Ten minute tutorial: salary surveys

Simon Kent fills in the basics
about salary surveys.

What are they?

A salary survey gives a
snapshot picture of what employees earn at the time the of the research. In
today’s world of flexible benefits a survey should not record salary alone, but
total remuneration. For this, a cash value is given to benefits such as company
cars, leave and share options and added to the salary itself.

How are they created?

Researchers contact employers
and ask a series of questions about their employees. These questions identify
the specific job roles within an organisation according to the responsibilities
and status of each employee. Alongside this, the researcher gathers full
details of the benefits or reward package each employee receives. In this way a
report can be constructed that compares reward packages among  employees in similar roles.

Craig Sankey, marketing manager
of The Reward Group, which has produced this kind of data for the past 30
years, notes the job title ‘Personnel Officer’ can appear several times in a
single survey, because each time it will denote an employee of different
status.

While dedicated survey
companies do exist, it is more usual to find this information collected by
large HR and management consultancy firms who have specialist departments
working on this information. They may use the data to inform their other
services or even offer ‘added value’ to their data through specific reports and
briefings.

Salary surveys can cover jobs
over international boundaries. Such surveys tend to require the resources of
large multinational consultancies.

How are they used?

By using the data collected,
employers can ensure the reward package they offer employees is competitive.
Recruitment and retention strategies can be informed by this data and pitfalls
– such as investing in a recruitment campaign while offering an inappropriate
salary – can be avoided.

Salary surveys can cover all
sectors and levels of employees and such information can be pushed to line
managers if the recruitment function has been devolved from central HR.

At times of mergers,
acquisitions or opening new operations, salary survey data can be used as part
of creating a firm business case. This data will show how much an organisation
will have to pay for its new staff.

Buying off-the-shelf or
participating

Salary surveys can either be
purchased off-the-shelf as reports, or organisations can take a greater
interest in the survey by offering its own data.

Jo Coleman, a consultant with
actuaries Towers Perrin notes that all its salary surveys are ‘participant
only’: “This normally ensures that survey results are more accurate,” she says.

Elsewhere, participation may
not be mandatory, but organisations that do contribute can get the final report
at a discounted price. Laurie Sinden, a consultant at Mercer HR, says the price
of Mercer’s surveys are halved for those who participate.

Some surveys are carried out in
association with professional and industry organisations – for example, the
Institute of Managers’ annual manager’s salary survey is conducted by Computer
Economics (see below). This kind of arrangements enables the researcher to
benefit by accessing precisely the people required for the survey while the
organisations gain a privileged view of member’s activities.

How to get quality data

Philip Hough, data services
manager UK at the consultancy Watson Wyatt notes that the value of a survey to
the end user depends on the quality of data collected. Crucial to this is
ensuring that jobs are matched accurately across participating organisations.
To do this, Watson Wyatt carries out in-depth face-to-face interviews with HR
staff and sometimes with line managers, to ensure they correctly group
employees.

Having done this, it is then
essential the user ensures their own job roles match when making comparisons:
“If you’ve got an operation in London and the comparator group consists of
companies in Scotland, the data is not going to be useful to you,” Hough notes.

While ensuring the information
viewed is truly comparable the quantity of data is also important. It could be
unwise to base your next salary review on the results from only half a dozen
companies.

Processing the data

There are some common formats
used for the presentation of data. The Reward Group, for example, is not alone
in publishing data in four principle ways, split by region, level of
employment, function and by industry.

However, once the data has been
collected, it can be presented and interrogated however the user requires.
Advances in technology and internet use means that users are increasingly being
given electronic tools with which to do their own analysis.

Surveys are still published on
paper although the Internet is becoming an increasingly popular option. Watson
Wyatt use of CD ROM packages since this ensures the user can swiftly process
data without being dependant on a fast server connection.

It is certain that technology
will continue to evolve in the collection and processing of Salary Surveys, but
says Hough, technology should not be given the major priority by users: “If you
don’t have valid data or comparable matches to your own organisation then it
doesn’t matter how you manipulate the data – it will still be useless.”

The cost

Single surveys can cost between
£200 and £1,000 – the higher the level of job, the more expensive the survey.
Price depends on the survey required, customisation, level of detail and so on.
Some providers now offer subscription rates for access to data websites. Cost
varies according to participation and the type of data accessed, but expect to
pay £600-£1,300 euros for access to an annual cross-industry survey.

Major players and resources:

Mercer Human Resource
Consulting: www.imercer.com
The Reward Group: www.reward-group.co.uk
or www.salarysearch.co.uk
Watson Wyatt Data Services: www.ecssurveys.com

Towers Perrin: www.towers.com/towers/locations/uk/publications.htm
Also access to the Towers Perrin Worldwide Total Remuneration Report 2001-2002
by clicking on ‘research reports.’
TMP Worldwide Sales and Marketing Survey – http://uk.eresourcing.tmp.com/smsalarysurvey.asp
Functional data analysed by industry.
Computer Economics Limited and Remuneration Economics: www.celre.co.uk Specialists in IT data but
have expanded to include other industries. Also run the National Management
Salary Survey for the Institute of Managers
www.incomesdata.co.uk Incomes Data
Services provides European, International and Management data. Also the IDS Pay
Benchmark which provides data on all shopfloor and office jobs.
www.cubiksurvey.com  an online resource run by a PA Group company
CBI: Publishes Pay Databank results six times a year and is free to participants.
Access the scheme via www.cbi.org.uk  and clicking Business Surveys under the
Business Services header on screen left.

A number of websites offer free
data on salaries in specific sectors – try www.totaljobs.com/salary_checker/salary_checker.asp

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