Growth Trends for Related Jobs

What Are the Duties of a Compensation Analyst?

careertrend article image

Attracting and retaining talented employees is part of a compensation analyst's job. They are primarily responsible for ensuring that employee compensation and benefits are equitable and competitive. A compensation analyst develops appropriate pay structures for the organization based on information collected from within and outside the organization. Their work affects the entire corporation.

Survey Statistics

A compensation analyst surveys the existing pay packages in the organization and also collects data from other organizations to establish whether employees are being paid reasonably. The survey does not just cover salaries; it also reviews benefits such as house allowance, mileage, bonuses and non-monetary compensation such as stock options. The survey assists the analyst to structure a compensation package for the organization’s employees that is comparable to what other employees in other organizations earn.

Analyze Information

Analysis of compensation trends is vital to the sustainability of the organization – it is the compensation analyst’s duty to determine that the organization is on the right path. An organization needs to sustain its employees’ compensation packages. Therefore, an analyst reviews current and predicts future compensation trends to assist the organization to make prudent decisions. On the basis of the analysis, the organization can determine how much it can reasonably afford to pay its employees, considering factors such as a forecasted rise in the standards of living.

Develop Policies

The work of a compensation analyst contributes to the development of employee hiring and retention policies. Organizations have to utilize their human and cash resources efficiently, so there must be a proper balance between compensation and the financial performance of the company. A compensation analyst uses the information collected on previous, current and projected compensation in the organization to inform the management on the number of employees it can comfortably hire and maintain profitability. Management can use the information to develop incentive programs that ensure long-term employee commitment.

Evaluate Jobs

A compensation analyst classifies and structures pay within the organization. Compensation analysts conduct job evaluations to determine the value of a position based on the responsibilities of the employee; positions are assessed against the value of other positions and the financial performance of the company. As a result, the compensation analyst configures pay grades within the organization. He determines the pay for new job entrants during probation and the percentage increase in salary after confirmation. The compensation analyst also determines the pay for new positions created in the organization.


Joseph Petrick has been a writer and editor since 2003. He writes career, business and education articles. His work has appeared in several online publications including Career Today. Petrick holds a Master of Arts in philosophy/economic anthropology from Pennsylvania State University.

Photo Credits