Certified compensation professionals can help businesses connect employee wages and benefits with business strategy.
One of the most expensive assets every company possesses is their human capital. Employees make or break a company – either driving it to innovation, adaptation and success, or driving it into the ground. Wages account for a significant portion of every company’s budget; for service providers, nearly 100%. Assuring staff is compensated fairly, aligned with skills, experience, and market conditions, and that payroll drives your strategic plan forward is critical to business success.
For many organizations, compensation is an afterthought. You calculate wages based on need versus available talent. Benefits, perks, and other rewards evolve over time. Few companies, especially small to medium-sized businesses, have a specific, detailed compensation plan. If your goal is to attract and retain talent, a compensation professional can help develop a strategic plan that aligns wages and benefits with business strategy, for today and into the future.
What is a certified compensation professional?
According to the Society for Human Resource Management, there are several certification programs for compensation management. The most widely recognized is the WorldatWork’s CCP (certified compensation professional) designation. It evaluates a professional’s ability competencies for a total rewards strategy. Coursework includes:
- Job analysis
- Documentation and evaluation
- Market analysis
- Accounting and finance, and
- Variable pay strategies
Certification requires several years’ experience and study. WorldatWork includes extensive coursework and 9 exams to receive Certified Compensation Professional (CCP) status.
Other companies have a CCP on staff to constantly monitor rewards including compensation, benefits, job descriptions, market evaluations, and strategic planning.
Once accredited, these professionals can work within an organization’s Human Resource department or consult. For the smallest of businesses, consultation may be the best way to access a CCP. Other companies have a CCP on staff to constantly monitor rewards including compensation, benefits, job descriptions, market evaluations, and strategic planning.
What does a CCP do?
If you bring on a CCP to your business, initially they may spend a lot of time benchmarking. They’ll examine job descriptions, assuring they’re current and accurately reflect the work being performed. With these, they analyze whether the compensation program aligns with market conditions and demand in your region. A CCP will continuously monitor existing job descriptions and work with hiring authorities to create them for emerging positions.
They may develop:
- Overall job categories or a structured, tiered program
- Salary ranges for new hires and for financial incentives and advancement of existing staff members
Strategizing how to tie pay to performance is another area of expertise: CCPs look at a range of reward programs, from the most basic annual reviews, to bonuses, commissions, and other employee incentives. These professionals often oversee performance evaluations, even informal ones, to assure employees are rewarded as appropriate for career milestones and achievements. They make overarching recommendations of best practices and can develop specific rewards programming for the organization.
Another area for analysis and recommendations will be total compensation, including
- Benefits, like healthcare coverage and paid time off
- Perks, like volunteer time off
- Bonuses and performance incentive programming
By some estimates, benefits cost up to a third (or more) of an employee’s overall compensation. Factoring these into the overall compensation program helps illustrate value to the employee and delineate cost to the organization.
Regulatory compliance is also managed by a CCP. These professionals are trained in compensation law at the federal and local level. They assure policies are aligned with the Fair Labor Standards Act, comply with any local legislation, and assure non-discrimination in compensation and benefits.
For sales professionals, compensation tied to rewards and goals requires a more nuanced approach. This can include creating formulas, determining and assigning territories or quotas, sales modeling, and more. The goal will be to provide equitable earning opportunities as well as create an incentive program that drives excellence.
For executives, aligning compensation with the strategic goals of the organization includes more than golden parachutes. The CCP must have a broad knowledge of:
- Market conditions and trends
- Regulatory and tax compliance
They will also need to address shareholder questions and concerns with strong communication and negotiation skills.
A certified compensation professional works with management to align programs with the business’ strategic plan for today and into the future. As the organization plans for growth, they provide data to forecast needs and costs. Leveraging available resources — including modeling software, in-house and external databases, and other tools — they anticipate cost projections, where talent will be plentiful, and how to overcome shortages if necessary.
A certified compensation professional works with management to align programs with the business’ strategic plan for today and into the future. As the organization plans for growth, they provide data to forecast needs and costs.
Diversity, equity and inclusion
The CCP will work closely with any DEI initiatives in an organization. In addition to moving toward gender wage parity, they analyze wages, benefits, and employee categories to help businesses achieve equity in compensation. As companies develop equity, the CCP can help the organization benchmark, plan, and fulfill its goals.
Behind the scenes, these professionals are keeping job descriptions, employee categories, and performance evaluations current, relevant, and executed in a timely manner. They drive company culture with programs that are transparent and assure parity — not just for similar jobs, but for similar role categories within the organization.
Communication is key
For all the analysis and planning involved with compensation management, the position isn’t simply a bean counter. These professionals actively interact with every level of staffer, from entry-level to the Board of Directors. They leverage outstanding communication skills to translate their knowledge and vision into actionable steps for individual staffers as well as the organization overall. On any given day they may be communicating with new hires about the starting wages and benefits, then shift to the C-suite to discuss planning for the future.
Certified compensation professionals may get their start in the human resource department, but many have a background in finance. In every organization, talent is a high value commodity: fair and equitable compensation is key to attracting and retaining an engaged, high performing workforce.
Working from the C-suite to the ground level, a CCP has the power to affect and improve employee experience as well as plan for, drive, and execute company success. Organizations that don’t have the ability to keep a CCP on staff should might consider upskilling a current HR employee for certification or working with a consulting firm., A CCP may be an excellent choice to manage the rewards employees receive for their service as well as develop and administer the organization’s strategic plans for growth.