In a volatile and uncertain labor environment, it is important to make decisions based on facts and backed up by data. For compensation and HR professionals there is no better or more trusted data available than employer reported salary survey data.
In our five-part series, “Salary Surveys 20|20” we are providing a broad view of why you should consider salary surveys even now. In this post we highlight some things to look for, avoid, and be wary of when choosing a survey partner:
Effective dates.To comply with DOJ/FTC Safe Harbor Guidelines, survey data should be published at least three months after the data effective date. Scout out survey vendors that provide more frequent updates; quarterly if available. Bonus points if said vendors can augment traditional survey data with alternative data sources to provide the most up-to-date trends and insights. (See Part 3 Salary Surveys 20|20: Types of Market Data for examples).
Vendors with a proven track record of collecting and reporting data. Ask survey vendors about their participants, the average tenure of those participants and data volume year-over- year. Discuss the overall sample size including sample sizes in geographic locations, amongst companies of similar size and industries for your key job functions. Remember, a client list is not the same as a participant list.
Firms that offer HR and compensation consulting services as these firms make particularly good partners. Not only do these firms employ (big) data analysts/scientists within their survey divisions to derive trends and statistical models from large data tables, but they also have the expertise in the field partnering with your peers, applying that data in the real world. Consultants can be a great resource for organizations even if you are not engaged in a project with one.
Software, machine learning and artificial intelligence are all tools to compliment the human interaction and relationships which make effective data curation possible. Total rewards consultants and analysts add important context to large, complicated datasets to deliver meaningful results that positively impact the employee – employer experience. This melding of the statistical with the experiential help bridge the gap between the art and science of compensation.
Participant lists that are relevant.Start with a broad approach. At a minimum your survey library should contain sources with companies that share labor markets with you. Be sure to include non-traditional competitors that may employ creative strategies and unique incentives to attract talent. Consider large labor market leaders even if they are not a direct competitor for your products/services or have similar job functions as you. These large players have near unlimited resources to attract talent and lure away your existing talent with the promise of signing bonuses, tuition reimbursement, flexible hours, and in some cases, near triple the wages of federal and state minimum wages. (See Part 2 Salary Surveys 20 |20: How to Participate in a Salary Survey - Alternatives to questionnaires and input files: for more information).
- Next look toward surveys that are specific to the industry/industries you are in or serve. Additionally, ‘off-industry’ surveys can provide helpful insight into key job families. These are job functions that command ‘hot’ skills, competencies, and certification that you know incur a premium but is not well represented in an industry or general benchmark survey. Finally, look for participants that you consider peers as well as lists that include organizations that you compete against for product and services. This hyperlocal industry specific peer data might be difficult to find so you should look to multiple surveys covering a diverse array of reward elements.
Be wary of…
The term “real-time data.” Ask vendors to define it (and share their methodology documents), then ask yourself if you need it. Often this data is ‘manufactured’, aged, adjusted, manipulated, interpolated, and extrapolated from a source while leveraging proprietary algorithms and software. This is not to say this data has no value, on the contrary, just understand what it is and what it is not.
Turnover in participants happens. With roughly 33 million US employees quitting their job over the last year and many millions more out of the workforce globally, some disruption in data volume and quality is to be expected. Likewise, with mergers, acquisitions, spin-offs and divestitures, participant lists will most certainly change. No vendor is perfect, and even the best of the best loses participants for a whole host of reasons. Vendors absolutely know their retention statistics, data volume gains and losses, some probably down to the job level! Be skeptical of retention numbers that seem too good to be true and likewise if a vendor cannot talk openly with you about strengths, weaknesses and opportunity should you partner. They should ask you what companies you would like to see in their survey, and you should respond.
Data providers that provide steep discounts or ‘free access’ to data in exchange for exclusivity (i.e., you cannot participate in another vendor’s surveys). This is a fairly new trend, but I have heard from clients and prospects that these types of arrangements are being offered. Besides a monopoly on data and the obvious negative effect on participants, this is just a bad idea and flies in the face of best practices. The WorldatWork Total Rewards Association recommends that HR and compensation professionals use multiple data sources when market pricing. All research should site multiple sources and compensation research is no different and leaning on one source for all your data can be risky. Treat your data library like a financial portfolio and diversify!
Data providers who obfuscate (effective) dates or can’t/won’t tell you the age of their data. Ask questions on effective date which can differ significantly from a survey publish date. Also, if the age of data is of concern avoid most of the public data made available for free by local and federal governments which can be dated well beyond 16 months.
The enemy of every survey vendor and participant alike.Swings in data can occur for a number of reasons, but some key questions to ask: Has there been a material change in the survey and how its conducted? Were there changes to the job taxonomy and survey methodology? How about changes to data collection and reporting processes (See Part 2 Salary Surveys 20|20: How to Participate in a Salary Survey “Alternatives to questionnaires and input files “).
- Were there significant declines in participants/participation, version-over-version? If any of the above is true, consider your options; avoid until stable being one option. Keep in mind, however it still might make sense to pursue a relationship in the future. Ask the vendor if they will allow participation in the survey minus the results. When results are published, talk to the vendor again about the data and if acceptable, see if you can purchase the data at a discounted rate.
Peer cuts/reports that do not meet Safe Harbor Guidelines. Understand how your data is or might be used in peer reports and if the data you submit can be identified by others seeking it.
In our next post we will cover different types of market data and provide some helpful tips for managing your relationship with your survey partners.
The Compdata and IPAS survey practice at Salary.com is one of the largest compensation data providers in the world with compensation and benefits data spanning 100 countries across 17 industry verticals. To learn more, contact us at 781-552-4596.