Outsourced compensation planning: 7 questions to ask

by Employers Council Staff


Many high-performing HR professionals and departments struggle to make sustainable, consistent pay decisions, let alone during an era of volatile labor markets. Hybrid environments, tight competition for top talent, pay equity challenges and pay compression concerns add stress to the already complex task of compensation planning.  Outsourced compensation planning services can augment a team’s existing abilities and bandwidth to craft a thoughtful, data-driven plan. 

Employers Council has helped a wide variety of organizations — small start-ups, nonprofits, growing businesses, public sectors, multinational corporations — create and execute comprehensive compensation plans. Here are seven essential questions to get the most out of your outsourced compensation planning services. 

1. What services do I need? 

Compensation plans can make an HR manager’s job easier, but only if they are done well and accurately. You have to plan to plan! The first step to finding the right outsourcing compensation help is knowing exactly what you need. Evaluate your current compensation planning process. Where does your team tend to get bogged down? Where are you lacking experience? Do you have any compensation plan needs that demand certain niche expertise? Do you need a boost to get started (such as help updating job descriptions), an assist across the finish line (building an internal communication strategy, for example), or would you like to hand off the whole project?

2. Does this provider have broad compensation and HR knowledge…and any niche expertise I may need? 

It seems like an obvious point, but, yes, your outsourced compensation planning services provider should have not only compensation experience, but a broad base of human resources knowledge to boot. Compensation planning touches on most areas under HR’s purview, and context is everything. The most helpful providers draw on years of HR and compensation wisdom and also have consultants who specialize in particular challenges, including executive compensation, communicating with leaders and boards, and planning for pay equity across state lines.

3. Does this compensation planning services provider have experience in my industry? 

Knowing the ins and outs of a particular industry is invaluable to the compensation planning process, especially when it comes to job matching. Make sure to ask any potential providers if they’ve developed compensation plans for clients in your particular field. Will you need to factor in extra learning time or more internal reviews if not? The better route is to find a provider already familiar with your corner of the world. 

4. Does this provider use up-to-date and verified pay data?

We’ve arrived at the most important question you can ask, because your compensation plan will only be as good as the data that feeds it. You are looking for timely, verified, specific data sets. Ask how often a potential provider’s data is updated; two years ago is way too late. Data should come from a trustworthy source that uses employer reporting. (Payfactors and the Economic Research Institute are two well-regarded data sources Employers Council uses, for example.) Your provider should be able to tailor data to your industry, organization size, and region. General data isn’t helpful! 

5. Can this provider help me not just craft a compensation plan but execute it? 

Most organizations are concerned not only with creating an actionable compensation plan but being able to explain that plan to their organization’s leadership and employees. A great plan means nothing if front-line managers are unable or unwilling to carry it out. Even the most thoughtful plans can get waylaid by employee confusion and discontent (pay compression conversations can be particularly sensitive) without clear explication. Early communication can set expectations for possible up-coming changes. Letting a trusted third-party provider lead internal plan communications can also help diffuse suspicions that pay decisions are subject to personal whims or playing favorites. 

6. Can this provider meet additional needs that might arise during the planning process? 

Compensation planning can lead to other questions. Many other questions. Can your potential provider help you problem-solve as you go, or will you need to go somewhere else for recruiting, payroll and benefits, strategic planning, legal services and other resources as needs arise? 

7. Does this provider fit my budget? 

Finally, it’s only a fit if you can pay for it. Make sure you have an open conversation about your budget, your potential partner’s pricing, and what is included (and excluded) in their services. Don’t be surprised by add-on fees later on!

Employers Council covers it all!

Whatever your compensation planning needs are, Employers Council can help. Our consultants can carry out the entire compensation planning process or step in to assist for a section of the project. Our team is made up of experienced compensation professionals who share their diverse knowledge in a collaborative environment—it is rare a question comes up that one of our consultants hasn’t handled before. Our team includes consultants who specialize in executive compensation, plan communication strategies, presentations to leadership and more. Our planners are deeply familiar with a wide range of industries, fields, and organization types. 

Known for our fair and transparent pricing, Employers Council only uses accurate, verified and regularly updated data sources, including Payfactors and  the Economic Research Institute, as mentioned. Our compensation planning team is just one part of the Employers Council community of 200+ attorneys and professionals. If (or when!) your compensation planning process uncovers other questions, our consultants can refer you to the resources you need to keep going — and growing.

Ready to dive in? See our full range of Compensation Planning services, and talk to us about your needs.

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Employers Council Staff