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The beginning of our Market Pricing 101 series walked you through establishing a benchmark methodology unique to your organization and the importance of selecting surveys, documenting the data cuts and blending methods in order to ensure consistency and accuracy.
Another equally important discussion when market pricing is knowing when and how to use general industry data along with industry specific data.
General industry data is survey data for common jobs within a company, regardless of that company’s industry. This data would be for jobs in departments such as IT, Accounting, Marketing, or Human Resources. Industry specific data would cover jobs that are specific to a given industry such as Nurses, Engineers, or Retail Associates.
Think of it like this: a Physician is very specific to the healthcare industry while a Marketing Manager could exist within any given industry. To be a Physician, medical school as well as healthcare industry experience is required. However, a Marketing Manager who has worked in healthcare could easily take a job in another industry, such as retail, and be able to successfully transfer the marketing skill.
In a general industry survey, such as the US or Canada MBD: Mercer Benchmark Database, you have the option to refine your dataset by selecting from a set of industries (e.g., High Tech, Consumer Goods, Life Sciences). In the case of MBD, when you do that, you are taking the full dataset, which includes over 3,000 organizations for the US or 1,100 organizations for Canada and reducing it down to just those organizations that fit into those industry categories. This data subset, in many surveys, can then be narrowed further to reflect only the size and/or location of companies that are relevant to your organization or the jobs you are market pricing.
When using refined data cuts from general industry surveys, you need to consider how you use them. Be cautious not to combine data cuts from the same survey to avoid double counting the same data. For example, if you choose to use the "Industry: Finance" cut, you will want to avoid using the "All Data" cut when market pricing the same jobs. The responses from any company that is in the Finance industry is also in the “All Data” cut. Typically, when using more than one data scope cut from the same survey you are using them with different jobs or employee segments.
In an industry-specific survey, such as the US or Canada MCTS: Mercer Total Compensation Survey for the Energy Sector, the dataset already includes only those that identify within the particular industry. Oftentimes, the overall participant set is smaller than in general industry surveys, that isn’t necessarily a negative. The benefits of industry specific surveys include:
When using industry-specific surveys, you are typically applying those data points to specific employee segments or jobs within your organization — those that require industry experience. If you choose to blend industry survey data with a cut from a general industry survey, you'd typically also be utilizing the data refined by industry scope with the goal of diversifying your data sources.1
Effectively using salary survey data and all the various scope cuts and data elements can be challenging. And consistency is key. Developing your compensation philosophy and benchmark methodology first will help you stay consistent. From there you can effectively use our comprehensive set of general industry and industry specific salary surveys. Best of luck to you!
Need help developing your benchmark methodology? Check out the article Establishing a Benchmark Methodology Unique to Your Organization within this Market Pricing 101 series for some helpful tips and tricks.
1 Best practice is to attempt to collect at least three data points for each job when market pricing.