How to Use Compensation Survey Data to Set Competitive Salaries
Unlock the Power of Compensation Survey Data
If you could access fresh compensation survey data from leading competitors in your industry, imagine the possibilities:
- Set salaries with confidence to attract and retain top talent.
- Craft a fair, competitive compensation strategy that motivates employees.
- Equip leaders with data-driven insights for better compensation discussions.
Reliable compensation survey data is invaluable for businesses. But how can you access the most relevant, high-quality data? Keep reading to learn everything you need to know about compensation surveys and how to use them effectively.
What Is a Compensation Survey?
A compensation survey provides insight into how organizations structure salaries and benefits. More than just raw numbers, these surveys involve collecting, analyzing, and comparing data from various companies. They reveal how businesses compensate employees, helping you position your pay structure competitively.
Why Are Compensation Surveys Important?
Compensation surveys go beyond salary data; they serve as a strategic tool for informed decision-making. They help organizations:
- Develop a robust salary structure.
- Make data-backed compensation decisions.
- Choose the right market positioning—leading, matching, or lagging behind competitors.
- Attract and retain top talent.
- Ensure fair and equitable pay practices.
By proactively using compensation survey data, your organization stays ahead of market trends and prevents costly turnover.
Who Conducts Compensation Surveys?
Various organizations collect and distribute compensation survey data, including:
- Survey firms: Companies like Mercer, Radford, and Willis Towers Watson collect and sell salary data.
- Data aggregators: Platforms such as Salary.com and Payfactors analyze peer-driven data.
- Industry associations: Many provide customized salary surveys for their members.
- Government sources: Agencies publish publicly available salary data.
- Proxy statements & charity 990 forms: Public companies and nonprofits disclose executive pay.
- 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..
|
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.
