What HR Professionals Need to Know About the Importance of Compensation Survey Participation

In today’s workplace, everyone has an expectation to receive and access information immediately. 

Advances in technology have conditioned us to having information at our fingertips. Nowhere in organizations is this expectation more prevalent than the demands placed on Human Resources professionals to obtain data.  Whether it is background information on potential candidates or market compensation data.

Having access to market compensation data is an important function of the human resources department in most organizations.  Market compensation data are used by organization leaders to inform their employee pay decisions, making and setting their pay objectives, and compensation strategies.  As a result, HR professionals are expected to have the latest pay information readily available to assist organizations in their pay decision making process.

Compensation information about various positions is readily available on the internet and surprisingly, it is becoming a source of information for many HR professionals.  The caution with this data is the reliability, data collection and tabulation sources. In other words, this compensation data may not be trusted to assist your organization in its employee pay decision making.

Today’s other common practice is for HR professionals to contact their counterparts in other organizations and exchange pay information.  This practice is potentially illegal under Department of Justice anti-trust regulations. Simply stated, it is illegal for two organizations in the same industry or geographic location to directly exchange pay information with each other since it is considered wage-fixing under anti-trust laws.

To avoid such situations, many organizations rely upon third-party survey vendors to obtain competitive pay information.  The third-party survey vendors collect, analyze and tabulate the data to protect individual data submitted by each organization.  In recent years, there has been a steady decline in survey participation among organizations across all market sections in spite of increased demand for market pay data.  In addition, there are many new positions which have been recently created for which there is not a wealth of pay information available. Some examples of these positions include Data Scientist, Community Impact Director, and Market Intelligence Leader.

The decline is unfortunate given the advances in survey platforms and technologies.  Third party vendors have created survey platforms to aid HR professionals in the submission of their organization’s employee compensation data.  In spite of these advances in survey automation, there continues to be a decline in participation in third party surveys, while organization demands for reliable employee compensation data has increased, particularly in urban areas where there are tight labor markets.

We attribute this phenomenon to two things. First, HR professionals prefer to purchase compensation surveys given the demand on their time rather than taking the time to participate in them.  Unfortunately, this mindset is to let other HR professionals supply the compensation information and we will purchase the survey report. We recognize there are lots of conflicting priorities placed on HR professionals, especially those in small and/or under-staffed departments.  But, if this trend continues, it will further deteriorate the quality of compensation survey data and reliability.

Secondly, there has been a proliferation in surveys because of the technological advances especially in compensation surveys.  Many HR professionals are inundated with survey requests and don’t have staffing resources to accommodate all the requests. This increase in survey requests should not result in declining survey participation. Instead, organizations should take a strategic approach to their survey participation.  Specifically, they should research and determine the surveys which meet the majority of their compensation data needs and participate in those surveys. “Best practice” is for organizations to participate in at least two or three surveys per year to help ensure the reliability of compensation data upon which most organizations use in their annual employee pay decision making.

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