salary survey supplier influence

Salary surveys and supplier influence on provided data

Salary surveys and supplier influence on provided data is an important matter to all organizations. Salary surveys influence important decisions within the companies that have the practice of using them. This decisions have a direct impact in the life of a their employees. This is why it’s very important to understand the differences between the salary surveys available on the market and choose the most adequate for your objectives.

First of all, it’s very important to see whom are the companies that make salary surveys. On our list we have:

  • HR consultancy companies
  • Companies with tradition in salary surveys
  • Recruitment companies
  • Websites that collect input from their users
  • HR Analytics software companies
  • Payroll companies
  • Professional associations
  • Official statistic institutions

Each supplier uses different methodologies when it comes to collecting salary data, processing the data and especially different job comparison methodologies. Some companies use rigorously collected data, straight from each company, while other collect data through crowd source.  As previously mentioned, the methodology through which jobs are considered similar is different depending on the supplier type. Some companies make a job matching based on the position name while other companies look at the job content, ignoring it’s name. When we say job content we refer to know-how, competencies, skills, responsibility, types of problems that need to be solved, etc. These are the main ways salary surveys suppliers can influence the provided data.

The supplier through it’s specificity will influence:

  • the accuracy of jobs considered similar
  • the type of data collected
  • the quality, diversity and availability of data
  • the sample of relevant companies
  • the stability of data form a salary survey edition to another
The Salary Surveys created by HR advisory companies with tradition in salary surveys have 3 very important characteristics:
  1. Data collection is made at employee level directly from the company through the HR/Finance department – rigorous methods are applied to check and assure data quality and compliance
  2. Jobs are mapped through a methodology which takes into account the job content and not it’s name
  3. Job evaluation methodology is applied in a consequent way among all the participant companies

These surveys are recommended to be used in salary review process because of their high accuracy.

The standard values offered by this studies are the 5 percentiles: 10, 25, 50, 75, 90 (available when the sample has enough participants).

Surveys made based on the direct input of employees (crowd source from websites users):
  • usually, based on a job matching methodology with criteria like: job name, department, number of employees managed, company turnover, education, etc. Do not take into account the job content.
  • offer limited control on the quality of the data input done by the user
  • aim to offer guidance to candidates in their recruitment process or guidance to employees that want to renegotiate their reward packages
  • not recommended to be used directly in our reward policies
Surveys created by payroll providers:
  • usually use a job matching methodology with little attention to job content
  • compared to the crowd sourced surveys they have the benefit of using data for all employees within a company

On thing is for sure, the methodology used by a supplier to evaluate if jobs from different companies can be considered similar is very important and should determine if we are going to use or not a survey.

Surveys created by recruitment companies:
  • they also use a job matching methodology with little attention to job content
  • usually collect information regarding salary expectations of candidates

A very good source of information regarding salary expectations.

We all know that, in most cases, there is a gap between the salary that would determine a person to quit a job and the salary of that employee.

If we speak about the surveys made by HR Analytics software solutions, well, in our opinion they are worth our attention in the future. They will definitely have high accuracy and if the traditional salary survey providers will not evolve they will lead the market.

Reducing all of the above to an extreme simplicity we can say that there are surveys that depict:

  • Reality (approximate) – studies done on data collected directly from each company through the HR / finance department, based on job evaluation methodologies that take into account job content
  • Salary expectations – studies made on the expectations of candidates
  • Values that can be discussed at interviews – crowd sourced studies which are pretty much the only source of inspirations for candidates and employees

Please note that all of these are marketed as salary surveys. It is very important to have a critical thinking process regarding the provider business and methodology before deciding to base your pay decisions on their survey. As you can see there are plenty of ways salary surveys can be influenced by the supplier.

In conclusion, there are 2 very important elements that should influence the decision of using a salary survey:

  1. Job evaluation methodology
  2. Salary source and collection method
Why is the methodology important?

Let’s analyse an example:
We have 2 HR Manager positions in different but similar companies from the same industry. We have the following data for both positions:

  • Company turnover: 15 million euro
  • Company dimension: 350 employees
  • Management position: Yes
  • Number of employees coordinated: 5
  • Education: Master
  • Experience on position: 3-5 years

Using a methodology that matches jobs both positions will be considered similar. In this case the above information is enough to map jobs.

Using a provider that has a job evaluation methodology oriented towards job content the above information it’s not enough. The methodology needs more info and just for the sake of the example here are some facts regarding the job content of the 2 positions.

HR Manager 1 – coordinates 2 recruiters, 2 admin professionals and 1 payroll.

HR Manager 2 – coordinates an HR Analyst, one HR Generalist and 3 HRBP’s, payroll and recruitment are outsourced. This positions is also in charge of budgets and the manager is part of the board.

Is it correct to consider the two jobs similar? Because in the case of a salary survey based on matching they will be considered similar. Of course, the discussion based on the job evaluation criteria that considers job content is more complex and will be subject for another article.

Choose wisely!