Conducting an Effective Salary Survey for Your Organisation

Employee pay has always been a critical element of the employee experience. But it’s no longer enough to consider how much each employee is paid. People also want to know they’re being paid fairly.  

One of the best ways to solve this issue is through a salary survey. This allows HR professionals to maintain competitive and fair compensation practices, which can boost the satisfaction of employees and attract top talent. These surveys are also a crucial element of the move towards transparent, equitable pay.

Here’s everything you need to know about why salary surveys are so important, plus how to get them right. 

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What is a Salary Survey?

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Salary surveys, also known as pay surveys, help organisations collect compensation data for specific roles across industries or regions. 

These surveys typically collect data on:

• Base salaries
• Bonuses 
• Benefits 

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This information helps HR teams work out if what’s on offer at their organisation is comparable to industry averages, helping ensure they make the most of their budgets while also attracting and retaining top talent. 

Salary surveys fall into two categories:

• Internal salary surveys: Collect data for jobs within an organisation, comparing employee compensation packages across departments. This helps identify and correct any inequities.
• External salary surveys: Collect data from a range of companies across a specific industry or region. These external surveys help HR teams gather insights on compensation trends, so they can use these to create the kinds of salary bands and benefits proving the most effective at attracting and retaining talent. 

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Key Benefits of Conducting a Salary Survey

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From helping organisations stay competitive, to ensuring pay equity and boosting employee retention — here are the key benefits of salary surveys. 

Staying Competitive in the Market 

It’s difficult to create attractive compensation packages when you don’t know what the competition is offering. By conducting external salary surveys, HR teams can identify any industry trends, which helps create salaries and benefits designed to attract top talent. 

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Ensuring Pay Equity 

Gender pay gaps and inequities are becoming a hot button topic for employees. If people discover they’re being paid less than a colleague in a similar role, it can create tension and lead to increased employee turnover. By using internal salary surveys to identify and address any pay gaps, organisations can show their commitment to equitable pay. 

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Enhancing Employee Retention

Compensation is a major driver of employee satisfaction and retention. External and internal salary surveys can help organisations ensure they’re offering fair compensation, which in turn can improve employee retention and performance. 

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Steps to Conduct an Effective Salary Survey

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Now you know the benefits of salary surveys — you probably want to start your own! Here’s what you need to know.

Step 1: Define the Scope and Objectives

Clear goals will guide the direction of your survey. Some examples include:

• Completing salary benchmarking against market rates 
• Identifying and addressing internal pay inequities 
• Creating competitive salaries to attract new talent
• Improving employee retention 

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Step 2: Choose Reliable Salary Survey Sources

Using reputable and accurate market salary data for your survey is crucial. Make sure you choose frequently updated sources, so your results are based on the latest information. Possible sources include: 

• Internal data 
• Industry reports
• Government databases
• Third-party salary survey providers
• Compensation management platforms like Figures

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Step 3: Select the Roles and Data Points to Survey

Now, decide which roles and data points to survey. You might choose to conduct a complete survey of all roles or focus on a selection with lower retention or engagement rates. Data points typically include base salary, bonuses, benefits, and total compensation.   

Surveying a wide range of data points helps HR teams make informed decisions — but this has to be balanced with the time and budget available. 

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Step 4: Gather and Analyze the Data

Now comes the fun part — data collection and analysis. Using a consistent format will help speed up your analysis, and at this point using analytics tools can significantly speed up the process. Make sure you cross-check data where possible, to ensure accuracy, and take into account variables like role responsibilities, experience, location, and the size of each organisation. 

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Step 5: Apply the Results to Your Compensation Strategy

The results of your salary survey can be used to inform your pay structure review and overall compensation strategy. You may need to adjust pay scales, address inequities, create salary bands, and develop new compensation packages to stay competitive. 

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Best Practices for Conducting a Salary Survey

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• Use the right tools: For the most effective and competitive salary analysis, you need the right tools. Rather than trying to do your own research (which can be time-consuming and inaccurate) it’s far better to use software or third-party platforms (like Figures!) that provide all the latest data, plus the most accurate analysis.  
• Communicate clearly: Leaders need to know how salary surveys will benefit the organisation, and employees want to know why their salaries are being surveyed, and how they might be impacted by any changes. A communication plan can help keep everyone informed throughout the process. 
• Ensure confidentiality: If you’re carrying out an internal survey, consider how you can ensure all employee data is kept secure and confidential. For external salary surveys and when using HR tech, make sure you check the security measures of any providers you’ll be working with.  

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Common Pitfalls and How to Avoid Them

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Salary surveys can be tricky to get right. Here are some of the most common pitfalls — and how to avoid them.

Relying on Inaccurate or outdated data

Data that’s even six months old can mean all your hard work was for nothing, because your updated salaries still aren’t competitive, or your benefits packages don’t reflect what potential employees are actually looking for. 

How to avoid it: Choose reliable data sources, preferably using real-time salary data. Figures uses up-to-date market data that empowers organisations like Decathlon, KPMG, and Welcome to the Jungle to make decisions based on the best data available.  

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Limited participation for internal surveys

If you’re looking to collect data on what your employees really think about their compensation and benefits, you need to explain what’s in it for them. If your organisation has created a culture of trust, employees will likely be happy to participate. But if not, they may be worried about whether their comments will be used against them. 

How to avoid it: Offering an anonymous survey can help build trust, as can explaining how the data will be used. Communicating the purpose of the survey can help encourage responses, as can incentives like gift cards. Keep surveys short, and make sure you share the results and any planned changes or actions. 

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Misinterpretation of survey results

Salary surveys can create a lot of data, but this is only valuable if it’s interpreted in the right way.  

How to avoid it: Remember your original scope and objectives during the analysis phase. If you’re using external data, ensure it’s from relevant markets, industries, or regions. It’s also worth using median and percentile data rather than averages, to get a clearer idea of typical salaries. 

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Ensuring Fair Pay with Salary Surveys

Regular salary surveys are one of the best ways for organisations to maintain fair and competitive compensation strategies. But knowing where to get recent market data — and how to analyse it — can feel like a challenge for HR professionals. 

That’s where Figures comes in. With access to real-time compensation data, plus an easy-to-use platform, you’re only one step away from your best salary survey yet. Schedule a free demo to see Figures in action.