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Are Traditional Compensation Surveys Right for Your Business?

Age is Wonderful for Wine, but Deadly for Data.

By Tripp Ritter, PayScale.com

Many compensation data providers offer well-constructed data products based on reliable data. . .that just happens to be months old. PayScale believes this aged data is not what today's decision-makers need, which is why we came up with a more timely way to collect and organize compensation data.

In a world where businesses change constantly, employers need dynamic data. It's where the world is headed. Even in their private life, people have become accustomed to demand dynamic information over stale. Take investments, for example. Thanks to mobile devices and the Web, you can now get stock updates every minute. You wouldn't buy or sell a stock based on data that was nine months old. Why would you make vital compensation decisions that tap your precious labor budget on data that old?

The Traditional Approach

Do traditional surveys really provide data that out of date? Yes, they do. But, don't take our word for it. Pick up a report from a traditional salary data provider and read the details. When was the data collected? Not last week, not last month, not last quarter. The fact is, traditional surveys take time. They build the survey, send the survey out to a list, wait for the response, collect the data, analyze the data, and create the final report. Each of these steps adds weeks, so realistically a traditional survey is often only conducted yearly or at best a few times per year.

What Difference Does a Few Months Make?

Consider someone making a compensation decision in January of this year. Using mid-2011 data they might decide that hiring was light and act accordingly. In reality, as the Department of Labor jobs report -- as well as PayScale data -- makes clear, hiring was up.

Your ability to retain employees and hire the best people for your company depends on how well you understand the range of actual compensation as it is today. With access to real-time data, you see the ups and downs of the market over time and make your decisions accordingly. Your employees and your potential hires are making their employment decisions using up to the minute data, thanks to PayScale.

PayScale’s efforts at modernizing compensation data are part of a wider trend in the data industry. Companies like Jive are capturing vast amounts of social data and using it to help marketers protect their brands online. Business intelligence tools are exploding in popularity because they allow companies to take advantage of the data they already have. For these companies and others, the focus is on quickly getting information to the decision-maker. It's time for those who manage compensation to have the same tools.

 

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