Managing salary surveys – Part I
Companies generally opt to conduct salary survey to better gauge their position vis-à-vis their direct competitors in relation to the limited labour market they all scout from.
Every company needs to decide its ‘pay posture’. This is how to position itself in the market to attract and keep people. This retainment approach extends also to the company’s existing staff complement. In determining its approach, the company may decide to either lead, to lag or to match up to its competition. Some companies might opt for a combined approach, whereby they lead the market for certain positions and match or lag for other positions.
The labour market, like all other competitive markets, operates along the basic economic principle of supply and demand. The ongoing rates and salaries in the market reflect the demand and availability for a skill/task. The company needs to remain flexible and adapt fast to the ongoing changes (technological advancements etc.), and market demands (consumer requirements/tastes).
Apart from pay positioning itself in the market, the company must also determine which compensation elements it is going to introduce in its mix. It is crucial that an attractive, competitive package, which includes rewards and benefits, is offered to both its prospective and current employees. If the company is lagging in its pay posture, then it needs to draw up a package that is creative in the rewards and benefits it offers, and that differentiates it from its competitors.
Salary surveys are the tools that provide the necessary data and information through which a company can better understand what and how competing employers are attracting and retaining people. By analyzing and interpreting the results of these surveys (with the assistance of experts in the field), the company will be in a better position to evaluate its competitive position, and how to react, if required.
How to use salary survey results
A company has two approaches to choose from: (a) opt for an off-the-shelf product or, (b) having a salary survey drawn up and conducted for your needs.
If opting for the off-the-shelf product, it is important to understand the methodology referred to and being used, and the standards and procedures the service provider is following. It is important to always check the date of the data collection (not the date of the publication) to avoid working with outdated data.
If the company opts to have a salary survey drawn up and conducted for its needs, then the following approach needs to be followed:
- Data collection
- Statistical analysis of data
- Understanding the results
- Sharing the results
…to be continued in Part II
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About the author
Maria Bartolo Zahra is Managing Director and HR Advisor at SurgeAdvisory. She has over fifteen years of human resources and business advisory experience.