Compensation is one of the largest budget items for organizations so having good salary data is critical. Salary surveys are useful to organizations in a number of ways such as establishing pay rates, identifying salary trends and ultimately ensuring that you remain competitive and are making market-guided decisions when it comes to pay.
During this time of year, HR professionals are inundated with invitations to participate in and purchase a variety of compensation surveys. While there are an increasing number of free—often Internet-based—salary data sources, HR professionals should carefully weigh whether to use this type of information since they may include less reliable data that is self-reported or does not have a rigorous data collection process despite claims otherwise. A good rule of thumb for compensation professionals that choose to use information from free sources is to compare it with at least 2 other data sources to validate it.
Here are 7 great questions to ask before selecting a salary survey for your organization:
- How long has the survey been run and what is the percentage of repeat participants?
Consistency of participants allows for survey stability as well as the ability to trend data from year to year. The percentage of repeat participants will provide a good indication as to whether the survey accurately trends the data. Repeat participation rates over 80% are considered to be very reliable.
- Are survey participants identified?
Surveys that publish the name and location of the participating organizations have more credibility than those that do not and also help you to determine if the salary comparisons are appropriate for your organization by allowing you to verify that the geographic, industry and employer size data is relevant to your recruiting needs.
- Is survey data submitted directly by the organization or by individual job holders?
The answer to this question can have a major impact on the validity of the data. Some surveyors go directly to individual job holders for input while others require participation at the organization level. Studies have shown that the accuracy of data provided directly by individual employees varies greatly and can skew survey results. Surveys that collect data directly from organizations provide a higher level of objectivity and data accuracy.
- Are survey job descriptions detailed?
Look for survey job descriptions that provide enough detail to match to your own organization’s job descriptions and avoid surveys that only provide job titles. Although you won’t always find an exact match for your organization’s job, the more detailed the survey description is, the more effective your analysis will be.
- Are multiple cuts of data provided for industry, sales volume and geography?
The cost of labor varies by industry, geographic location and company size. Even within the same state, there can be significant differences. In New England, we see this play out in various areas such as when we compare how some jobs pay in Boston versus Route 128 versus Southern New Hampshire.
- Are you contacted by the survey administrator regarding your input?
Survey auditing is a critical step to ensuring an accurate survey. Quality survey companies will review each submission and contact participants to clarify any identified errors or anomalies in the data submitted.
- Does the survey provide total compensation in addition to base salary statistics?
Total compensation analysis and additional data statistics such as variable pay and total compensation offer a better job comparison for most organizations.
High quality salary surveys are a valuable tool for determining your organization’s pay rates. You can rest assured that TSG’s Benchmark Survey is accurate, reliable, confidential and meets all of these high-quality standards.