What to Consider When Evaluating a Salary Survey
There are innumerable salary surveys online, and many seem to come from trustworthy sources, so how do we know which ones to use? If any of these bullets apply, we recommend excluding the source from your analysis, or weighing it very lightly:
- The methodology is not shared
- The participants are not shared
- Job descriptions are not included
- The data is older than 1-year
- Data is crowd sourced or employee reported
- It is from a different country (Yes. Even if it is a neighboring Country)
Salary Surveys to Avoid
The following is a list of various types surveys that companies should steer away from when setting their pay:
- Bureau of Labor Statistics – The data is usually too old to be considered reliable by most Compensation Practitioners, especially in this market. Further, the lack of breakouts by management and individual contributors make this survey difficult to utilize effectively.
- O*NET – O*Net is a great source for creating job descriptions, but the lack of job levels make this salary survey difficult to utilize effectively.
- Aggregated Salary Surveys – This happens when a company purchases multiple good salary surveys, blends them together and then calls them their own. The problem with these surveys is that they do not disclose the data sources, which means they may be using survey sources that are not reliable.
- Crowd Sourced or Self-Reported Surveys – crowd sourced or self-reported salary surveys have little to no means for data validation and are one of the least useful in the Compensation industry.
- Wage reports from Recruiting firms – Recruiting firm salary surveys rarely disclose their methodology, the data source, participants, nor job descriptions. Those that do usually only include information based on hiring rates, which can be good information, but should not be considered in the same way that a salary survey is.
- Estimated Salary Ranges from Job Boards – Many job boards have begun estimating rates of pay for job postings and while the potential is there, the rates of pay are unreliable and oftentimes considerably different from the actual pay rates.
Employees are often the most expensive resource at a company, and miscalculating fair and competitive pay can be costly. Using a strong salary survey source can help control costs, reduce attrition and shorten recruiting times.