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Selecting and Using Salary Surveys

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A large amount of published and Internet salary survey data is currently available. Some issues to think about before using these sources include deciding what surveys to use, and how to use them. A first consideration is what data do you need to gather from the surveys: total compensation (base pay, incentives, stock, benefits), salary only, pay practices (shift or lead worker differentials), or a combination of these. The next choice is selecting which jobs to survey. Most salary surveys contain benchmark jobs that are common to many organizations. Survey data collection for 33% to 50% of an organization's job titles is recommended as a basis to develop the pay structure. Compensation trends can be tracked from year to year by reexamining the same bench-mark jobs. Non-benchmark jobs that are of strategic importance to the organization should also be used. These might be positions difficult to recruit for, extremely competitive ones such as Information Systems, jobs with significant changes in duties, or positions that are a blend of several jobs (Director of Compensation/Employment/HRIS). Deciding the appropriate labor market is the third step. What other organizations or geographic areas does your organization recruit from? What other organizations or geographic areas does your organization lose employees to? Labor markets include local, regional, and national. A local market area is the company's immediate market area from which it recruits and is usually limited to nonexempt, supervisory, and some management positions. A regional market is a larger geographic area used to recruit upper and senior management positions. National markets are primarily utilized for recruiting specialized or executive candidates, and include the most extensive talent pool to draw from. In addition to geographic area, another market decision criteria is selecting organizations similar in industry and size to yours. Pay levels generally vary between small and large organizations. Some industries typically pay higher also, such as high tech. Selecting the most appropriate survey sources to use further includes an analysis of the data to determine match of industry, market region, and organization size. Not all surveys include each piece, so using multiple survey sources is recommended. When using published survey sources, be cautioned not to match on job title alone. Most surveys include mini job description summaries, which will vary in duties and responsibilities from survey to survey. Review the survey description first to determine if it appears at least 70% close to your organization's position. The survey data is more reliable the closer the description matches. Survey pay data generally includes a weighted average (average of salaries weighted by number of incumbents), and average salary range minimum, midpoint, and maximum or quartiles (251-median-751). The simple mean salary is not recommended because it can be easily skewed by very high or very low rates. Published survey sources typically include exempt and non-exempt benchmark jobs, executive compensation, specialty industries (healthcare, not-for-profit), and functional surveys (human resources, finance, and engineering). Off-the-shelf surveys can be purchased from the publishing organization, or obtained through participation in an association, industry, or geographic regional survey. In addition to published survey sources, an organization may choose to conduct its own custom salary survey. The steps involved include: define the labor market, select organizations to participate and influence to participate, select jobs to survey, and decide what data to collect. Conducting your own survey allows your organization to choose the jobs, orga-nizations, and region included in the survey data collection. However, custom surveys are time consuming. It is difficult to get other organizations to respond to surveys in a timely manner. Someone must analyze and summarize the results. Also most organizations will not participate in a survey unless they are ensured confidentiality of their data and a copy of the results. Identify your organization's salary survey needs, research the best survey sources, select the survey data most relevant to your organization matching industry, size, and geographic region; and use at least three survey sources for each position.

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