The Compensation Profession Is Becoming Increasingly Hybrid

As a compensation professional, you don’t need me to point out jobs are evolving faster than ever. At this point, you’re likely already spending more time pricing jobs than you’ve done in the past.

You’re probably well aware of the forces that impact the evolution of jobs. In our fast-paced, technology-driven world, organizations increasingly demand workers who have disparate skill sets and experience in multiple domains. For example, mobile application developers must understand programming, design, data analysis, user experience and core marketing skills.

Burning Glass Technologies recently conducted research on the rise of hybrid jobs. They found in 2018, one in eight job postings was a highly hybridized role, a role that combines skill sets that never used to be found in the same job (e.g. marketing and statistical analysis, design and programming). Additionally, when they looked at jobs within a 12-month period from 2017 to 2018, they found that hybrid jobs grew nearly twice as fast as jobs overall.


Source: Burning Glass Technologies

Hybrid jobs present a challenge to employers, from a hiring perspective and a job pricing perspective. But pricing hybrid jobs is not the focus of this article. The reason I am writing this article is to point out how this trend of job hybridization affects the very professionals responsible for job pricing and hiring.

What’s changing in the field of compensation

Traditionally, compensation is characterized as a scientific discipline. A compensation professional must be trained to get many technical details right, including evaluating data sources for benchmarking compensation for positions, creating and maintaining accurate job descriptions, maintaining sound pay processes to ensure internal equity and competitive pay and staying on top of city-, state- and federal-level regulations that govern pay.

While all this work has been and will continue to be important, the world of work has changed a lot in the past decade and employers today need a new set of skills from their compensation team.

What sort of workforce trends impact compensation today?

First, the legal landscape is evolving: multiple federal agencies, states and cities are currently developing new regulations to address gender/racial wage gaps. Many states have put out new minimum wage legislation.

Workers’ expectations are shifting, too: As millennials make up a greater portion of the U.S. workforce, workers have started to demand pay parity and greater transparency from employers around how pay decisions are made. Additionally, public forum reviews have become an increasingly important element in the consideration set when someone applies to a job, thanks to the rise of employer/salary review sites like PayScale, Comparably, WageSpot, Paysa and others. These days, prospective candidates can easily look for information about an employer’s compensation, benefits and culture. Thus, organizations must pay close attention to their employer brand and pay brand.


Additionally, many executives and board members have decided to pay closer attention to compensation strategy, as they’ve become aware of the importance of getting pay right in order to hire and retain talent in a competitive market.

Finally, as new technology and industries mature, jobs themselves will remain dynamic and evolve at a rapid clip.

We’ve reached an inflection point where it makes sense to pause and ask some questions about the very nature of the profession:

  • What are the most important roles a compensation professional should play in an organization?
  • What skills do compensation professionals need to develop in order to be successful in the next decade?
  • What types of tasks should compensation professionals spend more time on, as we head into the next decade? What should they do less or eliminate completely?

We decided to investigate these questions in our 2019 Compensation Best Practices Report. We asked several thousand compensation and rewards professionals to tell us how their jobs will change over the next two to three years. The question was: “Will you spend more, the same, or less time going forward on the following activities?”

  • Job evaluation, market pricing
  • Explaining pricing methodologies to managers
  • Participating in surveys
  • Creating, analyzing and presenting results to business audience
  • Activities that further pay transparency, such as training managers and employees about their pay process
  • Conducting a pay equity audit
  • Revamping the compensation plan

In this blog post, we’ll share the results of the survey and provide some insights on the evolution of the compensation profession.

Where Compensation Professionals Plan to Spend More time In the Near Future

Analytics and storytelling. Furthering pay transparency. Job evaluation/ market pricing. Ensuring pay equity.


Source: PayScale 2019 Compensation Best Practices Report (CBPR)

Creating, analyzing, interpreting and/or presenting analytics results to a business or exec. audience. 

Going forward, data analysis and storytelling will become a bigger part of a compensation professional’s job. Fifty-three percent of survey respondents in the CBPR mentioned they expect to spend more time analyzing data and presenting analytics results to business stakeholders going forward.

Why is analytics and data-driven storytelling more important today?

Because everyone is paying greater attention to compensation, including the C-suite, managers and employees themselves. Thus, compensation professionals plan to spend more time educating these stakeholders about the work that they do.

Compensation professionals must possess, or quickly gain, the ability to effectively communicate the compensation strategy, the finer details of the programs themselves, as well as how it ties to the business strategy. Sitting head-down at a desk benchmarking jobs and running analytics is no longer the norm in today’s compensation world,” says Marc Mullis, Founder of Payformance Partners.

Executives, for example, are more interested in understanding how their investment in compensation — typically 70 percent of expenses — affects key people objectives, such as increasing productivity and reducing attrition of high performers. It is the compensation professional’s job to be able to present the data in a consumable fashion and present a coherent narrative and recommendations to business stakeholders.

Activities to Further Pay Transparency


Photo by João Silas on Unsplash

Fifty-four percent of survey respondents in the CBPR say they plan to spend more time in the next two years on activities to further pay transparency.

This makes a lot of sense. After all, even if you and your team develop the most amazing compensation package in the world, if employees haven’t heard the facts, they may still think they’re underpaid. In fact, PayScale has surveyed employees and found that four in five employees think they are underpaid.

If increasing pay transparency is a goal you and your organization is pursuing, I have one piece of advice for you: take a moment to discuss with your leadership team what you really want to achieve when you say you want to improve pay transparency. Pay transparency is usually a step to a bigger goal: to remove any doubt from employees’ minds that they are being paid fairly, so they can focus on doing their best work.

For example, transparency does not have to mean disclosing everyone’s salary to everyone else at your company. Rather, the goal could be to make sure managers and employees understand your company’s philosophy around pay, how your organization has defined fair pay and the processes you used to determine pay.

So, what information should you communicate? This depends on your culture. But at the very least, we recommend you communicate with hiring managers and employees the what, the how, and the why of pay.

What: This includes the amount an employee is paid and the salary range for the position.

How: This is your pay processes. For example, data sources you use, how you define your market and your competition, how often pay decisions are reviewed and adjustments are made.

Why: This is your pay philosophy, your values as a company.

[For tips on how to talk to different stakeholders ranging from executives to employees about compensation, download the guide: Communicating Compensation]

Job Evaluation/ Market Pricing

Additionally, nearly half of all respondents say they expect to spend more time in the future evaluating their jobs (47 percent).

Why do compensation pros expect to spend more time here? Because jobs are evolving faster and becoming more unique. Here at PayScale, clients often ask us how to price new jobs and hybrid jobs that have not existed before within their organization. Sometimes, clients create brand new roles due to emerging business needs. Other times, they combine two roles previously staffed by two people into a new, hybrid role in order to gain cost-efficiencies.

Additionally, pressure from stakeholders (executives, boards, employees and shareholders) around pay equity has driven compensation teams to examine and update their job descriptions. After all, having up-to-date job descriptions and accurate job levels are prerequisites to a pay equity analysis.

Ensuring Pay Equity

In the CBPR survey, we found 46 percent of organizations plan to spend more time in the next couple of years conducting pay equity analysis, while another 46 percent said they will spend the same amount of time. About 30 percent of organizations we surveyed in the CBPR have plans to conduct both racial and gender equity analysis in 2019.

Moving forward, communication skills, business acumen and technical skills will all be equally important

In the past, compensation was all about the numbers and the science. Today, compensation has become a hybrid role that sits squarely at the intersection of people strategy and business strategy. The new world of compensation requires compensation professionals to collaborate more with hiring managers, executives, boards and other stakeholders to gather input, ask questions and at times, push back and assert their point of view.

Successful professionals will be equally skilled in the technical aspects of compensation (e.g. analyzing data, pricing jobs), understanding business requirements, communicating to various stakeholders and making recommendations to update/improve a compensation plan.

I realize that some of these skills may not be in your comfort zone today. But, if you invest in developing these skills, you will be able to play a bigger role in shaping the future of your organization and any future organization you wish to join.

Tell Us What You Think

Based on your perspective, how is the role of a compensation professional changing? Tell us what you think in the comments below or on Twitter.