Salary Surveys: Are They Worth Investing In?

Today, with all the uncertainty in people’s personal and professional lives, it is vital to make data-driven decisions, even if data is imperfect. Market data and compensation surveys offer a great and stable resource for firms but are by no means perfect.

Salary surveys by nature (and by law) are backwards looking. They do not offer daily or weekly updates from salary surveys. But it does not mean salary surveys have no value. Neither are they irrelevant tools for the compensation and HR professional. But the question is still, are salary surveys worth investing a company’s time and money in?

What is a Salary Survey?

This is a method in which experts gather data on workers’ compensation. This includes the basic pay and benefits. Experts do this to find out the pay levels for certain job categories. The surveys usually depend on region, sector, or job roles.

This also helps experts analyze data and allows firms to create a suitable pay strategy. In addition, they use it to find out if their current pay strategy is fair and competitive.

Benefits of Salary Surveys

Aside from supplying valuable insight on a worker’s pay, there are more benefits of salary surveys. Here are some of them.

1. It can help with salary benchmarking.

Data from salary surveys supply insights into the highest and lowest pay for a certain role in an industry. With this, firms can offer a solid pay range to their workers.

2. It can aid firms to create a total rewards package.

A total rewards package is a vital approach for many firms. This ensures they reward their workers fairly and keep them happy. Insight from salary surveys can help firms in creating a great total rewards package.

3. Companies can keep up with salary trends.

Reviewing salary surveys consistently offers firms a better sense of what can make workers happy. They can gain access to new ways on how to reward their workers better.

4. Hiring and keeping the best workers.

Offering the right pay plan for each job role is valuable to a company. They can achieve this by using salary surveys. As a result, a great pay plan attracts the best candidates. Also, it can help keep the top workers.

5. Create a culture that is consistent and transparent.

Building a workplace with trust is critical. This comes from a culture that is consistent and transparent. When firms are honest when it comes to compensation, the work culture reflects it. Salary surveys foster honesty with how firms figure out their workers’ pay.

Common Challenges with Salary Surveys

Every process may have a range of benefits, but it does not come without challenges. Here are a few of the usual challenges with salary surveys.

1. It requires time, effort, and money to create a salary survey.

2. There are firms that do not want their rivals to have access to their pay data.

3. There are worries about breaking the Anti-Trust Guidelines.

4. There can be bad market data.

Using Salary Surveys in Compensation Strategy

Once firms have access to salary surveys, putting it into action is next. Here are ways firms can consider using salary surveys on.

1. Create or update job descriptions.

2. Get buy-in from leaders to update the company’s salary plan.

3. Know how to improve pay strategies with total rewards.

4. Make pay adjustments during workers review season.

Recommendations Involving Salary Surveys

Taking it to a whole new level, here are some valuable recommendations about salary surveys.

1. Start collecting data NOW.

It pays to be proactive and to start building a data archive. Experts propose surveys with updates that come multiple times per year. Firms should get data during the next 24 to 36 months. This should focus on their labor markets compared to their internal data.  For companies that buys data every other year, invest in data in back-to-back years.

2. Do your part, take part in surveys.

Surveys are a community and survey vendors work with and for the greater good of the community. Data volatility is an enemy for survey vendors and participants. It is vital that data volatility is low, especially during unstable economic states. Consistent participation is the only way to ensure the community gets the most correct and up to date data.

3. Take part even if there is no budget or urgent need.

Firms must engage their survey provider for more data. Many survey vendors are running “off-cycle” and pulse surveys on related current events. Firms must join in or supply feedback on their topic of interest. Also, survey analysts see and talk to a lot of personas within the companies they have contact with. They can supply some great data from their experiences.

4. Firms should look at their internal pay practices and ‘shore up’ top performers.

While firms are on hiring binge, did they have to extend a bit to bring in a new candidate? How did it affect the pay grades and morale of existing workers? Pay equity? Chances are the workers that were performing were the top ones back then. Find the ‘flight risk’ within the top performing worker population. Review their current pay against salary survey data and suggest proper pay changes to leaders.

Historical data and trends from salary surveys can offer firms guidance on a go-forward plan even in unfamiliar events. For decades, experts conduct salary surveys without fail. Even through economic booms and recessions, to single-digit unemployment and life-altering disasters.