How industry compensation surveys can help you navigate workforce challenges
When you think about how workers are compensated at your organization or in your industry, do you ever feel like you’re driving down a pitch-black road with your headlights off and no landmarks to guide you? Are you anxious about your best employees leaving to work in competing organizations, industries or regions? While it might be little consolation, take comfort that it’s not just you—all organizations today are facing very similar human resources challenges due to external factors:
- An extremely high employment rate that has employers fighting over talent
- An inflation rate that pay raises often can’t keep up with
- New market dynamics that are changing workforce needs
- Globalization attracting new employers to the country
- The rise of remote work opening up new possibilities for workers
It is clearly more important than ever to keep your compensation strategy competitive. The question is, how do you do that?
Your overall vision
In essence, compensation should be part of your organization’s overall vision, which is defined by its culture, business strategy and HR strategy. This will help you design a competitive compensation program to keep your employees satisfied and engaged while supporting the organization’s objectives. This means your compensation program should align with your overall vision and look at all aspects of compensation, not just pay.
Once you have determined your overall vision, you should decide which aspects of compensation you want to focus on to achieve your recruitment and retention goals, taking into account your ideal employee profiles, your organization’s culture and, of course, how much you are able to pay. One of the best ways to figure this out is using compensation data, up to date, relevant to your situation and drawn from reliable sources.
The data source: a differentiating factor in compensation
Organizations now have access to a wide range of tools and sources they can use to find compensation data, including recruitment agencies, websites like Glassdoor, LinkedIn and Payscale, internal recruitment processes and national data banks.
That being said, some generic data sources are not always transparent about their methodology, and while most of them provide data on direct compensation (meaning wages/salaries, salary ranges and bonuses), very few of them can tell you about other aspects of total compensation, your own comparative market and the specific types of positions you need to fill.
These sources might leave you with more questions than answers:
- Did they use reliable methods to collect and compile the data?
- What job levels are they using?
- Is the job matching accurate?
- Is the sample representative of your industry, organizations of your size and your geographic location?
This is why many organizations looking for a more complete and useful picture of compensation practices are turning to sources that capture more specific data, such as custom surveys and industry surveys.
Why conduct an industry compensation survey?
In an industry compensation survey, a representative sample of organizations in a particular industry are directly surveyed to collect specific data about how the jobs chosen for the survey are compensated. Questions can also be asked about the different components of the participants’ compensation programs. This type of survey usually takes four to six months to complete, depending on the sample size and how niche the benchmark jobs are, and are often eligible for government subsidies.
While an industry compensation survey requires a bit more work upfront, you’ll reap the rewards in the form of much higher quality and timelier data. And when conducted with best practices and key success factors in mind, the industry survey can also:
- Provide a full picture of your industry, plus relevant data (both qualitative and quantitative) about your markets and specific jobs
- Address specific issues by probing on elements currently experienced by your members
- Break the results down by industry, geographic location, union status, number of employees and so on to find the data most relevant to your situation
- Maintain participant confidentiality and ensure data quality (a specialized compensation firm can take care of the data processing and quality control to make sure the data is reliable and accurate)
While there are a number of tools that can help an organization overcome its workforce challenges, industry compensation surveys are noteworthy for the valuable insight they provide about salary forecasts and total compensation practices in a given industry. By relying on more accurate, up to date and relevant data, executives can get a better grasp on trends and more effectively position their total compensation strategy—based on their own criteria—to help their organization achieve its business goals.
In a full employment economy where skilled workers have the upper hand, an industry compensation survey gives organizations a kind of roadmap, helping them see how they stack up against their market competitors and make the right decisions to get where they want to go—without too many detours along the way.
Let’s keep the conversation going…
At PCI, custom and industry compensation surveys are one of our strong suits. We conduct many such surveys for private companies, non-profits, committees and associations in a variety of industries every year. Contact us if you would like to discuss your specific needs with our experts.
- Evelyne Gaudreau, consultant
- Catherine Bernard Lapointe, M.Sc., Senior Analyst
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