How to Build Comp Teams

Dear Calcy,

The team that oversees and manages incentive compensation for our business has experienced a high amount of turnover over the past several months, but optimizing the comp program is a key focus area for us this year.

How should we be thinking about hiring compensation managers who can both efficiently manage day-to-day tasks and set us up to better optimize and scale?

Thanks for your advice,

Help Wanted

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Dear Help Wanted,

Believe it or not, this question is actually a pretty common one, especially because experience for compensation managers can live under a variety of functions such as Sales, Finance, and Human Resources – which of course makes it hard to know exactly where and how to kick off your search.

When do you start your candidate vetting process, there are two crucial questions you should ask:

Question 1: Have They Really Done the Job You Need Them to Do For You Before?

When hiring compensation managers, it’s essential to focus on candidates who have specific experience in variable or incentive compensation . This experience is crucial because it not only confirms the relevance of their background, but also indicates that they understand the nuances of the role – and are enthusiastic about it. Candidates who have spent multiple years in incentive compensation jobs are more likely to be familiar with both the challenges and opportunities that come with the job.

To identify candidates with incentive comp experience, you should look for titles such as "Sales Compensation," "Sales Incentive Compensation," "Compensation," and "Commissions." However, it's important to note that many relevant professionals might have broader titles under sales operations (SalesOps) or revenue operations (RevOps), such as "Sales Ops Analyst/Manager." In these cases, it's necessary to qualify candidates by asking how much of their previous roles were dedicated to incentive comp. Managing incentive compensation is a role that individuals typically commit to after managing it for an extended period, so there is often high turnover among those new to the role who may not fully understand what it entails. If a candidate's incentive comp experience was just one of many responsibilities, or if they haven’t managed it for long, there’s a risk they haven’t fully internalized the demands of the role.

Question 2: Have They Managed Incentive Compensation in a Similar Environment?

It’s also important to assess whether candidates have managed incentive comepnsation in environments similar to yours. Key factors to consider include the number of compensation plans, the nature of these plans (such as whether they are consumption-based), the number of payees, and the state of your source data (whether it’s organized or messy, for instance, and what systems are in place).

If a candidate has managed var comp through similar circumstances and has led successful changes to improve processes, they are more likely to guide your team towards optimization and scaling over the next 12-18 months. During the interview process, focus on the main challenges your team is currently facing and use these as case studies to evaluate the depth and relevance of the candidates' experiences. This approach will help you identify candidates who can not only handle daily tasks, but also drive long-term improvements in your compensation program.

By keeping these crucial questions in mind as you search for and vet candidates, you’ll be setting your team – and your business – up for a successful hiring and employee experience.