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Making Better Decision Using Accurate Salary Data

Written by Salary.com Staff

April 6, 2018

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There are many HR processes that are tricky and require more effort than others. One of which involves the workers’ salary. But this is also one of the most critical aspects of an organization. Companies need to ensure they produce an effective salary budget plan in place.

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Companies use valid sources to make smart decisions about their salary strategy. This is where salary surveys come in. This tool supplies the data companies need to create a salary strategy that is fair and free from bias.

What is Salary Survey Data?

But what is a salary survey? It is a systematic way to collect data about workers’ pay. This includes their basic salary and benefits. Firms use this method to find out salary levels for a certain job role. They usually conduct salary surveys depending on the region or sector. They can also do this according to job classification.

This method helps workers and employers recognize various job pays in distinct locations. It also aids in finding salary trends. Lastly, it serves as a guide to benchmark a firm’s salary level against their rivals within the industry.

Who Uses Salary Surveys?

Both employers and employees use salary surveys. This is for them to get correct data on pay levels. Firms use this to ensure they are paying their workers fairly. On the other hand, workers use this to know their value in the job market. The survey gives them an idea how much pay they can ask for when applying for a new job.

Why Salary Survey Matters?

As complex as it may sound, companies conduct salary surveys for many reasons. Often this results in major benefits for the company and its workers. There are several key reasons why salary surveys matter.

  1. It helps firms find out about current competitive pay levels.

Firms get the data they need about current market rates using salary surveys. They can know pay levels for certain job roles depending on the industry and location. As a result, firms can create competitive salary packages. This strategy helps attract high quality job seekers and keep good workers.

  1. It allows workers to ask for fair pay.

On the other hand, salary surveys are also vital for workers and job seekers. This can give them knowledge of how much a company should them. It shows pay levels for job roles depending on skills and experience. As a result, workers can fairly ask for better pay when applying for a job post.

  1. It can supply data on current pay trends.

The critical role of salary surveys also includes supplying data on current salary trends. This shows which roles are in high demand and have potential pay growth. With this data, firms can adjust salary offers for future hires to stay competitive.

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  1. It ensures compliance with laws and regulations.

The entire process of creating a salary package is complex. There are roles and industries that pay depending on certain laws. Salary surveys help ensure that firms abide by these rules and laws.

Challenges When Conducting Salary Surveys

After knowing the importance of salary surveys, it is best to know the challenges that come with it. For businesses committed to investing in it, here are the usual challenges they may meet involving salary surveys.

Time and Money

Salary survey is a tedious task. As a result, it requires time and money. This is one of the most usual challenges many companies face.

Legal Concerns

Salary surveys use sensitive data. For this reason, there can be some legal concerns. To prevent this, firms need to follow the Anti-Trust Guidelines. It explains rules on properly concealing survey participants’ data. It also has rules on buying reports from reliable firms that collect the data. At the same time, it also tells of how to properly hire third party firms to conduct the survey.

Bad Data

Not all data available in the job market is of decent quality. Bad data is also persistent and is everywhere. This is also one of the challenges for salary surveys. The survey results will be as good or bad as the data used for it. If a firm uses bad data, they are most likely to produce an inaccurate salary plan. This will not attract the best candidates for the job roles. In addition, they may publish pay ranges that are not within the norms of the industry.

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Like many other processes, salary surveys have benefits and challenges. But it is a major help for firms that aim to upgrade the way they create compensation strategies.

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