What Does a Compensation Analyst Do?

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  • Written By: Meghan Perry
  • Edited By: Amanda L. Wardle
  • Last Modified Date: 15 November 2019
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A compensation analyst is responsible for ensuring that workers within a company are receiving competitive compensation and benefits in order to attract and retain high-quality employees. One way to do this is to research the pay offered for similar jobs and to develop salary and benefits structures accordingly. Salary surveys can be conducted either internally or externally. These analysts usually work in the personnel or human resources departments of businesses, governments, or school systems.

Future predictions and prospective changes in salaries may be studied by a compensation analyst. He or she may collect salary data and then interpret or analyze this information. Such information may be shared in the form of a report with management or members of a hiring team.

The compensation analyst also looks at existing and possible future jobs and categorizes them. Positions may be classified according to importance to the employer or the level of responsibility carried by the job. An analyst may also write job descriptions to attract prospective employees. If there is a human resources website for the organization, the analyst is sometimes in charge of updating and maintaining the site.

Leadership skills are important for a person in this position, as he or she often has to guide the management team through compensation-related issues. In addition to salaries, analysts sometimes work with rewards programs. These could include bonuses, incentives, or recognition. Compensation analysts may have to communicate and implement these types of programs.


A compensation analyst is often required to work with all types of people in all levels of the organization, including different job levels and personality types. This means that the analyst must be an effective verbal communicator. Written skills are also important.

Other skills necessary to effectively perform this type of position include being organized, detail-oriented, and having strong analytical skills. This is especially helpful when interpreting data. A compensation analyst must also know the most effective procedures for recruiting employees. Familiarity with the laws and regulations related to veterans' preferences, fair labor standards, and affirmative action is also important.

Generally, a bachelor's degree is the minimum education requirement, but some organizations require a master's degree in business administration (MBA). In order to be a more desirable candidate, certification opportunities are also available. The most common is to become a Certified Compensation Professional.


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