For those in the compensation industry, the upcoming fall season represents more than just swapping swimsuits for sweaters and drinking pumpkin spice everything. If you’re a compensation analyst (or similar) you’re about to embark upon one of the busiest times of the year: new survey season.
In today’s competitive market, it’s important for companies to stay informed with current and accurate market data. Using this data enables companies to establish the value of individual jobs, thus helping companies allocate compensation costs and build accurate pay structures.
Many of you are likely seasoned pros and have been doing this for years. On the other hand, those that are newer to the industry might find this overview more useful.
When it comes to using market data, there are many things to consider. First of all, you’ll want to ask yourself, which salary surveys are right for your organization’s jobs, and what is your organization’s strategy for using market data.
There are four types of surveys:
- Standard vendor surveys
- Custom surveys
- Club surveys
- Crowd-sourced surveys
Standard Vendor Surveys
Standard vendor surveys are the most common and provide the most robust data. Published by vendors that define jobs and data scopes. The major players here are: Mercer, Willis Towers Watson, Aon and Hay Group. Though there are a number of others.
These larger surveys have broad participation and representation of labor markets. With years of experience, these surveys tend to have a more efficient process. They are also likely to have info on your competitors, as they will also be participating in the same surveys. You can also create custom data scopes and industries. On the other hand, the definitions of the labor market might be less precise, since they focus on the larger industry categories. Also, they might not include specific areas of interest.
Custom Surveys
These are surveys that are specific to a subset of data that contains specific jobs and scope that are not covered in existing sources. These could include organizations with different sizes or types of employees, as well as different geographical locations. They are tailored to the needs of specific organizations.
However, these surveys are typically done not annually, but on an ad-hoc basis, for a specific purpose, so the data can be very limited. The process can also be costly and time-consuming.
Club Surveys
Conducted annually, club surveys are specific to one industry and are usually not covered in the larger standard survey. These are based on specific peer comparison groups, which can be particularly helpful to those in a niche industry.
Crowd Sourced Survey
These are user-submitted data sets. Individual employees submit data online in exchange for market data. These can be good for covering both high density and rural populations as you can obtain data and scope by geographical locations with a smaller population. This kind of data would typically not be available in a standard vendor survey. There is robust information on skills, degrees and certifications, which would also be unavailable in standard surveys. Since data collection happens on a rolling basis, this is a great way to keep informed of the latest trends.
Once you’ve decided which survey(s) you want to work with, you’ll want to look at the data with a critical eye.
4 Helpful Tips
Tip #1: Review the Methodology Section
Does anything stick out to you? What’s new? What’s different? Mercer, for example, went through a massive change in their job catalog library in 2018. Most likely, things haven’t changed that much, but if they, you’ll want to know what those changes are.
Tip #2: Ask Questions
Do you see something you don’t quite agree with or understand? Don’t hesitate to reach out to your vendor rep with any questions. They’ll be more than happy to help out. As with any industry, there is a fair amount of mobility. People either get promoted, or switch companies. Although rare, sometimes if a customer is new in their role, they might not be on all the appropriate contact lists. Be sure to reach out if you feel something is amiss.
Tip #3: Confirm Participant List
Be sure to confirm the participant list of any survey you use. Your organization’s key stakeholders, including the comp and HR teams, will want to ensure that data for key competitors is included in the results for each survey.
Tip #4: Note Any Big Changes
Be sure to watch out for any significant swings in market data. Watch for data trends to see if anything has shifted significantly. If there are changes, note the reason. Perhaps shifts could be caused by fewer respondents, changes in industry, economics, or even changes with the participants in the survey.
Keeping these tips in mind will help prepare you for market survey season.