What Does a Compensation Analyst Do?
A compensation analyst plays a key role in helping organizations maintain competitive, fair, and compliant pay practices. They analyze compensation data, market trends, and internal salary structures to ensure employees are paid equitably and in line with industry standards. By balancing cost control with talent attraction and retention, compensation analysts support both strategic and operational HR goals.
This role involves frequent collaboration with HR, finance, and leadership teams. Compensation analysts participate in salary benchmarking studies, support job evaluations, and contribute to annual compensation cycles such as merit increases or bonus planning. They may also help assess new roles, provide data for compensation planning, and ensure pay transparency compliance.
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Compensation Analyst Core Responsibilities
- Analyze internal and external compensation data to evaluate pay structures
- Conduct job evaluations and salary benchmarking using survey tools and market data
- Support compensation programs, including merit cycles, promotions, and bonuses
- Collaborate with HR and business leaders on pay recommendations for hiring and internal movements
- Maintain job descriptions and help manage job architecture and leveling frameworks
- Monitor compliance with pay equity, FLSA classification, and other compensation regulations
- Prepare compensation reports, dashboards, and data presentations for leadership
- Assist with the implementation of compensation software or systems
Required Skills and Qualifications
Hard skills
- Data analysis using Excel, HRIS, or compensation tools (e.g., MarketPay, Payfactors, Radford)
- Strong understanding of job evaluation, market pricing, and compensation models
- Familiarity with regulatory frameworks including FLSA, EEO, and pay transparency laws
- Experience interpreting salary surveys and compensation databases
Soft skills
- Analytical thinking and data storytelling
- Attention to detail and organizational skills
- Strong written and verbal communication
- Collaboration with HR, finance, and leadership teams
Educational requirements
- Bachelor’s degree in human resources, finance, business, or a related field
Certifications
- Certified Compensation Professional (CCP) credential preferred or encouraged
Preferred Qualifications
- 2+ years of experience in compensation or HR analytics
- Experience supporting global or multi-state pay structures
- Familiarity with HRIS systems (e.g., Workday, SuccessFactors, ADP)
- Exposure to equity or incentive compensation planning
National Average Salary
Compensation analyst salaries vary by experience, industry, organization size, and geography. Click below to explore salaries by local market.
The average national salary for a Compensation Analyst is:
$75,500
Sample Job Description Templates for Compensation Analysts
Entry-Level Compensation Analyst
Position Overview
An entry-level compensation analyst supports HR and finance teams by collecting, organizing, and analyzing compensation data. They help maintain pay structures, participate in salary surveys, and ensure that job classifications and salary bands are accurate and up to date.
Responsibilities
- Assist in compiling compensation data from internal systems and external surveys
- Support job matching and job description audits for benchmarking purposes
- Maintain compensation records, spreadsheets, and internal documentation
- Participate in compensation survey submissions
- Help prepare data for annual merit or bonus cycles
- Monitor FLSA classifications and assist in compliance reviews
Requirements
Hard skills
- Proficiency in Excel (VLOOKUP, pivot tables)
- Basic understanding of job evaluation and salary benchmarking
- Exposure to HRIS or compensation software is a plus
Soft skills
- Strong attention to detail
- Analytical mindset with a willingness to learn
- Effective communicator and team collaborator
- Organized and responsive under deadlines
Education
- Bachelor’s degree in human resources, business, finance, or a related field
Senior Compensation Analyst
Position Overview
A senior compensation analyst designs and manages compensation programs that support talent strategies and maintain internal equity. They lead job evaluations, salary benchmarking, and policy development to support strategic pay decisions across departments.
Responsibilities
- Conduct complex job pricing using external surveys and internal compensation models
- Evaluate new and existing roles for grade alignment and market competitiveness
- Advise HR business partners and managers on pay recommendations and structures
- Lead merit and incentive compensation processes
- Develop compensation dashboards and reporting for leadership
- Ensure compliance with pay equity laws, FLSA, and transparency standards
Requirements
Hard skills
- Advanced Excel and data analysis skills
- Familiarity with compensation tools like MarketPay, Payfactors, or Radford
- Knowledge of pay structures, geographic differentials, and incentive plans
Soft skills
- Consultative communication with HR and leadership
- Project management and prioritization
- High-level problem-solving and attention to data integrity
- Ability to explain compensation data to non-technical audiences
Education
- Bachelor’s degree required; master’s or CCP certification preferred
Lead/Principal Compensation Analyst
Position Overview
A lead or principal compensation analyst sets compensation strategy, leads complex modeling efforts, and ensures the organization’s pay practices are aligned with business objectives and legal standards. This high-level role advises executive leadership and mentors junior analysts.
Responsibilities
- Design and refine enterprise-wide compensation structures and salary bands
- Lead executive or global compensation initiatives
- Model total rewards scenarios for M&A, equity plans, or new programs
- Guide compensation policy development and compliance frameworks
- Serve as subject matter expert for HRIS and survey strategy
- Coach and review the work of junior analysts and HR partners
Requirements
Hard skills
- Compensation strategy, modeling, and analytics
- Deep expertise in regulatory compliance and executive comp design
- Proficiency in compensation modeling tools and advanced Excel functions
Soft skills
- Strategic advisory presence with executive stakeholders
- Mentorship and team leadership
- Ability to distill complex analysis into actionable insights
- Strong judgment in sensitive compensation matters
Education
- Bachelor’s degree required; master’s or CCP credential strongly preferred
Compensation and Benefits Analyst
Position Overview
A compensation and benefits analyst manages both salary structures and employee benefit programs. They help ensure total rewards offerings are competitive, compliant, and cost-effective by analyzing pay and benefits data and supporting annual enrollment or vendor review processes.
Responsibilities
- Benchmark compensation and benefit offerings using market data
- Support annual merit, bonus, and open enrollment cycles
- Assist in analyzing benefit plan costs, utilization, and design recommendations
- Partner with HR and finance on total rewards reporting
- Monitor compliance with ERISA, ACA, FLSA, and other relevant laws
- Manage benefit vendor relationships and communications
Requirements
Hard skills
- Compensation benchmarking and benefits plan analysis
- HRIS and benefit administration platform experience
- Knowledge of healthcare, retirement, and wellness programs
Soft skills
- Data accuracy and confidentiality
- Clear written communication for employee-facing materials
- Strong organizational and project coordination skills
Education
- Bachelor’s degree in HR, business, or related field