In our ongoing blog series on workplace equity, we’ve explored the importance of fair and just compensation practices. We’ve discussed equity, which means paying employees fairly based on their skills and contributions. We’ve introduced a five-step framework for achieving equity. This framework highlights the significance of establishing equivalent worth in developing a grading structure.
However, achieving workplace equity goes beyond internal alignment. It’s about ensuring that your organization’s compensation is competitive within the labor market. This is where salary surveys become valuable.
Building the foundation with a consistent approach
To make sure you’re paying your employees fairly, we recommend using a consistent approach to evaluating jobs. It is best to implement a job evaluation methodology that aligns with the job matching applied in the salary survey.
Many organizations use a job evaluation approach that differs from what was applied in the surveys they use. But doing so makes it difficult to ensure the accuracy of the survey results, which could impact how pay is managed.
The role of salary surveys in workplace equity
Salary surveys offer a window into the labor market, providing insights into current compensation trends and benchmarks. Using salary survey data, organizations can ensure fair pay that is aligned with the market.
These surveys are comprehensive reports that collect and analyze data on compensation practices across a range of jobs, sectors, and geographical locations. The data includes details about base salaries, bonuses, cash and in-kind benefits, and non-salary and after- service benefits.
By providing an objective, real-time snapshot of prevailing market rates, salary surveys enable organizations to
- Evaluate internal pay structures against the labor market and identify potential pay gaps.
- Understand the market forces influencing compensation, enabling informed decisions about pay practices.
- Offer competitive compensation packages that attract and retain talent, as well as align with their Employment Value Proposition (EVP).
Ultimately, salary surveys help inform organizations in developing their compensation strategies that foster equity and support their overall objectives.
Aligning salary surveys with internal grading structures
In previous blog posts, we discussed how grading structures—categorizing jobs based on value and complexity— establish consistent pay practices within your organization. Each job grade within this structure is associated with a specific salary range.
Salary survey data is critical in informing the design and ongoing update of these structures. By referring to labor market data, your organization ensures that its compensation remains aligned with prevailing trends, essential for promoting equity.
Utilizing salary surveys to inform pay ranges
Once you have aligned your job grades with the market, use survey data to inform your organization’s compensation strategies for establishing appropriate pay ranges for each grade. These pay ranges typically include a minimum, midpoint, and maximum.
When setting pay ranges, consider:
- Target market position. What is your organization’s desired percentile ranking compared to the market?
- Target market composition. With which specific sectors and organizations does your organization compete for talent?
Because the labor market evolves, your organization needs to regularly review and update these pay ranges based on the latest market data. This ensures your compensation packages remain competitive and attractive.
Best practices for utilizing salary surveys
Selecting and using the right salary surveys is the key. Here are a few best practices to keep in mind:
- Choose reputable and relevant surveys. To get good data, make sure the surveys use a good sample of employers in your target market and are done by credible organizations. Consider the survey methodology, job matching and data collection process, and the quality of comparators. Ensure the survey fully captures employer practices on salaries and benefits. This is especially important in developing markets where benefits can be a significant part of totalcompensation.
- Analyze and interpret survey data carefully. Don’t just rely on the raw figures. Understand the data within the context of your organization’s specific needs and goals.
- Use multiple surveys. To gain a broader perspective and validate your findings, relying on multiple salary surveys from different providers is often helpful.
Tapping Birches Group for labor market data
As we’ve seen, salary surveys are an indispensable tool for promoting equity in compensation. By making the most of salary survey data, organizations can determine if their pay practices are fair and aligned with the labor market.
At Birches Group, we offer comprehensive compensation consulting and salary survey data to help organizations achieve pay equity. Our team of experts can guide you through survey participation, data analysis, and the development of a compensation strategy that fosters equity and supports your organization’s goals. Contact us today to learn more.
Coming next
In the next installment of our Equity in Action series, we’ll walk through developing and implementing pay ranges. We’ll show you how to define and manage these ranges within your internal grading structure to help your organization achieve pay equity.
In the meantime, if you have any questions about workplace equity, please don’t hesitate to reach out to Birches Group. We’re here to support your journey toward a more equitable workplace.
Carla is a part-time copywriter on our marketing team in Manila. Before shifting to freelance writing in 2020, she worked as a marketing and communications specialist at the offices of EY and Grant Thornton. She has written about HR and career development for Kalibrr.
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