It’s an employee’s job market, but not all employers have gotten the memo. The Great Resignation-turned-Great Reshuffle disrupted traditional ideas around compensation, benefits, and retention strategies. Navigating today’s job market requires good data on industry best practices, especially around salary.
What is a compensation survey?
Even without the upset caused by today’s labor shuffle, onboarding a new employee is far more expensive than 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 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 spend upwards of $150,000 to fill that role.
This is one reason 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 compete 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 attract and retain top talent competitively. Compensation surveys can also provide additional value. For example, pay studies can help determine if employees’ salaries comply with current employment, state, and federal laws. Pay equity studies have recently emerged as a specialized 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. Associations often don’t need a complete survey to secure the data required for an internal salary review. Benchmarking data from ASAE, SHRM, and other organizations with data collection roles may be available.
What to consider before you survey
The more data associations collect through salary surveys, the more valuable a breakdown can be provided to members. Breaking down wage data can give 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 valuable it is to your audience.
That said, associations must pay attention to the context in which data is provided. Benchmarking pay data can be a slippery slope. While a compensation survey aims to ensure that companies remain competitive with what they’re paying, providing data without context can risk deflating wages in the industry. Associations must 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 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. Contact us today if you’re ready to secure new insight for your association’s members.