Salary and Benefit Surveys: Can I Ask My Competitors How Much They Pay?

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?

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.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.

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