Compensation surveys are familiar to HR professionals, but they have become even more important in recent years. As labor markets change and competition for talent grows, companies need accurate data to set pay.

But what exactly is a compensation survey, and how can it help?

When reviewing salary survey data, pay often differs by role, location, experience, and skills. The real challenge is finding reliable compensation surveys that help make fair and competitive pay decisions, since not all surveys provide the same quality of information.

What are compensation surveys?

Salary.com defines compensation surveys as "comprehensive tools used to gather and analyze data on salaries, benefits, and other compensation elements across various industries and regions." In simple terms, these surveys are reports that show how much companies pay employees for different jobs.

According to Chris Mahoney, Solutions Consultant at Salary.com, the purpose of compensation surveys includes maintaining market competitiveness, supporting talent retention, ensuring legal compliance, and guiding strategic pay decisions.

Achieve these objectives without running your own survey. With Surveys & Data Sets, your HR team and managers can access reliable salary data to make informed pay decisions and strengthen your organization’s compensation strategy.

How do salary surveys work?

Salary surveys collect information from companies about pay, bonuses, benefits, and other compensation. The data is studied to show current pay levels in the market. One well-known example is the National Compensation Survey (NCS) by the U.S. Bureau of Labor Statistics, which gives detailed data on wages and benefits across the country.

The data is grouped by job title, experience, location, and company size. This helps HR teams compare roles and see pay trends. Some providers, like Salary.com, offer Compdata Surveys, which also offer insights into pay and benefits for the industries and markets that matter most.

HR teams then use this information to set competitive salaries, adjust pay ranges, and make informed decisions about hiring and retaining employees within their organization.

5 things to look for in a compensation survey

Now that you understand what a salary survey is and how it works, let us explore five key things to look for in a survey, based on insights from Chris Mahoney.

1. Survey quality and methodology

   Check how the survey collected its data and the quality controls in place. Choose surveys that use clear, reliable methods, including ways to clean data and remove outliers. Transparency in data collection and verification ensures HR can make accurate and informed compensation decisions.

2. Relevant scopes

   Make sure the survey can be customized by industry, location, and company size. This allows HR to analyze data that reflects the company’s situation and helps create competitive, market-aligned compensation packages.

3. Sample size

   Mahoney recommends checking the survey’s sample size and diversity, including industries, job roles, locations, and experience levels. Remember, larger, more varied samples often provide more accurate and reliable compensation data.

4. Data freshness

   Check the publication date of the survey. Using recent data is important because compensation trends change quickly and up-to-date information helps set competitive salaries.

5. Peer representation

   Check if the survey includes companies similar to yours in size, industry, and market position. Including relevant peers ensures accurate benchmarking and supports strong compensation decisions.

Risks of not choosing the right survey

If your organization happens to select the wrong survey or use unreliable data, it can lead to several issues:

• Inaccurate data: Using data that does not reflect the market can result in pay that is too low or too high. This can lower employee morale, increase turnover, and make it harder to attract top talent.

• Wasted resources: HR teams may spend unnecessary time and money trying to interpret unreliable data. This diverts attention from other important tasks and reduces efficiency.

• Lack of benchmarking: Without accurate survey data, it is difficult to see how your compensation compares to competitors. This can make your pay packages less competitive and hurt your ability to retain employees.

• Complexity and usability: If the survey platform is difficult to use or understand, HR may struggle to analyze the data correctly. This can lead to poor compensation decisions and missed opportunities to optimize pay.

Whether it is a benefits survey or an executive salary survey, Salary.com offers accurate and reliable U.S. compensation data tailored to your industry, company size, and labor market. Use this data to make informed, competitive, and strategic pay decisions.

FAQs

Here are some questions about compensation surveys:

How much does a compensation survey cost?

A compensation survey can cost anywhere from a few hundred to tens of thousands of dollars, depending on its detail and the number of roles covered. Surveys that include in-demand jobs help ensure these hard-to-fill roles are paid competitively.

For example, Salary.com’s U.S. Surveys offers current pay data for different industries, company sizes, and locations. They also offer flexible participation, discounts, and quarterly updates to reflect real market changes.

How do I figure out which compensation surveys are the best fit for us?

To find the right compensation survey, find out who your peers are. Think about who you compete with for talent, the locations that matter, the industries you are in, and the sizes of similar companies.

Next, choose a survey that focuses on your industry but consider pairing it with a broader survey to get a wider perspective. Finally, contact survey vendors to learn what they offer for your sector and ask if participant surveys are available to ensure the data is relevant to your organization.

How can a survey data help shape a compensation strategy?

As mentioned, a salary survey has data driven insights about market pay, bonuses, and benefits, which help shape a compensation plan or strategy by guiding salary decisions, designing competitive pay packages, and aligning rewards with industry standards.

How often should we be looking at or participating in compensation surveys?

Experts recommend using more than one survey and having at least three data points to compare positions accurately. Many employers join surveys once a year, but some surveys are updated every three months to give the latest market data.

For example, Salary.com's IPAS Global Surveys offers HR leaders detailed pay data from peers around the world. They are updated quarterly, but only need one participation per year.