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Article | Beyond Data

Small organization? Big HR plans? Compensation data helps

By Hatti Johansson | April 13, 2023

The right research and preparation will ensure your approach to compensation is aligned with your industry — regardless of budget constraints.
Compensation Strategy & Design
Beyond Data

For small and mid-size organizations, it can be incredibly challenging to design pay plans that are robust enough to attract the right workforce to support your business strategy at an affordable price. However, the right research and preparation will ensure your compensation strategy is in-step with your market — regardless of budget constraints.

Overall, compensation data supports a competitive pay strategy, even if you’re searching for information on just a few positions. But to truly maximize your investment in survey data, there are specific steps you need to take.

  1. 01

    Understand the data coverage you need

    As you begin the compensation planning journey, assess your data needs. Make certain that anything you purchase meets your specific requirements. This helps keep costs (and your effort) low.

    For example:

    • What are the current talent issues most pressing in your organization or industry? Think about factors like attraction, retention, cost control, unions/works councils and so on.
    • What is your current rewards philosophy and strategies? Do you have one? Has it been effective, or does it need reshaping?

    A solid business context helps you identify the most relevant data for your needs as well as the best recommendations for your business.

  2. 02

    Determine your benchmark jobs

    One of the most challenging aspects of determining employee compensation is categorizing your positions so you can compare your compensation relative to your competitors. Recruitment or crowdsourced data may seem like a safe and easy source, but it’s important to recognize that the reliability may not be up to par. These firms aren’t staffed with data experts who understand the nuances of the pay information and the quality controls needed to ensure an objective approach is followed to eliminate the risk of inflating or misrepresenting the figures. You need to know you can trust the data you are using to strategically plan your rewards approach.

    A simple benchmarking establishes anchor points that represent the depth and breadth of positions across your organization. For example, some common benchmarks for deciding pay include:

    • Top HR executive
    • Finance manager
    • Sales representative
    • Accountant
  3. 03

    Define talent market criteria

    A talent market is where you compete and recruit for — as well as lose — employees. You may not have time to fully understand each talent market in which you compete, and that may compel you to “go with your gut.” On-the-job experience certainly can play a role in how you approach your strategy for attracting and retaining employees, but it can also be hard to defend with senior leadership comes asking for quantitative data. “It feels right” isn’t good enough.

    Even if you just need a snapshot, talent markets to consider include:

    • Industry
    • Organization size
    • Geographic area
    • Employee classification (e.g., full-time, part-time, exempt, nonexempt)

    The more specific you are about each talent market, the easier it is to discern pay practices or comparable rates.

  4. 04

    Compare quality

    Once you understand the data you need, your job benchmarks and the criteria against which you want to compare, you can compare the quality of the offerings from various data vendors. Some things to consider when choosing a compensation data source:

    • Reliability. Is there a strong process for gathering and cleaning the data? Is it submitted by compensation and/or HR professionals?
    • Robustness/sample size. Are there enough relevant companies in the sample size? What about the data reported?
    • Pay elements. Does the survey include the information you need? Think about base pay, total cash, long-term incentives, total direct compensation and so on.
    • Simplicity. Is the report format easy to understand? Do job descriptions match what you need to present to your managers?
  5. 05

    Find the right product

    In addition to evaluating available research, it’s important to compare vendor products. When choosing a product, consider:

    • Is the product quick and easy to use?
    • Is data interpretation advice offered?
    • Does the total cost seem fair relevant to the value it presents?

‘Small’ or ‘mid-size’ doesn’t mean a small or mid-size approach

As an HR leader in a small or mid-sized organization, you likely know most, if not all, of your employees and their needs. Pay is a complex and highly sensitive topic, and getting it right is hard.

The time it takes to submit your data into a compensation survey can be overwhelming, especially if the process is unfamiliar. And that’s what makes finding the right data partner so critical. You need support to get data for your positions so that you can effectively attract and retain the right talent to take your organization forward.


Global Innovation and Product Development Leader, Rewards Data Intelligence
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