“Today, it is clearly impossible to motivate and manage employees and keep them happy using straightforward and standard pay schemes. You have to be creative when negotiating and modelling etc” – Soufiane Hilali, head of compensation and benefits. Compensation and benefits: exploring a position that is increasingly central to companies – PAY JOB
In the new corporate professions, compensation and benefits functions have become a linchpin in companies. Well-known in Europe for the past two decades, they were mainly used by large groups, but recently SMEs have also become aware of their strategic benefit. In the following article, find out why compensation and benefits roles are increasingly popular in companies.
“[...] legislative changes and the development of countries at different rates make it difficult to for companies to implement a harmonised remuneration policy. As such, C&B staff need to constantly adapt their compensation policy to their company’s specific context” – Yves Rault, EMEA compensation and benefits director at Dassault Systèmes. "The role of compensation and benefits in supporting group growth – Benefits - Les Echos Executives."
“Comp and ben” is short for “compensation and benefits.” Compensation and benefits managers are therefore responsible for implementing a compensation policy that balances employees’ expectations and their company’s limitations.
Compensation and benefits managers implement their company’s pay policy. They manage employees’ remuneration (fixed and incentive compensation), decide on attractive salaries to recruit new talent, negotiate costs and budgets to secure new remuneration schemes at good rates, ensure new remuneration schemes are found and align remuneration and remuneration schemes at the time of company acquisitions or mergers. Compensation and benefits managers are therefore remuneration experts who are familiar with all the different remunerations in their company, regardless of the hierarchical level!
Compensation and benefits managers work in a constantly changing and competitive professional environment. They are on the front line in the war for talent, where remuneration is one of the main appeals. They also have to comply with complex legislation and remain efficient, especially in times of crisis when companies have to rein in their payroll expenses.
Compensation and benefits managers also play a key role in managing pay at international level. They need to be familiar with the legal business requirements of the various company locations so as to provide optimum local pay or, on the contrary, to standardise remuneration policies at global level.
Incentive compensation allows compensation and benefits managers to put their creativity to full use in their payroll work and find the best remuneration schemes. In addition, compensation and benefits managers manage employee performance assessment strategies and calculate their incentive compensation.
They have a thorough understanding of pay packages and have to regularly find new direct or indirect compensation schemes to attract and retain talent. They are familiar with all the remuneration schemes (performance-based bonuses, profit-sharing etc.) and need to be especially rigorous when calculating remuneration, as just one error can affect the private lives of employees.
Compensation and benefits managers are said to straddle HR and finance because they have two jobs: they master HR issues and their profoundly human dimension, and they’re also great with numbers!
They are proficient users of statistical tools and data analysis tools, understand accounting and tax issues, and are always on the lookout for legal, HR and financial developments at national and international level. The first compensation and benefits positions were developed in the banking sector.
To find a good compensation and benefits profile, you therefore need to look for people who have experience in management control as well as a background in HR.
Compensation and benefits managers know how to be discreet as they have access to sensitive and personal information, they are great negotiators and are very comfortable with figures. They are extremely thorough and have to be creative in order to reinvent their company’s salary policy each time and adapt to complex circumstances.
Compensation and benefits managers are likely to prove instrumental in the years to come, given the economic and social context companies are evolving in today.
Since 2020, the COVID-19 crisis has had a devastating economic impact worldwide. Some companies are having to make savings to absorb the financial losses and it is pay policies that could be one of the first things to pay the costs of this austerity. Compensation and benefits managers will therefore have to be creative to keep their companies attractive while bearing the economic constraints imposed by their companies.
Remuneration is one of the main expenses in a company because salaries are expensive. Payroll contributions are very high and make it difficult for employees to increase their salaries. Compensation and benefits managers therefore need to closely examine all the compensation schemes available to take advantage of those that benefit from tax deductions and attract talent.
Compensation and benefits managers have to implement a remuneration policy that keeps employees highly motivated and gradually work towards personalising remuneration; but they also have to make their remuneration policy known to those employees who do not always know what benefits are available to them. The Individual Social Review (BSI) is therefore an essential part of any remuneration expert’s toolkit.
A professional equality index to be published every year ensures the wage gaps between women and men are scrutinised. Compensation and benefits managers must provide remuneration solutions such as salary catch-up programmes to reduce these gaps and change mentalities that have not yet grasped the issues of equal pay.
“It’s not very trendy to talk about recognition, to insist on the importance of knowing how to say thank you...but at the end of the day, this basic act of politeness has too often been neglected. In a changing world and in a globalised economy, career management is also a core element of employee motivation and retention” – Yves Rault, EMEA compensation and benefits director at Dassault Systèmes. « The role of compensation and benefits in supporting group growth – Benefits - Les Echos Executives. »
Originally, compensation and benefits managers mainly worked with major international groups that had to juggle different pay policies. However, SMEs are also becoming more and more international to develop their business and are facing the same talent war as large companies. This means the compensation and benefits function is likely to be found in all companies.
In business, it’s not just financial concerns that count. Employees expect much more from a company than just pay. They also expect their company to show recognition for the work they do. Compensation and benefits managers have a role to play here because they are close to staff. They can establish a discourse and create an attitude that highlights the recognition given by their company beyond financial concerns.
With remuneration becoming increasingly personalised, compensation and benefits managers will have to be very careful and propose certain pays on a case-by-case basis, while bearing in mind companies’ economic performance objectives at global level.
For the moment, compensation and benefits managers simply uses data analysis tools. But the arrival of big data with its promise of predictive analysis to predict resignations could eventually become part of the daily routine of compensation and benefits managers, who will have to do everything possible to avoid resignations.