Finding the fairest and most motivating compensation for your team members is one of the most important jobs for HR leaders like you. Along with organizing your company’s structure and ensuring staff members stay engaged and motivated, determining a dedicated compensation plan is key to growing your organization and evolving over time.
A popular method of evaluating a fair employee compensation strategy is to refer to a valid compensation (or salary) survey.
Accurate, relevant, and timely compensation survey results help tremendously when benchmarking your own organization’s compensation structure.
However, for many organizations, the task of conducting a salary survey is tedious and often time-consuming. In addition, the Department of Justice Guidelines on the use of salary data must be adhered to as wages are covered under the Sherman Anti-Justice Act.
We at Astron Solutions have helped many organizations and businesses develop their HR strategy and compensation plans. With our HR consulting experience, we’ve created this guide to dive deep into whether compensation surveys are necessary and if they can help your own organization. You’ll be exploring the following topics:
You can click on the section that most interests you, but we recommend starting from the top to ensure you’re not missing any essential gaps. Let’s get started!
What is a Compensation Survey?
Ruth Mayhew’s Chron article Strengths & Weaknesses of a Salary Survey, explains that,
A salary survey generally contains data about wages. Surveys may compare employee wages inter-departmentally, by company or organization, according to job title or position, or earnings for workers in different geographic regions. HR experts use survey data for building compensation structures, or to determine if employees are receiving fair and competitive wages.
Put simply, compensation survey results provide key insights into job roles and their salaries, helping employers determine and best create their own compensation strategy.
A compensation survey can focus on job titles, geographic regions, employer sizes, and industries, and generally primarily reports on cash compensation data. That survey data is usually made up of quantifiable aspects of compensation such as:
- Base salaries
- Increase percentages/amounts
- Merit increases
- Salary ranges
- Starting salaries
- Allowances and benefits
- Working hours
You can try and find already completed compensation survey results, but it’s difficult to find one with all of your organization’s unique considerations.
Many organizations and businesses also turn to HR consultants and other outside agencies for help with administering custom surveys. These are professionals who will work with you to help create and facilitate the best survey to meet your needs.
Before you make any decisions, however, let’s review the benefits and common challenges that may come with compensation surveys.
Salary Survey Benefits
Compensation surveys can give you a key look into how other organizations are engaging with their employees. Specifically, salary surveys have the following benefits that HR leaders can take advantage of:
- Aid in salary benchmarking. The results of a compensation survey give you insight into what the highest and lowest salaries for a role in your industry are, giving you a solid range of what you might offer your own employees.
- Help employers design a total rewards compensation package. A total rewards approach to compensation is crucial if you want to not only fairly compensate your team members but keep them genuinely engaged and motivated to work. Check out our dedicated page to Total Rewards to learn more about what it entails.
- Ensure employers keep up with salary trends. When you consistently review the results of compensation surveys, you have a better sense of what’s motivating employees in your sector at the moment. Try to keep up by actively participating in and obtaining data from salary surveys and re-evaluating employees’ salaries at least annually.
- Make sure organizations recruit and retain the best employees. With the right compensation and salary plan for each role, you can better attract the top candidates to your team. Regularly reviewing salary surveys can help ensure you’re offering competitive total rewards packages that keep employees engaged for longer.
- Create a culture of consistency and transparency. When you are open about referring to compensation surveys, your employees know exactly where you’re getting their salary numbers from. Also, consistent participation shows not only your team but also interested candidates that you are transparent and justified in your compensation plan.
The above makes it seem like, why wouldn’t you get involved with compensation surveys to help aid your own HR practices and organization? However, there are some challenges that may come with compensation surveys, which you’ll learn about next.
Compensation Survey Common Challenges
Conducting compensation surveys isn’t as simple as asking your competitors what they pay their employees. Let’s go over the common challenges that may come with compensation surveys:
- Time and money into creating one. This is especially challenging if your organization is conducting a third-party custom survey made up of unique and niche job roles.
- Employer concerns including confidentiality. Direct wage information is sensitive data that no organization wants its competitors to have.
- Participant concern including confidentiality. Revealing or barely concealing survey participants’ individual data is actually against the Department of Justice Anti-Trust Guidelines. Reputable surveys that follow the necessary legal guidelines can alleviate participant concerns in this aspect. Options include buying survey reports from well-known companies that specialize in collecting & reporting data for their sector, and/or hiring a third party to conduct a salary survey for your niche sector.
- The use of bad market salary data. This will likely result in skewed compensation results. With a compensation plan based on bad salary data, you’ll not only find it hard to attract viable job prospects but also risk looking foolish by advertising a salary range that is not in line with the rest of the industry.
- Risks of turnover. It’s not good if a salary benchmarking mistake is discovered after an employee is hired or there is any adjustment (especially downward) to salary. Without your team fairly compensated, you might increase employee dissatisfaction, drive poor engagement, and risk increasing turnover.
There are some things you need to consider before you begin the custom survey process. Compensation surveys are based on data, so having the best resource is always good practice.
Conducting a Compensation Survey
Considering all the benefits and challenges listed above, a salary survey might not be 100% necessary at all times for all organizations.
But it can definitely ensure you’re fairly compensating and engaging your employees, which should always be a top concern. If you already decided that you’re interested in using a compensation survey, you’re now probably wondering how to actually conduct one.
Always keep in mind that it’s crucial to use reputable sources.
The sometimes low cost and often easy option is to refer to already published compensation surveys, whether from consulting firms, online web companies, or the Department of Labor. In fact, some solid salary survey data can be had for free through the Department of Labor’s Bureau of Labor Statistics (www.bls.gov). In addition to BLS and professional associations, job boards can be effective sources of free salary data.
However, for more specialized jobs or management or C-level roles, it is much harder to find the exact data and survey to fit your needs. For a compensation survey that can truly give you insight into your own HR strategy, a customized survey that you conduct with the help of a compensation consultant is probably the best move.
A customized compensation survey has several advantages, including:
- Being able to target competitors with the closest match to your organization.
- Collecting the most current compensation data instead of one that was created years ago.
- Specifying the exact information you want rather than exploring multiple general surveys to find what you’re seeking.
Conducting a third-party custom survey means you need to figure out the right audience to survey and come up with the key questions that will aid your organization.But as you learned in the previous section, conducting your survey consists of more than just asking people how much they’re paid. There are legal and privacy aspects to consider, so it’s necessary to partner with a reputable service that can ensure you’re on the right track.
Partner with Astron Solutions for your Salary Survey
Not only do we have expansive HR consulting services, but we at Astron Solutions also create and conduct custom salary surveys for organizations and associations in unique fields. With over 20 years of experience, we can help leaders like you with:
- Custom-developed surveys to address your unique compensation and benefits needs. We research industry trends and gain a collaborative consensus on the questions you want. Then, with a web-based survey tool, we’ll send out invitations to all of your potential participants.
- Confidentiality with your organization and employees. To protect participants’ data, we’ll report on collected information in averages and not release any organizational information to other parties. All reported fields are also only shown in group summaries. Individual responses are not displayed.
- Meeting all legal antitrust requirements. We are very familiar with the guidelines surrounding compensation surveys. To comply with the Department of Justice Safe Harbor guidelines, data is only shown for positions and statistics soliciting five or more responses. Further, all survey data are a minimum of three months old.
- Detailed reports that go past survey results. Not only do we summarize the compensation survey findings, but we also document the data submission process, legal compliance, and guidance on how your organization should interpret the data. You can receive reports in PDF or access a secure password-protected website.
Astron Solutions works with you to not only create a comprehensive and detailed compensation survey but leaves you with the resources and insight to take action after the fact. According to National Director Jennifer Loftus,
Annual and quarterly ‘hot job’ salary surveys are a key part of Astron Solutions’ services. We take pride in working with associations and private employers to help them obtain the total rewards data they need, while ensuring legal compliance throughout the process. We very much enjoy conducting custom surveys!
Is your organization in need of a custom salary survey? Astron Solutions can help!