What is a salary survey?
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What is a salary survey?
As a company, knowing how to structure your salaries can feel like a challenge. You want to offer competitive pay, but also need to work within your budget. Many companies use salary surveys as a way to discover what compensation their competitors are offering.
We want to help you find out more about salary surveys plus why and when you might need to use one.
What is a salary survey?
A salary survey or pay survey is used to collect and analyse data on compensation. They can give insight into the minimum, maximum, and average salary paid for specific roles. They can also show how wages differ across location, gender, industry, job title, and more.
Pay surveys may include details about wages, or they can include total compensation in terms of other benefits like healthcare, paid time off, flexible working, pension plans, and bonuses too.
Salary surveys are usually carried out by:
- Professional associations
- Government departments
- Private employers
Companies often have to pay to access surveys from professional associations, and while those from government departments are often free, they may not be updated regularly. The results of these surveys can also go out of date quickly, especially in the current economic climate where many companies are adjusting salaries more often than they may have in the past.
That’s why to set the most accurate salaries, it’s best to use data sources that are both regularly updated and industry-specific. Location is important too as if you’re based in France, the data from a salary survey in the UK won’t be as relevant or useful. As a result, the best option for private companies is to use benchmarking data that’s updated in real-time.
Why do you need a salary survey?
The data from salary surveys can bring plenty of benefits. Here are five reasons why you need a salary report.
#1 To make accurate decisions
Knowing where to set your employees’ salaries is a lot easier when your decisions are informed by accurate and up-to-date data. Once you know the market rate you can adjust your salaries so they’re as competitive as possible.
#2 To drive transparency
Pay transparency helps promote trust, but even if you don’t openly share salary information, employees are more likely to discuss their salaries than ever before. For employees in the UK who did discuss their salaries, 35% found they were being paid less than their colleagues. This may tempt some employees to leave their job in search of better transparency and higher pay.
#3 To close the gender pay gap
The gender pay gap means that often, women get paid less than men for completing the same job. For European startups, we discovered that the unadjusted gender pay gap is 19%. Women are also less likely to hold leadership positions. By using accurate and up-to-date data from surveys, you can set fair salaries that help drive gender pay equality.
#4 To stay competitive
Competitive salaries help to attract the top talent—but during an economic downturn budgets also need to be allocated with care. Knowing the salary ranges for roles in your specific industry and location can help you find the right balance.
#5 To boost performance
When employees feel they’re being paid fairly, they’re often more productive. It can also help increase loyalty, which is vital in a job market where retaining top talent is just as important as attracting people to work for you in the first place. When employees discover they’re being paid less than their co-workers, or people in similar roles elsewhere, they can feel less motivated to perform their best.
When do you need a salary survey?
If you’re launching a new startup, being able to offer a competitive salary helps attract the top talent. Once your company is up and running, the data from salary surveys is vital when completing performance reviews, calculating salary adjustments in line with inflation, or deciding how to combine wages and other benefits within total compensation packages.
What questions do salary surveys typically include?
If you’re running your own salary survey, choosing the right questions is key. Some examples include:
- Current job title
- Job type (managerial, technical, operational, etc)
- Seniority level
- Sector (private or public)
- Type of contract
- Years of experience
- Professional memberships or certifications
- Gross annual income
- List of benefits
Completing a private salary survey is a lot of work, not least because you’ll need to source as many respondents as possible, before analysing the data. Any compensation data should also be for appropriate roles at similar companies, rather than general job titles from other industries. If you’re a startup, you’ll want to source data from companies within the same geographical location that are at a similar stage of growth.
For accurate results, the methodology used to analyse your results is important. Ideally, you’ll need to set a minimum number of responses, and for accuracy, this should ideally be at least 500 respondents. Results should first be sorted by job title so you can calculate the average, mean, and median for each of these.
The value of your results will be increased if you can also calculate results for other demographics including sector, industry, location, size of the company, and more. Once all the work collecting and analysing data is done, in a few months, your results will be out of date as respondents receive pay increases as part of their regular review cycle.
At Figures, our benchmarking tool uses data that’s backed up by the salaries of more than 70,000 jobs all across Europe. We make it easier than ever before for you to use the results of an industry-specific salary survey to inform your compensation policy, the right way.
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