How do you use compensation surveys and data to attract and retain top talent in a competitive market?

Salary Surveys and data are important tools in a comp toolkit as they help to ascertain if the salary ranges for roles within your organization are accurately and equivalently benchmarked against the job/wage market . This is interpreted in the context of your Comp Strategy i.e. lead, lag or meet the wage market or a more hybrid/mixed approach, for example leading the wage markets on key roles and meet (same rate) or lag (lower) in others. When used effectively, candidates will be attracted to Companies that indicate via their salary structure that they understand the going rates for associated roles. Current employees will be motivated to stay with Companies that they trust to consistently evaluate the market and compensate equitably,

Surveys and comp data are how you find out what other people are paying for the same jobs. The first thing you need to understand about them is they give you a range for a job, not an exact number. There is no such thing. The second thing you need to understand is the data is going to be aggregated. If your leader asks, "What does company X pay for this job," surveys won't answer that question. There's a very good reason for this. Data is surveys is required to be aggregated so that you can't see what other companies are paying so that companies cannot work together to keep wages low. It's an anti-competitive thing. Understanding what surveys can and can't do is important in determining what you pay and how you explain it to your leaders.

Compensation surveys are comprehensive studies conducted to gather information on salary, benefits, and other forms of compensation within specific industries, regions, or job roles. Compensation data refers to the collected information from these surveys, which provides insights into market trends, compensation benchmarks, and competitive pay practices.

When considering the right solution, ensure that the data will be relevant for the size, industry, and job architecture of your organization. For example, if considering a survey, it should contain data on as many comparable positions as possible that match to your organization. You also want to consider benchmarking to comparable organizations in terms of size by revenue or headcount. Some surveys provide a list of participating organizations so you can view how many peer organizations are included and how relevant the survey data will be.

Quality, Comp Surveys can add value to an organization overall structure and ROI by better informing the Compensation decisions and strategy. This is not to say all Comp data will be relevant to your organization, here is where understanding your Business Objectives, HR Strategy and having a defined Comp Philosophy will be essential. Trying to apply Comp Surveys to a blank canvas does not work for the long term. Having a good foundation as it relates to your job architecture, JD design and internal benchmarking additionally establishing if you will lead, lag or meet the market will be fundamental in the relevance of the Comp data obtained and its applicability to your structure

Using compensation surveys effectively starts with job leveling and aligning each job at your company to a market title. Job leveling groups jobs with similar scope, responsibility, and complexity This ensures that your job levels are fair and consistent, and that you are using accurate compensation data when comparing apples to apples. To eliminate unconscious bias, keep employee pay and performance out of job leveling. Once jobs have been leveled, they can be compared to market data to further determine competitive salary ranges by calculating compa-ratio. Divide base salary by the market midpoint of the job the employee is matched with.

Leveraging compensation surveys and data allows an organization to be more proactive in their approach to employee compensation, rather than operating in a reactive state. The organization can be more strategic and maintain a competitive advantage by keeping a constant pulse on market compensation data and incorporating it into compensation decisions.

Competitive Advantage: Access to accurate and up-to-date compensation data helps in designing competitive compensation packages that attract top talent. Retention: By offering competitive compensation, organizations can retain skilled employees who might otherwise be lured by higher-paying opportunities elsewhere. Cost Savings: Avoid overpaying or underpaying employees by basing compensation decisions on market data, which can lead to cost savings in recruitment, training, and turnover. Employee Satisfaction: Providing fair and competitive compensation fosters employee satisfaction, engagement, and loyalty.

When setting your ranges, you can use the data to add some nuance to the data you are considering. For example, if you are hiring for a remote-first firm, and can hire anywhere in the country, you may want to exclude very high cost of living cities as a source for your talent, and instead base your salary ranges on a selection of data that excludes those cities. The more granularity there is in the data, the more nuance you can have in setting those salary ranges.

It's important to consider where the data is coming from. There are services like Glassdoor that ask employees what they are making. This crowd-sourced data isn't wrong, but has limitations. People who report their pay aren't lying, but they are often over-estimating the size of their roles. They tell these services their jobs are bigger than they are so they can get a salary estimate they can take to their boss to justify an increase. That leads to inaccurate data, which will actually decrease the market data for the roles you are looking at: the people are reporting lower than market data for jobs they aren't doing. For surveys that are sources by employers, you are getting a higher level of confidence in the job mapping and comp data.

Industry Specifics: Ensure that the compensation surveys you utilize are specific to your industry, as compensation trends can vary significantly across different sectors. Local Market Factors: Consider regional variations in compensation practices, cost of living, and labor market dynamics when interpreting survey data. Total Rewards Approach: Incorporate non-monetary benefits, such as flexible work arrangements, career development opportunities, and recognition programs, alongside monetary compensation to create a compelling total rewards package. Regular Updates: Keep abreast of changes in compensation trends and market dynamics by regularly updating and refreshing your compensation surveys and data sources.