Every organization uses its own methods of analyzing and applying salary survey results. Different surveys are used for different purposes. Some emphasize industry data, while others look more to geographic competitors. Some salary surveys look closer at organizations that match their size in in terms of revenue or number of employees. Diversity, in analyzing survey results can reflect the flexibility of the compensation manager to adjust their analysis to deal with a variety of circumstances. Important questions to ask are; with who are we competing with for the job(s), and to where and why are we losing good employees. The answers to these questions may vary for different positions in your organization. For example, you are probably competing nationally for your top executives, and will want to look for national executive surveys and compare to companies of similar size, and revenue. You also may want to look at your own industry as well as all industries. For your line level managers and hourly staff, you are most likely competing on a local market level and will want to select a survey with local competitors.
While there may not be a standard approach to salary survey analysis, there are best practices to assist you with quality and accuracy. A common first step is to ensure you are matching your jobs to the survey jobs accurately. This is the foundation on which you will build your analysis and results. Most surveys will contain only benchmark jobs that will be essentially the same across the participating companies and industries. If the job description is similar but not identical, and the survey data is not disaggregated by closeness of match, the data may be weighted according to the match. This technique is called survey leveling. If the job in the survey has more responsibilities, some analysts adjust the survey data by multiplying a percentage factor to bring its pay closer in comparability to the employer’s job. For some hybrid jobs, you may be able to look at two or more survey jobs and adjust each survey job by a percentage factor, then combine for a total salary comparison of your hybrid job. The WageWatch PeerMark™ Surveys are designed for individual industries and the job descriptions will be for the industry for which it was designed.
After you have matched your job descriptions, selecting competitors is an important next step. First, you need to select as many comparable competitors as possible in your market. Too few will not provide a good statistical output. When you look at the survey report results and see pay data that looks surprisingly high or low, it is likely that you did not have a large enough sample and a low number of matches for the position may be the cause. More than one survey report can also be helpful in analyzing data. After selecting your competitors and running your report, if you find you are missing data for some key positions or simply finding low matches on many positions, you may want to run a second report. If there are more competitors in or near your local market, rerun the report with the same competitors as your first report, adding additional competitors, select the same positions and you may find data for the additional positions. To analyze this data, you will need to compare both report results for each position. Understanding that your second report may have included competitors that may not be as close a match as your original competitor selection, the comparison of the two reports will help guide you with your analysis of the results.
Make sure you are familiar with the statistics used in the survey. For example, frequency distribution is the arranging of the data reported in the survey from lowest to highest. From the frequency distribution, surveys report the varying percentiles of the data (i.e., 25th, median, and 75th percentiles). The Median is often used by organizations as their baseline because it is the center of the data distribution. In distributions that are not symmetrical and or I which there are outliers, the Average maybe located somewhat away from the central tendency.. The median should be compared to the average. This comparison will give you a better sense of the range of pay in the data reported. A close alignment of these two will give added weight to the value and usefulness. Weighting the data is important especially when a significant amount of the data is coming from one or two competitors. A weighted average will equalize the data and provide you a better statistical result of what the market is paying for that job.
Survey analysis is about studying and understanding the data, comparing the market data to your organization’s data, knowing your competitive market, and identifying anomalies and then finding the reason. You should also include into your analysis what the survey does not give you. For example, maybe the survey is telling you that the market is paying considerably higher for a position than you are. While this is not something you want to ignore, you may find that you have long term employees in the position and have had no problems with turnover. Perhaps there are other perks or incentives that your organization provides that make up for the lower pay level.
WageWatch offers accurate, up-to-date benefit survey data, market compensation data and salary reports that will allow you to stay current with the times. This information is highly beneficial in creating the best salary and benefits packages that meet or rival the industry standards. The PeerMark™ Wage Survey is the only Web-based custom survey tool that allows individual survey participants to select their competitive set for comparison purposes. Our experienced compensation consultants can assist with your organization’s compensation needs. We can help you ensure internal equity and compliance with regulations as well as help you structure your compensation programs to support your company’s business strategy and objectives. For more information on our services, including consulting, salary survey data, benefit survey data and market compensation reports, please call WageWatch at 888-330-9243 or contact us online.