Benefits and Compensation Professionals' Future to Hold Increased Responsibilities

July 26, 2005 ( and compensation professionals need to be prepared for a significant increase in responsibilities across many areas in the future, according to a new survey by the HayGroup.

A new report from the HayGroup aims to provide insight into the future of the benefits and compensation professions and it shows those in the fields expect their jobs to increase their responsibilities. The company said that benefits professionals “will need to either become more sophisticated and strategic or face the prospect of having their function completely outsourced.”

The benefits profession will continue to change as companies encourage increased employee participation in, and responsibility for, health care and retirement plans, the survey says. HayGroup says that there will be continued increases in consumer driven health care plans and retirement plans such as 401(k)s that direct investment risk to the employees. Additionally, 85% of participants said there will be an increase in creating incentives for employees to lead healthier lifestyles as a way of combating chronic illness, the survey said.

Regarding compensation professionals, HayGroup suggested that workers in that area will become more involved in the design and administration of incentive programs. Those surveyed agree: more than half of those surveyed (56%) said that those holding positions in compensation will become more responsible for administering incentive pay programs as well as more involved in market pricing or pay surveys (53%).

When those surveyed were asked to predict trends in the compensation profession over the next five years, 79% said that the profession would become more responsible for designing incentive pay programs. Additionally, 62% of respondents said the profession will be more involved in developing compensation budgets.

Three quarters (74%) of those looking to the future of the compensation profession told the HayGroup that they see an increase in compensation professionals’ responsibility for developing the organization’s compensation strategy. More than half of all respondents predicted an increase in the compensation profession’s responsibilities regarding involvement in legal issues, responsibility for recognition plans, responsibility for career pathing or leveling, and responsibility for performance management. HayGroup said this shows that “compensation professionals will be called to bring real value to the bottom line.”

When asked to predict where changes will occur, the most responses for “major change” were seen in the areas of understanding the business or industry (39%). However, change was predicted by a significant majority of respondents in many areas of the compensation profession including international or global compensation practices, executive pay, company performance-driven incentive plans, and stock ownership plans.

According to the survey, there is some predicted growth in both the benefits and compensation area. Sixty-four percent of those surveyed predicted increases in benefits professionals at their organization over the next three years while three-quarters of those surveyed predicted increases in compensation professionals over the next three years at their companies. Although some predicted marginal growth and other significant growth, most people seem to anticipate a growing workforce, but based on the significant increase in job duties, HayGroup questions how more time will be able to be spent in various disciplines with only slight staff increases, or no increases, in some locations.

HayGroup suggests three possibilities: continued outsourcing, more leveraging of technology for administration in the benefits and compensation areas, and sharing of accountability with other areas of the company such as management and finance. The company said that to stay competitive professionals in these areas must maximize the value they add to their companies.

The company surveyed over 200 people: attendees the WorldatWork conference and Chicago Compensation Association members. The participants identified themselves as: compensation director or executive (27%), compensation manager (23%), compensation analysts (17%), consultant (10%), benefits analyst or manager (6%), HR, but not compensation or benefits (1%), and other (17%). Many of those polled have been in the business for some time; half of the survey respondents have worked in the field for more than ten years, while another quarter (24%) have worked for six to ten years.