Compensation and Benefits – All about the Carrot, not the Stick!

To understand the whole area of Compensation and Benefits (C&B) you really need to understand the evolution of administrative and passive “Personnel Management department” to a more dynamic and specialised “Human Resource Management” team.

With increased free market competition at global level, the proliferation of technology and knowledge-based industries, Human Resource Management has become a critical function of most large organisations.The Human Resources team has evolved one stage further – If you review larger companies you will find that they are typically divided into three sub-divisions: HR business partners (HRBPs), HR centers of excellence, and HR shared services.C&B is one such center of excellence and is being given an increasing amount of attention and with good reason!

And what exactly is C&B? As a sub division of HR, C&B it is focused on employee compensation and benefits policy-making. While compensation and benefits are tangible, there are intangible rewards such as recognition, work-life and development. Combined, these are referred to as total rewards.


Employee compensation and benefits are divided into four basic categories:

  • Guaranteed pay – a fixed monetary reward paid by an employer to an employee. The most common form of guaranteed pay is base salary. Guaranteed pay also includes cash allowances (housing allowance, transport allowance, etc.), differentials (shift differentials, holiday differentials) and premiums (overtime, night shift, etc.)
  • Variable pay – a non-fixed monetary reward paid by an employer to an employee that is contingent on discretion, performance, or results achieved. The most common forms of variable pay are bonuses and incentives
  • Benefits – programs an employer uses to supplement employees’ compensation, such as paid time-off, medical insurance, company car, and more
  • Equity-based compensation – Shares or pseudo share programs an employer uses to provide actual or perceived ownership in the company which ties an employee’s compensation to the long-term success of the company. The most common examples are share options

Businesses now recognize the direct link between a “happy employee” and the ultimate profitability of the business. Companies that are winning awards for HR effectiveness have worked out that there is a direct link between company/employee performance and rewards and between company culture/values and total reward. Well being initiatives are now common place in companies and form an important part of the suite of benefits on offer.The C&B function now plays a critical role not only in both talent acquisition but also in talent retention. While a few consultancies such as Mercer, Willis Towers Watson and AON have been providing C&B advice for many years, the in-house C&B function arrived in Ireland officially at the start of the noughties and has been evolving ever since.

Initially, foreign multinational businesses had one specialist in the C&B area but as businesses have grown and we have seen new entrants to the market, so too has the size of these teams. Most Irish Multinationals have reluctantly followed suit. One or two PLC’s have yet to realise the relevance of the function and it shows! In the last 5 years, we have seen increasing specialization in C&B and several well-known MNC’s are splitting their teams into two – one team to look after Compensation and the other to look after Benefits.


If you are hiring a C&B professional or looking for a C&B role here are things to note:

  • At any one moment in time, there are approximately 8 C&B’s related roles being advertised across Ireland – with a few under the radar
  • Because of the down-turn in the economy from 2007 to 2013, there was an under investment in the C&B space resulting in a shortage of people with 6 – 8 years’ experience. If you are in this space – good news for you!
  • Roles at the 120k plus level are in short supply – approximately 10 per year across Ireland
  • If you are in Benefits Consulting and looking to broaden into C&B – you will probably have to do so in two stages not one!
  • People with EMEA C&B experience will find more opportunities than those who have purely Irish C&B experience
  • If you have some experience in EMEA C&B, this can be a great springboard for working overseas – then you can always return
  • Most of the C&B roles are based in Dublin so if you are living outside the pale, be ready to compromise on salary


In summary, we have come along way since the old-fashioned days of the “Personnel Management” team. It is no longer about the stick, it is about the carrot!

As a result, the demand for C&B professionals will continue to offer exciting career paths for those that would like to apply their numeracy and analytical skills to a career in the ever changing and dynamic HR profession. As a leader in the Compensation and Benefits recruitment space, I would be delighted to assist with any questions that you may have.