How to Find Reliable Salary Data
Offering market competitive compensation packages are key in attracting and retaining top talent, but how does an organization know if they are competitive?
Employees and managers can (and do) search the internet to find free information on salaries. However, this free information is often anecdotal and not collected and reported in a structured and scientific manner leaving employees with a false sense of their market value. Finding reliable salary data for an organization's industry and geographic location is not always obvious.
How to Find Reliable Salary Data
To ensure you are getting reliable data that is in compliance with legal guidelines, consider purchasing third-party salary surveys conducted in accordance with the Sherman Anti-trust Act and Safe Harbor rules for the collection of salary information. The organization conducting the survey will disclose the methodology used to collect and publish the data obtained in accordance with regulatory requirements and maintaining confidentiality.
Some well-known compensation survey organizations include Culpepper, Towers Watson, HRA-NCA, HR Alliance, Radford, and many others. These organizations generally collect salary data from employers during the spring timeframe in order for the survey results to be published in the summer and early fall, in time for budgeting and planning for salary expenses for the upcoming year.
Purchasing and Participating in Salary Surveys
Organizations should consider budgeting for the purchase of salary data that is collected, analyzed, and published by reputable firms and then use this as the basis for pay levels and salary decisions aligned with your overall compensation philosophy.
While anyone can purchase these salary surveys, participation in the data collection typically provides for a significant discount on the purchase price of the survey when published. Preparing and submitting data for participation in salary surveys is generally straightforward. It simply requires the organization to match their internal company jobs to the job descriptions in the survey and then report salary information for the incumbents in those roles. Some surveys may gather salary range and policy information as well. The time spent preparing and submitting data is well worth the savings realized when purchasing the survey data.
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What to Consider When Choosing Surveys to Participate In and Purchase:
When choosing what surveys to participate in and purchase, organizations should take the following into consideration:
- Is the survey gathered and published by a reputable organization in the business of gathering and compiling this information? Beware of surveys that ask employees to self-report their salaries. Look for surveys that require a specific format for reporting data, typically submitted by the organization’s HR department.
- What other companies typically participate in the survey? You want to ensure that the surveys you participate in and purchase represent organizations in the same industry that you are competing in for talent.
- What jobs are covered in the survey? Make sure that the surveys you choose have a broad representation of the jobs in your organization. In some cases, specialized surveys may be required to gather good information on a particular type of job, such as Executive or IT positions or government contractors.
- What geographies are covered in the survey? Make sure that the survey provides information that represents pay information for locations in which your organization is recruiting for talent.
- What methodologies are used to compile and publish the data? Make sure that the survey company takes into consideration the sample size and publishes data only where enough data points are reported (often 5 companies are required to publish the data for the job). Ensure that median, 25th percentile, 50th percentile, and 75th percentiles are reported in addition to averages. These data points give you a broad range of information on where companies are paying.
- What data elements are gathered? If you want to look at base pay and variable compensation levels, make sure the survey collects and publishes total cash compensation in addition to base pay.
Alternative Options to Salary Survey Participation
If your organization is not ready to take on participation in salary surveys and purchasing data, Helios HR has a broad range of market data resources and can benchmark your positions, develop salary structures, analyze employee salaries against market rates, and develop salary administration guidelines for you. As a third-party consulting firm, Helios subscribes to a wide range of salary surveys that capture national, local and industry-specific compensation data. We also conduct custom salary surveys for clients who want a more niche-specific approach that existing market data doesn't support. Whether you decide to purchase salary data or partner with a compensation consulting firm like Helios for your market data needs, developing a fair, consistent, and competitive approach to paying employees is a critical foundation of your human capital practices.