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Compensation Audit

Compensation Audit

A compensation audit is a comprehensive review of an organization’s pay philosophy and strategy and associated compensation practices. The goal is to ensure that the organization’s compensation practices are aligned with their philosophy and strategy, and that they are fair, equitable, and compliant with relevant laws and regulations.

During a compensation audit, the organization’s compensation policies, procedures, and practices are reviewed and analyzed to identify any areas of concern or potential risk. The audit may also include a review of employee data, although not usually to the extent of recommending changes to programs. 

Companies value a Compensation Audit because:

  • Competitive compensation is a powerful tool for attracting top talent. When companies conduct audits, they can adjust their compensation strategies to align with industry standards and attract skilled professionals.
  • It ensures that pay practices are fair and equitable. By examining how employees are compensated, companies can identify any discrepancies or inequalities among individuals performing similar work.
  • Compensation is not just about numbers; it reflects a company’s values and priorities. An audit ensures that compensation aligns with the organization’s overall strategy and culture.
  • Ensuring compliance with labor laws and regulations is crucial. A compensation audit also helps identify any potential legal risks related to pay practices, allowing companies to address them proactively.

Our experience in Compensation Audits includes:

  • Deep-dive into employee data to determine if the company’s variable pay plan practices were aligned with intent.
  • Recommendations for development of a new job architecture to help reduce turnover amongst professional and technical employees.
  • Recommendations for changes to promotion and early career salary adjustments thus improving retention of new hires.
  • Finally, reviewing HR strategies and objectives along with current compensation programs and practices to develop a phased approach to change.

Our Compensation Audits are conducted by Senior and Senior Staff Consultants and overseen by a Managing Partner.  We’ll work with you to determine exactly what the scope of work would be and ensure your specific concerns are addressed in the process.  Each audit is customized to the individual client. Additionally, by hiring Alliance Compensation you have an actionable framework with a timeline to execute your priorities and make a business case to better align your compensation programs and policies.

A Compensation Audit can result in utilization of any of our Services. See all services at https://alliancecompensation.com/services/. View related testimonials at Home – Alliance Compensation. Contact Nancy Ellington for more information, Our Team | Alliance Compensation. Finally, here are links to related topics in our Blogs: Why Should You Conduct a Compensation Audit; Think Outside the Box; Follow the Leader.