Harnessing the Power of Salary Surveys
The old adage “knowledge is power” holds true for any business. In making both tactical, or day-to-day decisions, as well as formulating and executing on a long-term strategy for growth, the more information you have at your fingertips, the better your decisions will be.
In the HR world, there are many sources of data on our employees, which if collected and analyzed, can add value to your business by identifying marketplace trends and managing workforce needs:
- Employee demographic data (e.g., age, tenure)
- Performance data (e.g., employee performance, sales performance)
- Turnover, headcount
- Safety records
And today, more than ever, access to reliable and diversified data is easy. Technologies are able to generate and capture more information in today’s world, and employees are more savvy than ever in using data available to them. However, the amount of available data can be overwhelming, and making meaning of this data can be challenging and time consuming.
A key element of data collection that must not be overlooked is establishing a competitive pay philosophy and determining desired market position for total rewards. Using salary surveys to understand your current market position – especially if you’ve never done it before – can give you a baseline of valuable information upon which to make pay decisions. In deciding whether to do a competitive market assessment, questions to ask yourself include:
- How do we know if we are competitive in the marketplace in terms of salary and benefits?
- How does my business stack up – relative to competitors – in terms of compensation and benefit levels as well as the total rewards package?
- Who is our competition for labor? Does it vary by job or job group? The competition for labor may vary by occupation.
- Are we able to recruit the best and the brightest with the total rewards package we offer?
- Does the company’s compensation philosophy align with business objectives?
- Are we overpaying or underpaying for any jobs?
Salary surveys can help you make more meaningful and educated decisions about your employees, especially when data is representative of your business in terms of industry, company size (revenues, number of employees), business status (profit, non-profit) and geography.
Once collected, data are translated into meaningful information, such as comparisons to current pay and benefit levels within your organization and year-over-year trends in pay. The results will provide you with a “general landscape” for making the best people and pay decisions for your business.
While surveys are an important part of the equation, it’s clear that survey results are not the only consideration when an organization determines its competitive pay positioning. External factors such as the economy, supply and demand for certain technical skills and your geographic location all contribute to your ability as a company to adapt to market competitiveness.
Let’s face it – businesses are becoming more data-driven every day. You’ve heard of “Big HR Data and Predictive Analytics” – this trend is about using scientific methods, statistics and cloud-based services to capture and convert HR data into business insights. The transformation of “raw” employee data into useful insights helps companies evaluate and improve talent acquisition, career development, retention, productivity – and even overall organization performance. Ultimately, predictive analytics will allow for the forecasting of future workforce needs, the identification of potential gaps and the ability to create strategies to successfully bridge these gaps.
Salary surveys are but a small component toward defining the big picture – but a great place to start!
[author] [author_image timthumb=’on’]https://meainfo.org/app/uploads/2014/10/leslie-barringer.jpg[/author_image] [author_info]Leslie Barringer
Director of Compensation & Benefitslbarringer@meainfo.org[/author_info] [/author]