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September 24, 2015 in Payroll

Payroll for Small Businesses: Using Salary Surveys

Using salary surveys to test the competitiveness of your pay and rewards structure is a basic element of compensation planning. They show you where your compensation stands in relation to other companies with similar positions, so that you don’t lose qualified people to competitors offering more lucrative paydays — or offer richer-than-necessary packages yourself.

New York Payroll for Small Businesses


Don’t Rely on Just One Ingredient

Even when you’re armed with the most current, statistically valid, job-appropriate data, you still have work to do. You have to temper the information with the reality of your business. Basing salaries solely on survey data means that you may be leaving out important elements in your compensation program, including:

  • Industry trends, such as a nationwide shortage of a particular kind of skill,
  • Local conditions you may have to accommodate for, such as a geographically undesirable location or high cost of living, and
  • Specific issues in your company, such as phasing out a product line

The key to maximizing the surveys’ effectiveness is to choose the right one to meet your needs, interpret the data correctly, and blend survey data with other information that’s specific to your organization, industry and market. It’s a tall order to fill. But by taking the time to research your needs and available data, you’ll put yourself in a position to create a compensation package that’s desirable to employees and appropriate for your organization.

Plentiful Sources

You can get salary data from any number of sources, including:

  • Salary research and consulting firms, such as Mercer, Economic Research Institute and Radford Surveys,
  • Industry associations,
  • U.S. government agencies, such as the Bureau of Labor Statistics and Department of Labor,
  • Local organizations, such as the Chamber of Commerce,
  • Job listings, and
  • Colleagues and other networking contacts.

All salary information sources have their pros and cons. For instance, statistics from the Department of Labor and other government sources might offer the specificity you need in job descriptions, but the data may not be up to date. Research and consulting firms offer thoroughly vetted and current data, but it might be costly or not adaptable to a specialized workforce. Also, consider sources where your employees are getting data, such as and

So look carefully at the upsides and downsides of various sources for salary data and weigh them against your own needs to find the right source, or combination of sources, for your situation.

Survey Preparation

Regardless of the sources you use, make sure the data you’re using or paying for will be as useful as possible. Examine key areas, such as:

Dates. Like a new car that loses value the minute you drive it off the lot, salary surveys start “aging” the moment they’re released. As data ages, question its value relative to changes that have occurred in your market area.

Sample size. Determine whether the overall sample size is big enough to be statistically valid. Also, review different cuts of the sample — such as region, industry and company size — to evaluate how useful the resulting information will be to your company. For instance, a survey with a large overall sample but little West coast participation is probably not beneficial to a company in Seattle.

Methodology. Familiarize yourself with the collection, screening and verification methods used by the individuals or organizations offering the data. If these details aren’t readily available, you’ll have to trust that the resulting information will be applicable to your organization.

An Essential Seasoning

Good cooks know that every dish needs a dash of salt to bring out the flavors. In many ways, salary surveys are the salt of compensation design — they’re a basic ingredient that should never be overlooked. Fortunately, they also come in an array of varieties so you can pick the one that best meets your needs. But, if salary surveys aren’t used appropriately, your compensation strategy will lack the flavor you desire.