It’s an employee’s job market, but not all employers have gotten the memo. The Great Resignation-turned-Great Reshuffle is upsetting traditional ideas around compensation, benefits, and retention strategies. Navigating today’s job market requires good data on industry best practices, especially around salary.
Pew Research found in a study that 63% of employees who quit their jobs in 2021 cited low pay as the top reason. The reasoning was consistent for both blue and white-collar employment sectors alike. Salary studies can help association members ensure their pay practices are competitive and help bridge disconnects between employer and employee compensation expectations. As salary studies become more common, this association trend is further expanding on the value these surveys can provide.
What is a compensation survey?
Even without the upset caused by today’s labor shuffle, the cost of onboarding a new employee is far more expensive than the cost of retaining one at a competitive wage. One benchmarking study from the Society for Human Resource Management put the average cost per hire at nearly $4,700. However, some employers estimate the total cost of hiring a new employee as closer to three to four times the position’s salary. If you’re hiring for a job that pays $50,000, you may end up spending upwards of $150,000 to fill that role.
This is one reason that compensation surveys have become valuable tools for providing information about companies’ pay practices. These surveys are often used to collect data that helps determine if they are competing for a specific industry, geographic location, company size, position, and other benchmarking factors. This information can arm your members with data that helps them make informed decisions to competitively attract and retain top talent.
See also: How Research Can Benefit Your Association: Benchmarking Surveys
Compensation surveys can provide additional value as well. For example, pay studies can help determine if employees’ salaries are in compliance with current employment, state, and federal laws. More recently, pay equity studies have emerged as a specialized type of compensation review and association trend. Pay equity studies analyze pay according to demographic information about gender, race, or other factors. These studies have been driven by factors that include the rise of remote work, new laws involving pay transparency, and increased calls for workplaces that embrace diversity, equity and inclusion (DEI). Many companies have formed benchmarking committees specifically focused on improving their organizations’ DEI and making their compensation practices more consistent. For many of these committees, pay equity is high on the agenda.
An internal salary review can also provide associations with benchmarking data that ensures they compensate their staff based on data comparing their compensation with that of similar organizations. In many instances, associations don’t need to perform a full survey to secure the data needed for an internal salary review. Benchmarking data may be available from organizations such as ASAE: The Center for Association Leadership, the Society of Human Resource Management, and other organizations that have a data collection role.
What to consider before you survey
The more data that associations collect through salary surveys, the more useful a breakdown can be provided to members. Breaking down wage data can provide a clearer picture of comparable wages at similar companies based on size, revenue, number of employees, geographic location, and more. The more ways you slice and dice the data, the more useful it is to your audience.
That said, it’s critical that associations pay attention to the context in which data is provided. Benchmarking pay data can be a slippery slope. While the aim of a compensation survey is to make sure that companies remain competitive with what they’re paying, providing data without context can risk deflating wages in the industry. It’s critical that associations ensure compliance with all relevant regulations and security around pay data.
The sensitive nature of this data also makes many companies understandably hesitant to be completely forthcoming about their data. With guardrails in place, organizations provide members with data that allows them to better care for their employees and achieve their goals. For many organizations, this may mean engaging with a trusted third party to gather and analyze the information. This can provide a level of distance between associations and member companies, instilling trust in security practices.
This is an area where Vault can help. We’ve helped numerous clients safely and effectively collect data for compensation surveys. If you’re ready to secure new insight for your association’s members, contact us today.