If you could get your hands on fresh salary data for the leading competitors in your industry, imagine what you could do with it…
- Set salaries with confidence so you can attract and retain the best talent.
- Craft a strong, fair compensation strategy that motivates employees.
- Empower your company’s leaders and managers to have more productive, data-backed compensation discussions.
…and more!
Current compensation survey data about your industry is invaluable to organizations—but how do you get your hands on it? Keep reading to find out what compensation surveys are all about—and how you can gain access to the most reliable, helpful information for your needs.
What is a compensation survey?
A compensation survey is your backstage pass to the intricate world of how organizations in a specific industry, size, or geographic area structure their salary and benefits. It’s more than just numbers; it’s a dynamic process involving collecting, analyzing, and comparing data from various participating companies. Picture it as a revealing exploration, shedding light on how businesses value and incentivize their talent.
Why are compensation surveys important?
Compensation surveys play a pivotal role beyond being a mere assortment of figures; they emerge as the cornerstone for shaping a robust salary structure. Picture them as strategic guides, offering insights into how your organization should maneuver within your market’s intricate landscape.
Moving beyond these immediate benefits, compensation surveys empower your organization to make strategic decisions about market positioning. Opting to “lead the market” is an invitation to innovation, allowing your business to set trends within the industry. On the flip side, choosing to “lag the market” provides a unique vantage point to learn from market pioneers, minimize risks, and capitalize on proven strategies, ensuring a more informed and calculated market entry. In essence, it’s not just about deciphering numbers; it’s about strategic positioning and informed decision-making in the dynamic terrain of compensation.
Using compensation surveys means your organization is being proactive about compensation, which ultimately translates into being better able to attract and retain top talent.
Who conducts compensation surveys?
Various groups or entities conduct compensation surveys, each offering unique insights into salary structures. Data algorithms and aggregators provide a comprehensive, data-driven overview, while industry associations offer tailored insights specific to specific industry sectors. Publicly shared data sources managed by governments contribute to a broader context of industry trends. For executives and charities, accessing required data through Proxy statements or charity 990 forms provides specific insights, albeit often with a slight reporting delay.
In essence, the diverse sources of compensation survey data paint a comprehensive picture, enabling organizations to make strategic decisions informed by a variety of perspectives. These surveys act as invaluable tools for understanding market trends, offering compensation that is considered competitive, and shaping effective salary structures.
- Survey Firms: Companies dedicated to survey data collection, offering purchasable data for employers’ use. Examples include Mercer, Radford, and Willis Towers Watson.
- Data Algorithms/Aggregators: Data aggregators like salary.com, Payfactors, and the Economic Research Institute utilize aggregated peer-driven data to complement and expand upon survey firm limitations.
- Industry Associations: Develop or subsidize compensation surveys to support members.
- Publicly Shared Data Sources/Government Sources: Government agencies and related institutions often post pay information or provide data upon request. This is often due to transparency laws such as the Freedom of Information Act (FOIA).
- Proxy Statements or Charity 990 Forms: Executives and charities can glean compensation insights from Proxy statements (disclosing top executive pay in publicly traded companies) and charity 990 forms (providing financial details for nonprofits), though these sources may have a reporting delay.
- Compensation Consulting Firms: Firms like MorganHR can help utilize your data sources appropriately, and effectively incorporate multiple data sources into your compensation structure(s).
How do employers navigate salary information and conduct comprehensive surveys?
Examining salary information is a standard practice for employers, particularly in light of U.S. antitrust laws prohibiting direct sharing of salary details. Many mid-sized and large companies routinely use aggregated data from third-party sources to assess prevailing compensation rates.
Adhering to legal restrictions that prevent price fixing, companies are barred from direct discussions about employee compensation to maintain fair competition. Nevertheless, within these legal confines, employers can responsibly gain valuable insights within their specific industry and within their size. Many turn to reputable third-party providers such as the Economic Research Institute (ERI), utilizing aggregated salary data. This practice offers companies a transparent and informative way to navigate compensation strategies.
Conducting a meticulous compensation survey requires thorough data collection, precise analysis, and a deep understanding of market dynamics and industry benchmarks. If you possess expertise in compensation intricacies, conducting the research yourself is a viable option, ensuring accuracy for well-informed decisions about employee salaries and benefits within your organization. Alternatively, if compensation is not your specialization, engaging a dedicated compensation consulting firm, such as MorganHR, is recommended for comprehensive and accurate use of your compensation survey data.
How should HR professionals navigate survey source selection and budget considerations?
Some HR professionals mistakenly purchase survey data without ensuring that it is the right fit for their company—an expensive misstep that can result in unusable or unreliable data. Not every survey house or data source will have survey data that aligns with your specific needs.
Budget constraints can also pose challenges, where companies may struggle to afford both consulting fees and survey costs. In such cases, you utilize slightly older, but aged, data while supplementing with newer data when available.
However, whenever feasible, we recommend partnering with compensation experts, such as those from consulting firms like MorganHR. When clients approach us, we consider all relevant factors to provide the best recommendations, whether a survey source, a data-aggregating tool, or even a pulse survey. Your philosophy guides the selection process, along with considering your peer group and preferences.
How To Be Responsible & Strategic with Your Survey Data Purchases
Survey data is expensive, and you should ensure that what you purchase is relevant and meaningful to your organization. To build or add to your resource library:
- Align with your compensation philosophy—know which industry to focus on. Survey sources have many different industry data cuts–ensuring that you are aligned with an industry that best fits your organization is important.
- Don’t jump the gun and choose the first big names you find on Google—do proper research on your survey sources to confirm that they have the data you need.
- Ensure that your data is prepped and ready to be used before purchasing survey data. This includes, but is not limited to, validating job titles, validating accurate compensation data, aligning your jobs to the survey data source’s scope chart, etc. Internal data cleanliness is crucial to ensuring a clear understanding of the scope of jobs before purchasing data.
- Review your strategy with leadership to obtain their buy-in. Consider stakeholder opinions on the industry, size, and geographic region components of the survey data cut you purchase. Obtaining their buy-in early can help to mitigate any negative reactions to decisions you make when they feel unheard..
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Survey houses typically release the newest annual data set for any given year in August. Some surveys are updated quarterly. Many larger survey houses offer year-old data releases at a discount—purchasing and aging older data can help you save money if you are on a tighter budget. Some organizations, like the Economic Research Institute, publish quarterly Compensation Forecast whitepapers that contain compensation structure growth numbers that can be useful in aging this older data, or even aging current data to lead the market.
If you consider this route, we still recommend consulting with a firm to ensure the proper use of this data so that you align appropriately with your compensation philosophy and strategy. However, this can be an effective route for more budget-conscious HR professionals.
With MorganHR, you get the exact survey data you need to make confident decisions.
At MorganHR, we set you up for success when it comes to compensation surveys, and we help you identify the most relevant and affordable options for you. We work with clients to score and evaluate the best tools based on your industry, size, peers, location, and where your talent is coming from (and going to) to obtain highly relevant compensation survey data.
When you work with us, you will know that you have the best data with which to build an effective and appropriate compensation structure. Using relevant compensation data, and updating it on a regular basis, will help you stay on top of market trends to help attract and retain qualified talent.
Our expert team has assisted numerous companies across many diverse industries, both nationally and internationally. We welcome the chance to demonstrate how we can assist you in refining your organization’s use of compensation survey data!
Schedule a call with the MorganHR team to get started today.
