Considerations when managing your salary survey purchasing budget
You probably know that best practice is to have multiple data sources when market pricing jobs. The idea is that you will be able to smooth out the highs and lows of different salary surveys as well as have enough data to choose from should there be anomalies or jobs not reported in a particular year. The goal would be to have three data sources — typically from different survey vendors. Three sources is often not possible, though due to budget constraints. So, what should you focus on when selecting salary surveys for your organization to ensure you’re getting the most out of your budget?
Here are three of the most important things to consider:
- Coverage
- Cost per job
- Coordination
Coverage
How much of your population is covered by the data the survey provides? In terms of geographies, specialized jobs, and levels and branches of your job architecture, is a significant proportion of your population covered? Are there large gaps, meaning do you need other surveys to get proper coverage?
A key aspect of coverage is understanding how representative the survey data is of the entire market. It is crucial to ensure that the survey captures a significant proportion of your population, allowing for accurate benchmarking and informed decision-making. Inadequate coverage can lead to incomplete data, which may result in suboptimal salary and pay decisions.
Comprehensive coverage should encompass specialized jobs within your industry. Different jobs often have distinct salary ranges and compensation structures. By utilizing a survey that covers a wide range of specialized jobs, organizations can make accurate salary comparisons and adjustments based on specific roles.
Lastly, coverage should extend to different levels and branches within your organization’s structure. This ensures that the survey data is applicable to entry level employees, executive employees, and those in between. It allows for accurate analysis and decision-making at different levels within the organization.
Cost per job:
Take the total cost of the salary survey and divide it by the number of jobs you can reliably price using that survey. The ratio that results will allow you to compare the cost-effectiveness of one survey to another and help you make decisions year over year on how to manage your survey library.
Determining the cost effectiveness allows you to assess if the survey provides a reasonable return on investment given the data provided helping you use your budget effectively. It is a great tool when comparing different surveys and deciding which might be the best option for your needs and budget.
|
Survey A |
Survey B |
Number of countries included* |
10 |
3 |
Number of jobs included* |
1,000 |
500 |
Cost |
$18,000 |
$1,400 |
Cost per job |
$18,000/(10*1,000) = $1.80 |
$1,400/(3*500) = $.93 |
Coordination
How easily can you incorporate this survey’s data into your market pricing tool, whether that’s an Excel spreadsheet or a particular software? Is it an arduous process or an easy automated upload? And, what support can the survey vendor provide?
Having the survey data is great, but being able to utilize the data is obviously a necessity. Understanding how to upload the survey data quickly and easily into your market pricing tool not only saves you time and resources, but also enables you to quickly access that data when needed. If you had to go through 15 different steps every time you needed to access a data point then it’s worth considering the effectiveness of that survey to your organization.
You should also be familiar with the scope of the survey vendors support team. Can they help you with data integration? Are they readily available to address technical challenges when the arise? And arguably the most important, do they offer ongoing support. Compensation planning is an ongoing process so it’s essential to have an ongoing relationship with your salary survey vendor.
While these are not all the things you need to consider when selecting salary surveys, these three considerations will give you a quick framework to evaluate what you have and to determine whether participating and purchasing in the coming year makes sense. Additionally, it can help you identify any gaps in coverage — where might you need to seek out an additional survey to better support you in market pricing? As your organization inevitably evolves, it’s likely that you may need a different mix of general industry and industry-specific market data.
Don’t know where to start? Mercer is here to help. Take a look at some of these articles below or give us a call at 855-286-5302.