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Setting Compensation Budgets

How to Play a Key Role in Setting Compensation Budgets

By Staff Writer

During PayScale’s recent webinar, titled, “How to Play a Key Role in Compensation Budgeting,” PayScale director of customer service and education, Stacey Carroll, MBA, SPHR and HR experts Frank A. Cania, SPHR and Betty Richardson, CCP, explain why, in today’s economy, smart compensation planning and budgeting is more important than ever.  And, they explain how you can bring that message to your company.

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How clear is it to your company leadership that putting effort and energy into efficient compensation planning makes sense? If your organization is suffering under the pressure of lost profits and shrunken budgets, it needs you to be the champion for a fine tuned compensation budget plan.

 

Establish Your Credibility

One of the basic first steps to playing a key role in compensation budgeting is to establish your credibility. You want to be viewed as an expert in your organization and prepare yourself to give sound advice and make smart choices about compensation budgets. The following is a list of tips from these leading HR experts on how to boost your status as a compensation expert.

Deepen your knowledge. The knowledge you need includes awareness of the regulatory environment in which you are operating. If you work in the manufacturing industry, you have different issues to handle than in the healthcare industry. But, both industries require specific know-how if you want your company to excel and avoid legal trouble.

Gain skills. After increasing your knowledge about your company’s industry, you’ll want to develop the skills needed to put that knowledge to work. These skills include a variety of abilities, such as preparing informative, easy-to-read reports, creating slide decks for presentations, disseminating important information to employees, allowing for discussions of the information and finding simple ways to answer people’s questions.

Perform consistently. As the subject matter expert at your company, you must consistently produce useful contributions to the salary budgeting process. Your knowledge and skills should set you apart from everyone else at the company. The goal is to be seen as the single source of information related to determining salary increase budgets and compensation budgets. Hopefully, because of the value you bring to the table, no one would consider having a discussion relating to compensation budgets without you. That’s credibility.

Speak the language. One of the keys to being an expert in anything is speaking and understanding the language of your craft, which in this case is HR and specifically compensation. But, you must also speak the languages of those around you. How well do you dialogue with marketing, sales, production, purchasing and operations? What about finance?
 
Know your numbers. Getting familiar with the financial situation and pressures in each of the departments at your company may sound like a lot of work. But, in order to be a credible business partner, you need to have a working knowledge of the numbers that drive the business. From budgets to forecasts to ROI, you want to understand what your colleagues are talking about so you can offer appropriate advice and support. And you must know how to read and understand the reports that describe the health of the company – the balance sheet and the income statement.
 
Be Strategic. As a business partner, you’ll be expected to have a strategic perspective on the business. How does your compensation budgeting impact each of the separate departments in your company, and the company as a whole? You’ll want to be able to notice when a business decision would create short or long term problems then offer another solution. As you show your expertise, people will come to you with more strategy questions. Plus, since you are in touch with people from various departments, you can bring people together, get them to connect and increase each other’s success.

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Do you have any salary range topics you would like to see covered here on Compensation Today? Write us a comptoday@payscale.com.

Are you doing a salary review or compensation benchmarking project? PayScale provides up-to-date, external salary market data you can use right now. And, it is specific to the education, skills set and experience your employees. Give a PayScale demo a try.

 

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