Looking for Reliable Salary Data? Ask These 6 Questions First
One of the most common pieces of hiring advice is this: "always make sure that your salary offer is close to the market average". That's great in theory, but in practice, you're left with one big question: what is the market average?
There is no single point of reference for market-average salaries. Sites like Glassdoor and Salary.com are self-reported by employees, which means their figures aren't always accurate. The Bureau of Labor Statistics offers more objective salary data, but they don't always keep up with market movements.
.If you want to create a salary structure that accurately reflects current market conditions, you may need to pay a firm for data access.
How to Find Reliable Salary Data
If you are purchasing salary data, you'll need to find a source that's compliant with the Sherman Anti-trust Act and Safe Harbor rules for the collection of salary information. The organization conducting the survey should also publish its methodology. Look at how they gather data, how they ensure objectivity, and how they protect privacy.
UPDATE: Helios HR now provides free compensation data via our partner, Payscale. Get reliable salary data here.
Some well-known compensation survey organizations include:
These organizations generally collect salary data in spring and publish it in summer. This schedule allows time for planning your Total Rewards for the upcoming year.
6 questions to ask when looking for reliable salary data
When choosing what surveys to participate in and purchase, organizations should take the following into consideration:
1. Is this from a reputable organization?
Beware of surveys that ask employees to self-report their salaries. Employees often provide incorrect details—for example, a part-time employee might accidentally enter their compensation as a full-time salary. Mistakes like this can spoil the data quality.
Look for surveys that require a specific format for reporting data, typically submitted by the organization’s HR department. This helps to ensure consistency and results in more reliable salary data.
2. What companies participated in the survey?
Salary data is more useful when it's segmented by organization size. For example, a small firm might pay its salespeople a base salary of $75,000. The same salespeople might earn closer to $150,000 in a large multinational. The average of the two is $112,500, but that figure doesn't reflect the reality of the hiring market.
Make sure that the data is segmented, and that some of the surveyed companies match your own profile. This will give you a more accurate idea of how you benchmark against rivals.
3. How are jobs categorized?
Job categorization is always a challenge when compiling salary data. Job titles can have a slightly different meaning from one organization to another, which makes it hard to perform a like-for-like comparison.
The salary survey company should have an objective framework for job categorization, in which they clearly define the meaning of each role. Note: for obscure or emerging roles, you may need to hire a consultant to perform a specialist survey.
4. Which regions are covered?
Salaries can vary greatly between states, or even between cities. According to the Bureau of Labor Statistics, the average national median wage is $54,132 per year. However, the median wage in D.C. is $79,955, while the median in Louisiana is $35,069.
It's important to know what kind of salaries are available in your locale. Also, it can be helpful to know about typical salaries offered to remote workers.
5. What is the survey methodology?
It's your duty to ensure that the salary data comes from an ethical and compliant organization. Remember: if they're not doing due diligence, then it raises questions about whether they can really produce reliable survey data.
Look at their website and find out as much as you can about their methodology. If possible, speak to a representative and ask questions about how they source their salary data. Make sure that they are professional and consistent in their approach.
6. How much data is available?
A high-quality, reliable salary data report will provide you with a salary range. This will show you the median, 25th percentile, 50th percentile, and 75th percentiles for each job role.
Detailed surveys might also offer an insight into variable compensation, such as bonuses and commission. Look for a data provider that can tell you as much as possible about the current hiring market.
Should you participate in salary surveys?
Reliable salary data isn't cheap. If you want quality data, you'll have to consider this cost in your budget.
However, many companies will offer a discount if you participate in their surveys. This does require an investment of time (your HR team will need to complete the reports), but it can lead to substantial savings.
Another advantage of participation is that you get to see the survey methodology in action. This will help you understand if the company in question are genuinely committed to compiling reliable salary data
Alternatives to paying for reliable salary data
Another way to access reliable salary data is to partner with someone who has the information you need.
For example, if you outsource your HR needs to Helios HR, you'll have access to our in-house resources. That includes up-to-date salary information, plus our wide knowledge of the current hiring scene.
Need help with your candidate offers? Book a no-obligation call with Helios HR today!