High-quality, reliable salary survey data creates a competitive advantage for every organization that takes advantage of it. It’s a valuable resource that can help compensation and HR professionals create and maintain relevant, high-impact compensation programs that solve various workforce and organizational management issues.
But how do you leverage survey results in way that gets you from point A (gaining access to salary survey data) to point B (making intelligent pay decisions based on that data)? We’re here to tell you.
First, you need to identify your specific salary data needs. What problems need to be addressed? What information do you want to know? The answers to these questions bring clarity to the specific data you need as you review your survey results.
For example, when benchmarking pay trends for a particular job function, you could choose to access data cuts from your immediate industry, a competing industry or a specific geography. For a more targeted approach, you also could define a peer-group report and choose the talent competitors that are stealing your talent – or those competitors from which you’d like to steal.
Benchmarking other Total Rewards elements such as short- and long-term incentive levels or benefits, for example, also will help ensure that what you’re offering is market competitive.
Once you’ve collected your salary survey data, it’s time to study and understand the results. Initially, you will want a high-level understanding of how the market has moved, and then drill down into different functional areas, contributions levels and jobs. If you have dedicated compensation software to support the analysis, a quick update of the benchmarks you previously created will enable you to see where you should focus your analytical time and effort.
To identify insights without dedicated software, you will need to develop Excel lookup tables and complex year-over-year analyses to understand market movements. In this case, collating the data for analysis can be labor-intensive – especially when you’re working from home across a VPN and potentially on a laptop screen.
Regardless of which path you take, your aim in this step is to define your focus: Which businesses or functions are struggling with pay issues and why?
After defining the most acute issues, the insights you’ve collected to this point should give you a better understanding of what’s happening in the market (e.g., demand for hot jobs and their corresponding pay trends, how current external factors are influencing pay). These insights help you gauge the interventions you may need to maintain market competitiveness – and how much it’s going to cost.
A variety of circumstances have caused – and will continue to cause – changes in talent and pay trends. For example, in the past few years some talent markets have changed so much, the shift is likely permanent. An increased focus on driving environmental, social and governance (ESG) change is driving new talent demands. Innovations in different industries are causing a demand for new and/or different skills.
Analyzing data for these types of trends increases your understanding of how your organization will be affected. “Digital skills are in high demand” may be the headline, but you need to understand the specifics around this so you can pivot quickly – and appropriately – to address potential skills shortages and talent leakage.
Over time, these changes create patterns that become valuable insights, and this helps you better understand market behavior and tendencies. Studying these changes and their impact will give your organization the chance to forecast issues and develop appropriate responses to mitigate risks.
Challenges brought on by seemingly never-ending global and regional changes are triggering an increase in the need for more customized and actionable insights. Depending on your location, industry or organizational size, you may be wondering:
When the answers to these questions don’t rise to the surface of the data you have on-hand, it’s time to go a step further and explore customized salary data and analytics. A bespoke combination of comprehensive data, technology and human intelligence can provide a critical differentiator as you define the best way for your organization to maximize its compensation budget.
Once you have your insights, it’s time to make decisions and act. Where should you spend your limited budget to get the most from your money? The balance between market competitiveness, individual or team performance and internal equity should always be at the forefront of any compensation strategy.
Affordability and the principles you’ve established in your rewards strategy will help you strike the right balance as you consult with your finance and leadership teams to develop a strong business case using the data and insights you’ve collected.
Data is the key to making your business case, but so is your ability to build that data into a story that creates a compelling argument for your compensation spending recommendations. And that’s what will support your organization’s ability to attract and retain the talent it needs to drive your business forward.