Written by Brett Rudy
April 29, 2019
Do you know what you should be paid at your job? I mean, do you REALLY know? Maybe you’ve received consistent raises and cost-of-living adjustments for a decade. But if your salary wasn’t competitive at the beginning, your salary could be way off the market rate now – especially if you’ve never truly benchmarked your job and negotiated for market adjustments.
To know your worth, many turn to employee-reported (or “crowdsourced”) compensation data. But for compensation experts, these tools don’t offer the most reliable data. Employer-reported pay data, which is collected from corporate HR departments worldwide, is widely considered the gold standard for understanding the true market value of the jobs in your organization. HR-reported market data offers unparalleled job matching, pricing, and reporting accuracy that simply can’t be matched by employee-reported data.
In the article, the follow questions will be answered:
When media outlets write about salary data, they often lump organizations like Salary.com, LinkedIn, Paysa, Payscale, Glassdoor, and others together. Yet only Salary.com uses HR-reported aggregate market pay data and employer-reported compensation survey data to build a view of your worth.
Here’s an example: let’s say you’re are a Human Resources Director in Boston, Massachusetts with 20 years of experience. Do you know what you are worth?
When pricing your job on many of the leading career and pay sites, you’re pricing against pay data that’s been submitted by other users of the site. This is because many of the leading sites require you to enter more than half a dozen pages of personal data, including your annual base salary, benefits, company name, skills, and more, before you can see what others are being paid. You’re also required to find a job match for your job – often based on title alone.
If you merely want to access the answers, you might just enter “$100,000” as salary, whether that is an accurate answer or not. Or, you might try to answer more thoughtfully, but not know the exact value of your incentive or benefits packages. You might also struggle to find an exact match for your job title based on the titles in the site’s database.
With self-reported data, the information you entered into this survey, whether real or bogus, is blended with the rest. Next time a Human Resource Director assesses their worth in salary, your data will be included in the analysis, unless it’s a dramatic outlier.
In comparison, HR-reported salary survey data is collected directly from compensation professionals who set the pay ranges for their companies. They follow a lengthy job matching process, which requires them to match their internal company jobs to their salary survey providers’ jobs, using a detailed set of match criteria like job title, job description, key job duties and skills, required years of experience, and other job levelling information.
Once they’ve established a job match, they submit similar categories of information – base salary, long- and short-term incentive pay, benefits, and more – for each of the employees in each of their jobs. These massive files are then collected by the survey providers, who aggregate, anonymize, and run accuracy analyses against the data. They also ensure that the data maintains Safe Harbor compliance with federal government anti-trust regulations.
In contrast to employee-reported (or “crowdsourced”) data sites, the data reported on Salary.com is only derived from HR-reported data sources, including hundreds of traditional salary surveys that follow the process described above. Because companies rely on this data to market price and set pay for their jobs, they take the process of participating in surveys very seriously and often spend countless hours job matching and participating in such surveys ever year.
The data collected through these processes is also submitted to a rigorous quality assurance check by the survey providers, which often involves digging in with individual participants about data outliers. HR-reported data is therefore widely viewed as the most credible and accurate source of pay data available.
To demonstrate the difference between employee-reported and HR-reported data, consider the prices offered by many of the top sites for similar roles.
For example, one of the employee-reported (or “crowdsourced”) data sites reports a median range for your Human Resources Director role at just under $107,000. The same search for an HR Director pay on Salary.com’s Salary Wizard reports a Human Resource Director in Boston, Massachusetts with 20 years of experience should earn a median income of $173,129. This is a 62% discrepancy!
As an employee, if you’re relying on employee-reported data to know your worth, think twice – you could be leaving money on the negotiating table.
And as a human resources professional, you’re responsible for ensuring the pay you’re offering your employees is competitive. If not, you could face turnover or employee engagement challenges – many of which could have been avoided if you’d accurately priced your jobs in the first place!
If you need to quickly check if you are in the right ballpark for the salary of an existing employee or new hire, then our free Salary Wizard could be helpful as a reliable source of data. The data in our Salary Wizard is based on national average pay, adjusted locally for geographic pay differentials. However, for most companies, Salary.com’s CompAnalyst Market Data, which allows you to scope your data to find a more exact price, is the preferred solution.
Thousands of companies use our CompAnalyst Market Data to match and market price their jobs. Covering 15,000 unique job titles and 225 industry breakouts in the US, CompAnalyst Market Data delivers the broadest database of HR-reported aggregate market data available today. The data provides the market range of cash compensation paid for specific jobs as adjusted for industry, size of company, location, and other scoping factors that impact pay.
We leverage hundreds of commercially available salary surveys, along with market-leading machine learning and AI processes, to build our CompAnalyst Market Data data set. This broad data collection process allows Salary.com to create a composite view of the employment market for each job and to allow you to define the specific combination of scopes that provides the most relevant information for any given job. CompAnalyst can easily report very broad or very granular data – you decide.
Unlike compensation surveys, which report data effective as of a fixed date, CompAnalyst Market Data is updated monthly as Salary.com receives new pricing intelligence. As we acquire new data and notice changes in the market, we make adjustments and update the entire database – adding new jobs and updating prices monthly so you always have the most up-to-date data at your fingertips.
One of the most significant benefits of the Salary.com methodology for data collection, analysis, and publishing is that we are able to publish a pay range for every job in every pay market – even when surveys do not offer sufficient data for that market or position to publish a number.
The methodology behind Salary.com’s CompAnalyst is a state-of-the-art process for benchmarking and analyzing jobs that is built on industry standard best practices used by compensation analyst professionals to market price jobs. Our team of compensation consultants review multiple surveys as sources of data. Surveys are selected and validated, jobs are benchmarked to multiple surveys, data is aggregated, interpolation and extrapolation is applied as required, and results are reviewed and adjusted for accuracy and consistency.
When data is scarce, say, for a particular job at a particular location, we project that data point just like a compensation professional would by adjusting similar data that is available in other geographies, industries, or even for similar positions. Some experts refer to CompAnalyst data as a “survey of surveys,” or a comprehensive market study, completed by compensation professionals. Our unique process allows us to provide the best estimate of the true market value for each job.
For the busy HR professional, CompAnalyst Market Data is an easy-to-use and accurate job matching and pricing tools that allows you to ensure your pay is keeping pace with ever-changing market conditions. Our CompAnalyst platform is also a powerful productivity tool for your HR or compensation department, as it can streamline your pricing processes and allow you to make strategic pay decisions quickly and accurately.
Download our white paper to further understand how organizations across the country are using market data, internal analytics, and strategic communication to establish an equitable pay structure.