Compensation Analyst Job Descriptions, Average Salary, Interview Questions

What Does a Compensation Analyst Do?

Compensation analysts support the human resources and finance department by analyzing and determining each employee’s salary and benefits. This job requires professionals to have experience with compensation research and data analysis.

Compensation analysts are responsible for overseeing a company’s remuneration policies and programs. Some of their duties include analyzing positions to understand an employee’s scope of responsibilities, reviewing compensation data to ensure competitive pay, and managing salary structure to create a healthy balance between employee pay and the company’s financial performance.

This position requires the compensation analyst to be a human resource expert in employment costs, compensation analysis, and benefits. It is important for candidates to have a business background with basic knowledge of computer programs such as Microsoft Word, Excel, and PowerPoint.

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National Average Salary

Compensation analyst salaries vary by experience, industry, organization size, and geography. To explore salary ranges by local market, please visit our sister site

The average U.S. salary for a Compensation Analyst is:


Compensation Analyst Job Descriptions

Example 1

The job

  • Perform job evaluations and analysis of jobs, compensation benchmarking, data collection, base salaries and incentives to evaluate internal equity, external competitiveness, and legal compliance of global pay practices
  • Reviews and analyzes job duties to determine scope of work including assessing and evaluating jobs to determine grade, classification, and market value for new positions, as well as requests for compensation increase, structure, grade, and title changes
  • Provides analysis and counsel to management on compensation programs and initiatives related to pay structures, short term incentives, pay change recommendations, new hire offers, and wage and hour regulations
  • Continually evaluate for and implement process efficiencies
  • Examine compensation trends and develop recommendations supporting business initiatives
  • Assists in the development and implementation of salary administration, compensation policies, and variable pay plans (e.g., merit, annual incentives, bonuses, awards, sales commission, etc.) for salary administration including policy review and pay structure development
  • Assists with annual merit increases and other similar projects by working collaboratively with HRIS, Payroll, and cross functional teams to ensure project goals are achieved
  • Compiles salary survey submission files, performs global job matching, responsible for market pay system maintenance and administration, ensuring accurate market data and internal data validation. Responsible for auditing data on a regular basis
  • Acts as a main contact for day-to-day compensation matters, including monitoring and answering queries to a functional email inbox
  • Maintains and updates job description library and job data in appropriate HR systems for new Company roles and changes to existing roles, ensuring consistency among functions
  • Maintains HR data tools integrity by ensuring the accurate and consistent input of data. Performs regular audits and addresses data concerns
  • Coordinates and assists with human resource projects, programs, and special assignments
  • Ensures the confidentiality of sensitive information
  • Develop, analyze, and maintain complex Excel reports to support data analysis

What skills you bring

  • 2 to 4 years of previous experience with compensation function at a global company preferred
  • Experience utilizing compensation theory, principles, and practices to perform independent analysis of programs using market data
  • Must have advanced level Microsoft Excel skills
  • Above average analytical skills, especially in other MS Office suite products
  • Proficiency in HRIS systems preferably with Ultipro
  • Strong data mining and quantitative analysis skills
  • Must have strong quantitative, critical thinking, and problem-solving skills, with ability to research and analyze various types of data
  • Excellent verbal, written communication skills, presentation, and facilitation skills as well as interpersonal and consultative skills
  • Ability to use good judgment, be discreet and highly trustworthy, and demonstrate ethical conduct


  • Bachelor’s degree in Business Administration, Finance, Human Resources, or equivalent field from an accredited college or university
  • Certifications in compensation, general HR practice or related fields preferred, especially from associations such as SHRM, World @ Work, or similar

Example 2


  • Analyzing of all approved or proposed compensation plans, compiling all the source data and requirement needs in the Incentive Compensation excel spreadsheets
  • Troubleshooting and addressing all incentive questions that are provided from operational, human resources, clinician, and other teams in a timely manner
  • Maintaining detailed workflows and documentation of all incentive plans
  • Completing the annual true-up process for all incentives that are applicable to these bonus plans
  • Developing and implementing calendars for distribution of key compensation plan metrics, results, analytics
  • Reviewing and approving all discretionary incentive forms that are provided to ensure accuracy and precision
  • Develop recurring and ad hoc compensation reports, metrics and dashboards
  • Providing updates to stakeholders on statuses of completion of all incentive plan calculations weekly
  • Optimization and improvement in the intention of reducing and improving redundant and/or manual processes, making them more effective
  • Tracking and maintaining audit files for all payment files sent to the payroll department

Required skills and abilities

  • Proven analytical ability coupled with problem solving and time management skills with the aptitude to multi-task and self-manage through multiple priorities
  • Proficient in the Microsoft Office suite; advanced knowledge of Microsoft Excel required–including VLOOKUP, Index Match, Pivot Tables, Conditional Formatting and Macros
  • Identifying and quantifying risks and opportunities to develop strategies to mitigate risk and pursue opportunities
  • Ability to present financial information to a non-financial audience
  • Excellent communication, interpersonal, and presentation skills
  • Detail-oriented and able to perform in a high-pressure environment
  • Strong analytical thinking and problem-solving skills
  • Experience working with large amounts of data
  • Ability to create ad hoc type reports
  • Maintaining highest level of confidentiality
  • Taking initiative and be proactive in resolving problems while being able to communicate effectively and follow through in a timely manner

Required credentials

  • Bachelor’s degree in finance, accounting, healthcare administration, or a related field
  • Experience working with HR Systems (iCIMS and UKG preferred)
  • Report writing/creating dashboard experience
  • Expert Excel skills (Pivot Table creation)
  • 3-5 years’ experience in incentive compensation design and execution, in a fast-paced environment

Example 3

The Compensation Analyst participates in compensation surveys and performs job evaluation and analysis for all company positions.

Key responsibilities

  • Participates in salary surveys to obtain current data for job evaluations to ensure the Company’s competitiveness in the marketplace; compiles, analyzes, and evaluates survey data; maintains data sources in CompAnalyst and with internal stakeholders
  • Evaluates new positions using established methodology and determines grade and level assignment. Creates new job codes and titles for positions and maintains title integrity and job description library
  • Generates analytics for use by regional, functional, and business unit management to assist with compensation management decisions; Provides summary reports at the end of each measurement and/or merit increase cycle for management review
  • Reviews and signs off on all pay rate changes to ensure and validate consistency
  • Assists in the design and administration of training, policies, processes, procedures, and other communications including the annual merit cycle and short-term incentive administration
  • Works collaboratively with other functional areas including HR Systems, Real Estate, FP&A, and Payroll

Skills and knowledge

  • Survey and market pricing management
  • Intermediate excel skill such as the use of pivot tables, VLOOKUP, SUMIF, and COUNTIF
  • Exposure to Workday HCM and Advanced Compensation


  • 2+ years relevant work experience
  • Bachelor’s Degree in HR, Business Administration, Accounting, or equivalent experience

Sample Interview Questions

  • Describe what your typical workday would look like at this job.
  • What do you hope to achieve working here as a compensation analyst?
  • Could you describe some of the wage-setting projects you’ve been involved in? 
  • Why are compensation analysts considered an asset in a company? 
  • How do you approach determining salaries and benefits for employees? 
  • How do you solve problems relating to compensation expenses? 
  • If you were hired for this position, how would you evaluate the existing remuneration packages? 
  • What do you do to ensure you stay up to date with labor legislation changes? 
  • What do you believe to be the most important to establish a high employee retention rate?
  • How do you optimize labor costs? 
  • If an employee was underpaid, is it better to correct the mistake now or add it to next month’s payroll? 
  • What’s included in federal and local taxes withholdings?
  • How do you explain benefits and insurance details simply to employees?
  • What would you say is your biggest challenge working as a compensation analyst? 

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