Do you ever wonder if your employees’ salaries are in line with the market? Perhaps you are finding that applicants are often turning down job offers—and you suspect the salary level might be to blame. How can you know? One of the best ways to get data on competitor salary offerings is to use a market survey.
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Considerations When Selecting a Market Survey
In order to use a market survey effectively, there are several considerations. To begin with, you must decide if you’ll be conducting a survey or if you’ll be using free or purchased information from a third party. Answering this question depends in part on what data are available to you and whether or not the available information will be useful for comparison. For example, if your company is in a rural area and/or has very specialized or technical roles, you may not have much local data for direct comparison. This might limit your ability to use premade reports. On the other hand, if you’re situated in an established industry and have a wide geographic scope, or if your business is located in a well-populated area, you may be much more likely to have market reports available that offer true comparisons for the roles you’re looking at.
When considering whether available reports will be relevant to you, remember that competition for your employees may not be limited to your industry. It may be helpful to compare the pay offered in other industries for similar roles, since your employees could take those jobs, too. Also remember to assess not just the industry and geography covered, but also confirm the sample size of the survey you’re considering. If it’s too small, it may not be useful for you. Compare the size of the organizations that responded to the survey, as well, if that is relevant to the pay offered.
Apples-to-Apples Comparison
Once you have selected your market survey, you will need to assess the data. Where should you begin?
When you begin your assessment, recognize that every job for which you compare salaries will need clearly established responsibilities. This is important because not every job can be directly compared with occupations of similar titles. It’s much more useful to compare job responsibilities to ensure that you’re comparing roles that are truly alike. Jobs that have similar titles may actually have vastly different responsibilities.
If you’re using job descriptions from within your organization for comparison, you’ll also need to ensure that they’re up to date before you begin. If the description isn’t up to date, the effort will be pointless. This might mean an extra step up front—have your managers update the job description and responsibilities to ensure they’re accurate and truly reflect the duties required of the role. The description should be no more than a year old, ideally.
That said, it’s rare that the job responsibilities you have listed for a role will be a perfect match for the role you’re comparing it to in the market survey. The key is to get as close of a match as possible in terms of responsibilities, organizational position, education level, and experience or career level.
When doing your comparison, be sure you understand the way the data are presented in the survey. For example: Are they shown as an annual salary? Do they include bonuses or benefits? Are they for salaried or hourly employees? Do they include overtime? This is yet another example of making your study a true apples-to-apples comparison.
Don’t forget to take the age of the data into account. If you purchased a market survey that was conducted a year or more ago, you’ll need to figure in cost-of-living adjustments for the time that has passed since the survey was taken before comparing it to your current salary offerings.
Now that you’re comparing apples to apples, it’s time to determine what the data are telling you about your company’s salary structure. Are your salary and benefit offerings in alignment with market pay? Are you meeting your compensation goals in terms of paying at or above your competitors? Are changes warranted? This information can serve as a starting point for bigger decisions.
About Bridget Miller:
Bridget Miller is a business consultant with a specialized MBA in International Economics and Management, which provides a unique perspective on business challenges. She’s been working in the corporate world for over 15 years, with experience across multiple diverse departments including HR, sales, marketing, IT, commercial development, and training.