<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=690758617926394&amp;ev=PageView&amp;noscript=1">
12.jpg

Can you ask your competitors how much they pay?

Posted by Complete Payroll | Dec 26, 2017 7:00:00 AM

Can you ask your competitors how much they pay_.png

Our clients often inquire as to whether their employee compensation and benefit packages are competitive with respect to current market conditions and industry standards. In fact, it is an HR best practice to evaluate the company’s compensation and benefit programs on an annual basis. So where do you begin to get accurate and timely industry data for benchmarking purposes?Click to learn more about HR Support Center 

Often, the best resource for this information is your industry’s professional organization. Many professional and industry organizations collect data from their members regarding compensation and benefit standards on a regular basis. Thus, if you are a member of a professional organization, we recommend inquiring as to whether they publish such data for their members’ use.

When performed and filtered correctly, salary survey data can provide useful and actionable information to assist your organization in attracting and retaining top talent.

Another valuable resource is the Department of Labor’s Occupational Employment Statistics (OES) database. OES estimates are published on the Bureau of Labor Statistics’ website. Included within this compilation are cross-industry data for a variety of positions within the United States as a whole, for individual states, and for major U.S. metropolitan areas. The website address for OES data is: www.bls.gov/oes. The data published here tends to lag approximately one year behind the current date. For example, the most recently compiled data was last updated in May 2013. 

A third resource is the utilization of private salary survey data available for purchase through private organizations. If you opt to use this alternative, we recommend first researching the vendor’s methodology of data collection to ensure that it is relevant for your purposes. Some of these organizations simply synthesize the OES Data and provide it to you for a fee, so you will want to ensure that you are receiving value added data which is actionable and useful for your organization’s benchmarking needs. 

A final option is to directly survey your competitors. While this might sound tempting, we do not recommend it. Employers are not allowed to collude with competitors to fix salaries and even casual conversations about salary levels may open you up to liability. To ensure that you are not inadvertently violating antitrust law, the U.S. Justice Department recommends having compensation surveys managed by third parties using data that is at least three months old from at least five entities.

Regardless of where you obtain the data, there are some universal items to consider when using the compensatory information for benchmarking purposes:

  • Consider the source of the data (organization size, industry, client profile, etc.)
  • Ensure the collection methodology is has produced results that are statistically credible (both valid and reliable)
  • Confirm that the information is geographically relevant to your organization
  • Check the data collection year for relevance
  • Ensure that the position titles and job descriptions closely align with those of your organization
  • Determine whether the survey includes the typical education and experience level for the reported data
  • Consider whether the survey is reporting the total compensation package or salary alone

When performed and filtered correctly, salary survey data can provide useful and actionable information to assist your organization in attracting and retaining top talent. So, find a benchmarking method that works for your company, and ensure that your compensation levels are where you want them to be.

Learn more about Complete Payroll's very own HR Support Center.

Topics: Salaries, Human resources

Written by Complete Payroll

We do payroll, HR, timekeeping and more for employers all over the country from a small, rural town in Upstate New York. And we're constantly publishing articles and other resources to help business owners, HR managers or anyone that helps manage a workforce. Welcome to Payroll Country!

Are you using our free resources?

We're constantly publishing free tools to help with payroll, HR and other administrative objectives.

New call-to-action
New Call-to-action

Subscribe to instant blog email notifications

Recent Posts

General Disclaimer

The materials and information available at this website and included in this blog are for informational purposes only, are not intended for the purpose of providing legal advice, and may not be relied upon as legal advice.  The employees of Complete Payroll are not licensed attorneys. This information and all of the information contained on this website are provided pursuant to and in compliance with federal and state statutes. It does not encompass other regulations that may exist, including, but not limited to, local ordinances. Complete Payroll makes no representations as to the accuracy, completeness, currentness, suitability, or validity of the information on this website and does not adopt any information contained on this website as its own. All information is provided on an as-is basis.  Please consult an attorney to obtain advice with respect to any particular question or issue.