How to Use Custom Salary Surveys to Optimize Your Pay Structure
Custom salary surveys help you optimize your pay structure by providing specific data about typical salaries in your industry. This information allows you to set competitive and fair pay rates for your employees. Matching your compensation packages to niche job salary data helps you more easily attract and retain skilled workers.
| “Your employees, current and future, have industry-specific expectations. Ensuring your organization meets or exceeds them is part of what keeps you competitive.”– Larry Beers, Director of Consulting, JER HR Group |
According to Robert Half, 38% of employees who quit their jobs did so because they felt their employer’s salary and benefits were below industry standards. Yet, without the right compensation data and analysis, it isn’t always clear what standards should be.
Custom salary surveys help you avoid that issue. That’s why this article will explore what a custom salary survey is, how to conduct one, and additional key benefits.
What is a Custom Salary Survey?
A custom salary survey is a tool that helps organizations understand how competitive their pay scales are within the job market. This survey gathers detailed compensation data, such as average salaries, variable pay, and benefits, from participants within relevant industries or job titles.
Organizations can then use the data collected to help themselves make informed decisions about how to adjust and plan their salary structures effectively.
How to Perform a Salary Survey
1. Identify Objectives
Begin by defining what you want to achieve with your salary survey. This could be understanding market pay rates, identifying pay disparities, or salary benchmarking. Knowing your goals will help you ask the right questions in your survey.
2. Define Expectations
Set clear expectations for what the survey will cover, including which job roles and compensation elements (like base pay and/or benefits) will be analyzed. This helps in designing the survey to capture the most relevant data for your needs.
3. Determine Survey Format
Decide on the format of your survey. This could be online, paper-based, or interviews. An online survey is often the most efficient as it’s easy to distribute. However, the average response rate for online surveys is only 44.1%. Therefore, paper-based surveys or interviews will likely collect more data.
4. Develop The Questionnaire
Create a survey questionnaire that asks precise questions about your targeted compensation elements. The questions should be straightforward to avoid ambiguity and ensure the data collected is valid and reliable.
5. Identify Potential Participants
Select a representative sample of participants from relevant industries or job descriptions. Aim for some diversity as that helps you collect comprehensive data that accurately reflects current market trends.
Get More Tips on How You Can Optimize Your Pay Structure |
6. Finalize The Participant List
Review your list of potential participants and finalize it. Ensure it includes a wide range of organizations that are comparable in terms of size, industry, and job roles.
7. Build a Communication Plan
Develop a communication plan to engage with the participants. This should include initial invitations, reminders, and any updates. Effective communication is key to encouraging participation and ensuring the success of the survey.
8. Administer The Survey
Distribute the survey according to your chosen format. Make sure to track responses and follow up with participants as needed to maximize response rates. Regular follow-ups have been proven to increase response rates by 20%.
9. Analyze The Data
Once the survey is completed, analyze the data to extract meaningful insights. Look for trends, patterns, and outliers. This analysis will form the basis for your final report and recommendations.
10. Prepare & Present Findings
Compile the findings into a comprehensive report. Present the data clearly and concisely, showing how it meets the survey’s objectives. Include visual aids like charts and graphs to help illustrate key points.
How to Conduct an Employee Compensation Analysis Based on Salary Survey Data
Conducting an employee compensation analysis using salary survey data allows you to assess how your organization’s pay scales compare to industry standards. Here’s a quick checklist of what to look for after your survey.
| ☐ | Analyze Market Data | Compare the gathered salary data against your organization’s current employee compensation.
Identify where your organization stands in terms of pay competitiveness by examining variances in base pay, variable pay, and benefits. |
| ☐ | Identify Trends & Discrepancies | Look for patterns or discrepancies in the data, such as departments where pay is consistently below market rates or roles that are outliers.This helps to pinpoint areas where your compensation strategy may need adjustment. |
| ☐ | Assess Pay Equity | Evaluate the compensation analysis for pay equity issues.Ensure that employees performing similar work with comparable experience and performance are compensated equitably, regardless of gender, ethnicity, or other non-performance-related factors. |
Please note that this checklist is very simple. Chances are, you will need to add additional line items based on your specific industry and goals.
Benefits of Conducting a Compensation Survey
Legal Compliance
Conducting regular compensation surveys helps ensure that your organization complies with local and national laws regarding fair pay practices. This proactive approach can reduce your risk of legal disputes related to compensation.
Budget Planning
Compensation surveys provide critical data that assists in more accurate budgeting for payroll expenses. Organizations can forecast future compensation costs and allocate resources more effectively based on current market trends.
Organizational Benchmarking
By comparing compensation practices with those of peers and competitors, organizations gain valuable insights into where they stand in their industry. This benchmarking can inform strategic decisions beyond just compensation, such as operational improvements and strategic positioning.
Policy Development
Insights from compensation surveys can guide the development and refinement of HR policies. For example, they can influence decisions on promotions, pay increments, and bonus structures by ensuring these policies are aligned with market standards.
Strategically Tailor Your Custom Salary Surveys With HR Experts
Determining why you should conduct a survey and who should participate in the survey can be unclear. Even if you know what you want to achieve, you may not know exactly what you need to do to gather that information.
If that sounds like you, JER HR Group can help. We have over 30 years of experience in the HR industry and are experts at compensation analysis. Typically, we can help you complete a custom salary survey within 10 to 12 weeks depending on the scope of your project.
Reach out today if you’re interested.