Recently a few recruitment organisations have issued free “salary guides” for certain countries or industries. Magazines, whether business oriented or focused to the individual consumer, also run regular reports and guides with exciting titles like “Are you paid enough ?”. There are even websites where you can get free pay information (say, regarding a position that you’re interviewing for) provided you give the same information about your salary in your current role.
Often, hiring managers, employees or even other HR people will show me these numbers and ask me some variation of “how come our salaries are not the same as the ones mentioned in here ?”.
I have nothing against these guides and reports. Actually, in the odd case where you are setting up in a new country and can’t access professional data from legit survey providers or through informal conversations with peers, they can be a useful first source of information to get you started on your cost of employment simulations.
I do however have some reservations when it comes to these guides.
The ones sponsored by recruitment agencies tend to have high salaries because, well, ultimately, agencies are often paid a percentage of the salary they negotiate for the candidate they get hired for you – so the higher the pay, the higher the fee for them. And it makes the positions they advertise more attractive to candidates. So it is in their advantage to indicate salaries that tend to be, not false, but on the high side.
The websites providing salary information based on visitors’ feedback have little to no quality control. The data is based on goodwill and the assumption that people will provide exact information on their current pay. The idea is, 1 – that people know exactly their current package (which in my experience is often not true) and 2 – that they will tell the truth and not inflate their stated compensation in a bid to appear more “important” or “senior” than what they really are. And, well, people are people… so without these built-in control mechanisms, the data they provide can’t be trusted fully.
I described in an earlier post what kind of safeguards and quality control processes are put in place by compensation survey providers. They are based on anti-trust and privacy laws, but also on statistical as well as methodology controls – and the size of the data sample also matters.
One of these important points is the job matching approach. There are job descriptions as well as reference points (based on the provider methodology) to make sure that the data provided for each job is similar. This way, the companies participating in the survey are sure that the results are comparable : salary information is relevant.
Most of the surveys provided by recruitment agencies or self-submitted information, are not as rigorous in their approach to job descriptions and job matching. Often the matching is based on job titles only, and this is where a lot of the discrepancies can come from. A Director in a company may be the equivalent of a Vice-President in another, some organisations may call Manager someone who holds an individual contributor role, an Assistant in an organisation may be a deputy department head while it is may be a secretary in another organisation….
Similarly the size of the population being used for producing the results indicated in these guides, is never really explained. Is an average based on 3 employees data points really relevant ? What if the recruiting company takes into account the salaries they have gotten for candidates in only 2 organisations ? Do they really represent “the market” ?
Salary guides issued by recruiting companies, magazines and websites can be useful at times, when you have no other data point and are looking for a rough idea of what market trends are. However, you need to use them carefully as the job matching method as well as the statistical controls are not always as thorough as the ones used in compensation surveys designed and developed by specialist providers. Ultimately, relevant data comes at a price, and can’t always be found for free.
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[…] Should you rely on free compensation data from magazines ? Copyright protected by Digiprove © 2012 Sandrine BardotSome Rights ReservedOriginal content here is published under these license terms: X License Type:Non-commercial, AttributionLicense Summary:You may copy this content, create derivative work from it, and re-publish it for non-commercial purposes, provided you include an overt attribution to the author(s).License URL:http://creativecommons.org/licenses/by-nc/3.0/ Filed Under: Compensation Tagged With: compensation, Compensation Benchmarking, Compensation Intelligence, Compensation Surveys, External Competitiveness […]