Half of Reward teams never grow beyond one person

"It's a lonely role."

We hear versions of this from Reward Leaders all the time – it was even the reason we built the Reward Room, our community for Reward professionals.

If you're the only Reward person in your company, you own pay and benefits for everyone, with nobody else in the business doing the same job to sensecheck ideas with.

So how long does it stay that way? 

When do companies make their first Reward hire, how long before that person has a team around them, and what does a typical team look like as the company grows?

We analysed Ravio's compensation data to find out, tracking when companies bring in their first compensation hire and how the total rewards team structure evolves from there.

And, to understand what that looks like in practice, we spoke to Andreea Lupu – she was once the only Reward specialist in a 1,000-person company and now supports consultancy clients of all sizes with compensation projects.

The first Reward hire

When do companies make their first Reward hire?

Among companies that make a dedicated Reward hire, the median company does so at 325 employees.

Below 500 employees, that hire is very rare – only 8% of companies in our dataset with 100-500 employees have a dedicated compensation role. 

That rises to just over half (54%) of 500-2,000 headcount companies, and 86% of 2,000-10,000.

For Andreea, Compensation & Benefits Architect at Meaningful, the 325 figure fits. 

"That's definitely what I see also in the market, bringing in a dedicated total reward hire at around 300 employees," she says.

Before that point, Reward work can be covered by other people in the business.

"Usually in smaller companies the total rewards role is split,” Andreea explains. “Someone from operations manages benefits, someone from the HR team looks after compensation. The responsibility is distributed.”

So what sparks that first Reward hire?

“It’s when the hiring pace gets faster,” Andreea says. 

"The more employees you have, the more likely you are to hire across multiple countries, which means you’re handling more market data, adding more statutory benefits, dealing with more equity laws.”

“And the business risk gets higher too – once you're losing multiple candidates or employees because you didn't compensate properly, the recruitment time and money adds up.” 

“That’s when you really need someone to own the strategic direction for employee compensation.” 

That aligns with what we see in the data – that first Reward hire tends to come during a period of faster company growth. 

Tech companies roughly triple in size in the two years before their first Reward hire, from a median of 99 employees to 305. Growth peaks in the six months just before the hire, when headcount rises 39%, and slows steadily afterwards.

By 500 employees, Andreea would "definitely" expect to see a total reward specialist in the business.

"Almost no matter what company you have, if you care about having the right people on your team, encouraging the right behaviours, and keeping those employees with you, you will need someone focused on compensation,” she says.

Interestingly, when we break the data down by industry, it’s Media, Gaming, and Entertainment companies who start building their total reward team the earliest – at a median headcount of 160 employees, vs the 325 overall. 

For Andreea, it’s all about complexity.

“Gaming is a more niche sector with a need for very specific skills, which means it’s often hard to find the right talent and know how to compensate them,” she explains.

“So you need a dedicated specialist earlier who can build the right strategy, find the right market benchmarks to compare against, and manage a more complicated compensation structure – because you’ll likely be pulling on levers like competitive employee benefits much earlier than other tech companies will.” 

Who is that first Reward hire?

The first Reward hire is typically a generalist.

Our data shows that of the first three seats in a Reward team, around 60% are held by broad, all-round roles: Compensation & Benefits Specialists or Managers (27%), Rewards Managers (17%), and other total rewards generalists (16%).

“I usually see companies hiring a total reward specialist first, someone who can build the compensation philosophy and strategy but also deal with the data analysis, managing benefits and equity programmes, and has strong communication skills,” says Andreea.

“You want someone who’s middle-senior too, otherwise someone has to train that person, which is hard if there's no one with the expertise to do so.”

Our job level data backs that up.

P3 and P4 (mid-senior IC levels) are the most common levels across all Reward hires, making up 53% between them.

But, that first Reward hire doesn't always stick

Not every company keeps its first Reward hire.

19% of companies that have made a Reward hire no longer have anyone in the role. 

At companies with 100-500 employees (where that first hire is normally made), that rises to 29%.

Andreea has seen this happen most in smaller companies.

“I don't think you need an in-house reward specialist for 100 people,” she says. “So probably what happens is they had a pain point – something changed within the company, or hiring and retention became tricky – and they needed direction on employee compensation. 

“Once that pain is solved, that person leaves, and isn’t backfilled.”

“If you’re in that scenario, I’d bring in a consultant for a short-term project instead to give you direction, because it won’t be a full-time role to manage compensation at this point.”

For those larger companies who haven’t backfilled the role, Andreea feels it comes down to the internal visibility of the Reward role. 

“It’s hard to promote your work as a reward specialist,” she explains. “If a salesperson brings in a big contract, that’s celebrated in public. But if you negotiate a benefits contract down by the same amount, it usually needs to stay confidential. I really think we need to do a better job at connecting our work to business success to ensure the role is seen as valuable.” 

How Reward teams grow after the first hire

Once that first Reward person is in place, they're often on their own for a long time – that lonely role is absolutely visible in our data.

In fact, only about half of companies that make a Reward hire have ever had a second Reward person in the team at the same time.

And where teams do grow, it's slow. Only 12% of companies add a second person within a year of the first hire, and 27% within two years.

For companies whose total reward team does grow, the second Reward person arrives at a median of 787 employees. 

The third arrives at 1,243, and the fifth at 1,872.

Across the dataset, the median Reward to employee ratio is 1:389 – one Reward person for every 389 employees.

So how far can one person realistically stretch?

"I did work for a company that had a thousand employees and I was the only total reward specialist,” recalls Andreea. “But it was only possible because I had colleagues across the business supporting various areas – the operations team owned benefits, a data analyst was available for compensation analysis, and so on. I could be the only one in a thousand people because I had help from all directions.”

Without that support, she'd put the limit much lower.

“I think you could be the only total reward specialist if you’re a generalist for maybe 500 to 600 employees. After that, you’d need others to pick up specific areas.”

That's close to what we see in the data, where the second Reward person typically arrives at 787 employees and the third at 1,243.

Which roles are added as the total reward team grows?

As we’ve seen, generalist Reward roles are typically the first hire. After that, it’s common to see a Head / Director / VP of Rewards in the early hires too, typically as the second team member.

Reward business partners and broader compensation and benefits roles typically join as the fourth person in the team. Analysts and benefits specialists join around the eighth.

Andreea's experience of how the team builds out is slightly different.

“Usually I see that generalist total reward role first, but then a benefit specialist is the second hire because benefits become the biggest burden – and someone who can manage contracts can save a lot of money for the company,” she explains.

“It might be because that initial generalist hire then becomes the ‘head of’ and sits above additional hires – but I don’t often see a Head of Reward and only one Total Reward Specialist in a team.” 

Whilst the order differs, we do see benefits specialist as one of the most common Reward roles in our dataset, making up 20.6% of Reward roles – second only to broader compensation and benefits titles.

What this means for building your Reward function

As we’ve seen, Reward is typically a team-of-one for a long time. 

The first dedicated hire comes at around 325 employees, during a period of fast growth, and only about half of companies ever add a second Reward person. For those that do, it happens at around 800 employees.

Looking behind the numbers, for Andreea, building a Reward team starts with timing.

In her experience, the first hire usually comes in response to a problem: people are leaving, hiring gets harder, or pay starts to look inconsistent.

"Ideally, you shouldn't wait until that point, because it's already too late and it will take months to fix," she says.

In the early stages, that doesn't have to mean a full-time hire. “If you can’t justify a full-time hire, look at part-time roles or compensation consultants to get advice and build the right foundations early.” 

The EU Pay Transparency Directive (EUPTD) adds to the pressure to get these foundational structures in place early, to ensure fair and consistent compensation decisions.

"The EU Pay Transparency Directive asks you to be clear and transparent about compensation packages, so it's becoming more difficult to manage this area," says Andreea. "I think you have to think even earlier than before. And more seriously, because there are legal risks on top of the hiring and retention impact."

Finally, if you're currently operating as that Reward team-of-one, our Reward Room community is where Reward professionals can get much needed peer-to-peer support from Andreea and 500 other Reward Leaders – we’d love to see you there.

FAQs

What does a typical total rewards team structure look like?

Most total rewards teams start as a team of one. According to Ravio's HRIS data from European tech companies, the first Reward hire is usually a mid-senior generalist who covers both compensation and benefits. Among companies whose Reward team grows, the team typically reaches two people at 787 employees, three at 1,243, and five at 1,872. Specialist roles, such as Reward business partners, compensation analysts, and benefits specialists, are usually added later.

When should a company hire its first compensation or Reward person?

Ravio data shows that, among tech companies that make a dedicated Reward hire, the median company does so at 325 employees, usually during a period of fast growth. Below 500 employees, a dedicated Reward hire is still rare: only 8% of companies with 100-500 employees have one, rising to 54% at 500-2,000 employees. Compensation & Benefits Architect Andreea Lupu recommends bringing in a compensation consultant or part-time support before that point, rather than waiting for pay problems to force the hire.

Who should be the first hire in a Reward team?

The first Reward hire is usually a broad generalist role. In Ravio's data, Compensation & Benefits Specialists or Managers, Rewards Managers, and total rewards generalists make up around 60% of the first three seats in a Reward team. Most Reward hires are mid-senior individual contributors: P3 and P4 levels account for 53% of levelled Reward hires.

When should you hire a second person into your Reward team?

Among companies whose Reward team grows, Ravio data shows the second Reward person typically joins at 787 employees. Only about half of companies that make a Reward hire ever add a second person. Andreea Lupu, Compensation & Benefits Architect at Meaningful, suggests one generalist can realistically cover around 500-600 employees. That depends on the support available from other teams, the number of countries, and how complex the benefits programme is.

What is a typical Reward to employee ratio?

The median Reward to employee ratio is 1:389, or one Reward person for every 389 employees, according to Ravio's HRIS data from European tech companies that have made a dedicated Reward hire.

What roles are in a compensation and benefits team?

Common roles in a compensation and benefits team include total rewards generalist, Rewards Manager, Compensation & Benefits Specialist or Manager, Head of Reward, Reward business partner, compensation analyst, and benefits specialist. In Ravio's data, benefits specialists make up 20.6% of Reward roles, second only to broader compensation and benefits titles.

Where does the Reward function sit in HR organisation design?

The Reward function usually sits within the People or HR team. In Andreea Lupu's experience, the first Reward hire often works alongside people business partners on strategy. They rely on People operations, finance, and recruitment for support with benefits administration, data, and hiring.