Salary surveys provide benchmark information on rates of pay that organisations can use to measure their compensation packages against the external market. Applicable to both current employees and new hires, salary surveys provide the basis of internal pay frameworks and budgeting of future salaries.
So how do we choose which surveys to use?
Traditional vs. crowdsourced methods
Crowdsourced surveys: free but questionable
Crowdsourced data is self-reported information submitted by individuals to job and recruitment websites such as Glassdoor, membership organisations, or recruitment agency surveys. The latter may only look at advertised salaries, rather than reflecting the final remuneration package agreed on hire.
Self-reported surveys rely on job titles, but the difficulty is that job titles can have different meanings in different organisations. An HR Officer at one organisation may have much the same role as an HR Manager at another.
Reputable survey vendors: a credible investment
Formal compensation surveys, on the other hand, use data gathered directly from organisations. Every survey provider has their own method of job evaluation to ensure a balanced comparison between jobs of a similar level, rather than relying on job titles.
In the case of traditional surveys, there is a robust process in place to validate submissions, including getting in touch with participants to review any anomalies in their data. Survey companies use analytical tools to mitigate data distortion, removing outliers and ensuring no one company is over-represented.
While there is usually a fee to participate, many organisations are willing to make the investment in order to receive the most accurate data possible. This is essential if we want our benchmarking activities to have credibility.
How to choose a survey provider
When deciding which survey provider is suitable for your organisation, there are a number of factors to consider.
1. Industries to benchmark against
A general industry compensation survey can provide you with a broad view on the marketplace for most of your roles. However, you may gain more relevant insight from an industry-specific survey. A charity, for example, might prefer to benchmark against other non-profit organisations as opposed to FTSE 100 companies.
Industry-specific surveys look at jobs that are particular to your sector, such as actuarial roles within financial services, or clinical research roles within life sciences.
Some organisations choose to participate in both types of surveys, using general industry data for functions such as HR, legal, administration, and marketing, while using sector-led surveys for their industry-specific functions.
2. Companies to benchmark against
Before participating in a salary survey, the survey provider will usually supply you with a list of other participants, so you can see if any of your competitors are taking part.
This list will also give you an indication of the survey size, as you need a healthy number of participants in a survey to produce meaningful results.
Some providers offer advanced options that allow you to pick which participants you wish to benchmark against. However, you must select a minimum number of organisations in order to ensure anonymity.
3. Ease of participation and reporting of results
Each provider has their own methodology, which can be shared before you agree to participate.
You should be able view the job descriptions and discuss how to align them with your organisation. Be sure to ask the provider what level of support they offer and what steps they take to validate your data.
You may also wish to ask:
- Will the results be delivered in Excel, PDF or via an online tool?
- Can you access the results in time for your pay review process?
- Can you filter the results based on different factors such as by region or revenue size?
The cost of salary surveys
The cost of participating in a salary survey can vary greatly. This is often reflected in the size and depth of the survey – or the additional services provided.
Some providers may include supplementary surveys, on benefits and other HR practices, for example. Others may offer additional resources, such as industry networking meetings.
Depending on the geographical spread of your organisation, you may wish to look for a provider who can support you across several countries and offer discounts on multiple purchases.
Taking all of these factors into account, consider which provider will genuinely offer you the best return on your investment.
Written by Tracey Hodgson, Reward Consultant at 3R Strategy
If you would like to discuss pay benchmarking in your organisation, send us a message or call 0203 8806650 today.