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Topics: Comp Strategy

Not all salary data sources are equal and it’s not enough to simply gain access to pay data. Understanding the differences in each source and how the data relates to the current job market, industry-specific trends, and geo-specific impacts to pay are key for HR and compensation professionals to determine fair pay for new and existing employees.


Your organization must understand what the market is willing to pay for the positions you need to fill in order to compete and retain talent in a market where potential hires and existing employees are more informed about their market rate than ever before. Choosing the right data sources means ensuring the information is specific to your industry, geography, size, and type of organization to gain the skills and experience you need for your workforce that grows with you.

There are three main sources for validated, external salary data and each comes with benefits and disadvantages to consider.

1. Crowdsourced data: Payscale has the world’s largest salary database with over 65 million profiles that gives HR and compensation professionals near real-time data to keep a pulse on the market, changing compensation realities, and is a true reflection of the market including specificity into skills and geo data. By implementing a multi-step, rigorous process to validate the data ensures the data is valid and defensible.

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Benefits: Considering employees know the most about their own jobs, crowdsourced data allows for more specific and granular data. Crowdsourced data typically covers more jobs and locations—including fast-moving, specialized, and emerging jobs—because the data is updated daily. Payscale collects more than 200K new and usable salary profiles each month.

Disadvantages: Some groups are underrepresented with crowdsourced data. There’s typically not enough incentive for executive-level roles to fill out online surveys, minimum wage employees are less likely to participate in online surveys, and the data provided tends to derive more from white-collar workers.


2. Company-sourced data: Sourced from participating employers, Payscale solutions leverages data science and machine learning to automate survey participation work, and allow customers to share that data across our compensation platform. Payscale aggregates the information and automatically generates updated compensation benchmarks each quarter.

Benefits: Participants receive aggregated data quarterly specific to their market, including city and industry. This data source contains unique job categories that are difficult to access elsewhere, and replaces time-consuming manual process with automation. The larger the data-sharing network grows, the better the data becomes.

Disadvantages: Some groups are at risk of being underrepresented with company-sourced data but helps organizations gain more perspective on executive pay over the crowdsourced data.


3. Employer-sourced data: Gain access to thousands of traditional surveys from third-party providers through exclusive partnerships and agreements, improving the data lifecycle experience with easy access to data and a seamless survey loading and participation experience.

Benefits: This data source includes partnerships with leading survey publishers, including Mercer and Empsight. Through trusted partnerships, Payscale improves the hygiene of the data ecosystem and user experience. Employer-sourced surveys typically provide a participant list, giving visibility into which organizations are participating, including your competitors.

Disadvantages: This data source can sometimes be too broad and not provide enough details for more rural areas. These data sets are typically published annually, which could mean the data is up to nine months old, resulting in “aging coefficients” being applied to the data. Due to the cadence of publishing, the data lacks the near real-time details needed to fill gaps for newer or trending jobs.


In addition to understanding that not all salary data sources are equal—it’s also important to realize that no single source of data will cover all your inquiries to fill roles specific to your organization. However, by taking the critical step to understanding the methodology of the salary data you’re using will help you assess the quality of the data and align your salary offerings competitively to your market. Learn more about how to choose the right data source for your organizational needs.

Tina Gunn
Digital Content Strategist at Payscale
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