBP; they may be completed online, through independent study, on the job or in the classroom at one of nine nationwide colleges.

You might also benefit from learning a foreign language, such as Spanish. This can broaden your ability to communicate with workers. It might also expand your locational placement opportunities.

Alternate Career Paths

Training and Development Manager

If you wish to work with employees, but want a higher salary for the same education, consider becoming a training and development manager. These individuals plan ways to prepare workers to be as qualified and efficient as possible on the job. The median salary for this position as of 2011 was approximately $92,000. The job prospects are also much higher than a compensation administrator's: The BLS predicted an employment increase of 15% from 2010-2020. You can enter this area of work with only a bachelor's degree, but employers may prefer candidates with graduate-level education.

Human Resources Manager

Another option if you wish to make more money working with personnel within an organization is to become a human resources management. This more generalized position entails the same education and experience as a compensation administrator, but may lead to higher earnings (the BLS reports that HR managers earned a median salary of about $99,000 as of May 2011). Jobs for HR managers were expected to grow at a much faster rate than those of compensation administrators at 21% from 2010-2020.

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Independence University

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Grand Canyon University

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Penn Foster High School

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Liberty University

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