HR salaries: It pays to specialize

January 3, 2012
in HR / Employee Relations

Organizations are increasingly recognizing the value of human resources and its strategic role in helping recruit, develop, and reward talent. In turn, salaries and the opportunity to earn incentives have increased for HR professionals, according to a report by Culpepper Compensation Surveys & Services that examined compensation and incentive eligibility for HR jobs in the United States. Here is Culpepper’s anaylsis of the report:

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Total Cash Compensation by Job Level

In general, there is a strong correlation between job level and compensation. To demonstrate this relationship, we aggregated all HR jobs by job level to show how total targeted cash compensation varies across job levels. The median total targeted compensation for a Senior Executive of HR ($273,000) is approximately two times higher than a Senior Manager of HR ($136,910) and over five times greater than an entry-level, Associate HR job ($50,120).

Pay for Advisory Level Jobs Can Exceed Management Level Jobs

As job levels increase from associate level to senior executive, compensation does not always increase in a consistent and predictable pattern. Pay levels for skilled experts in non-management advisory level jobs often equal or exceed pay levels of first-level leadership positions. In critical job functions, companies will often pay advisory level employees at market rates close to or above supervisor and manager level positions. For example, the median total targeted compensation for an Advisory HR job ($96,170) is about 20% higher than an HR Supervisor ($80,400).

Total Cash Compensation by HR Function

Table 1 below reports the total targeted cash compensation for five select HR job functions:
HR General

  • Benefits Analysis
  • Compensation Analysis
  • Employee & Labor Relations
  • Employee Training & Development
  • HRIS Analysis
  • Recruiting & Talent Management 

Within each job function, we provide aggregate breakouts for the following combination of non-executive job levels:

  • Director Levels: Director (8) and Senior Director (9)
  • Manager Levels: Supervisor (5), Manager (6), and Senior Manager (7)
  • Advisory Levels: Advisory (3) and Senior Advisory (4)
  • Individual Contributor Levels: Associate/Entry (0), Intermediate (1), and Senior (2)

Across most non-executive job levels, cash compensation for HR specialties is higher than HR General. The median total targeted compensation for employees at the Individual Contributor Level in an HR specialty is about 20% more than HR General Individual Contributor Level positions. Total cash compensation for Directors and Managers in specialized HR jobs averages between 8% and 13% higher than directors and managers in general HR jobs.

For most job levels, Compensation Analysis leads the way with the highest levels of total targeted cash compensation.

Wide Range of Pay Within Specific Functions and Levels

Compensation within specific job functions and levels varies considerably. The wide range spread within each job function and level combination in Table 1 is due to a variety of factors that influence compensation, including, but not limited to, geographic location and company size.

Geographic Location Impacts Compensation for Most Non-Executive Jobs

Pay levels can vary significantly between different geographic locations. In addition to job function, it is critical to consider geographic location when benchmarking pay rates and developing salary ranges for most non-executive level jobs. For example, the median total cash compensation for Individual Contributor Level HR jobs is nearly two-thirds higher in San Francisco, CA ($84,700) than Wichita, KS ($51,000).

Company Size Impacts Compensation for Higher Level Management and Executive Jobs

In addition to geography, company size is also an important factor. There is a strong correlation between company size and compensation, particularly for Director and Executive level positions. For example, the median total cash compensation for a Senior Executive of HR is more than twice as much in a large company with more than 10,000 people ($387,700) than in a small company with less than 100 people ($159,100).

Eligibility for Incentives

Historically, HR employees were less likely to be eligible for incentives than employees in other job functions. However, in recent years, HR has expanded its role beyond administrative duties to become more of a strategic partner with top management. In turn, we have seen an increase in both the percent of HR employees eligible for incentives and the amounts targeted. There is a strong correlation between job level and incentive eligibility, particularly for long-term incentives.

In conclusion, when benchmarking pay, it is critical to consider a variety of factors that influence compensation, including job function/specialization (i.e., responsibilities) and job level (i.e., skills, scope of leadership, experience). It is also critical to consider the impact of geographic location for most non-executive jobs and company size for management and executive positions.

Data Source: 484 participating organizations in the Culpepper Human Resources and Operations Compensation Survey U.S. Database as of July 1, 2011.

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