Salary Planning Surveys…and a Grain of Salt

Posted on August 23, 2011 by Chris Kelley Posted in Compensation Planning, KnowledgePay, Market Pricing, Salary Surveys

It’s that time of year when salary planning surveys get published and compensation professionals all over the world look for guidance about how much to age their market data and build their compensation budgets for the upcoming year.  There are several sources of salary planning survey data that get used year in and year out.

The most prolific is the WorldatWork…which has been used be virtually every company where I’ve worked or consulted.  But there are also many other sources that compensation professionals turn to, such as AonHewitt, Mercer, HayGroup, Towers Watson, etc.  Which ones are going to be right for any one company is really going to depend on their labor market and which salary survey vendor has the best representation within that labor market.

The cautionary note that I like to remind people of is that you have to keep in mind when that compensation planning data was gathered.  In most cases, the data is gathered in the April-May time period.  Granted, I can appreciate that it takes time to compile the market data and perform their analytics, but geez…ask a compensation person in April what they plan to do for increases a year out into the future and what do you think the response of many is going to be?  Seriously, many people are still wrestling with administering the current year’s merit increase and they may not have even seen their company’s Q1 results.  How can they possibly know with any degree of confidence what the budgeted increases will be for the upcoming year?

The lack of information that is available at the time that the compensation planning surveys are conducted leads me to believe that there are a number of participants that respond by saying, “we’ll basically do the same next year as we’re doing right now”.  Maybe a tick up or tick down, but virtually it will be the same.

Looking at the compensation planning survey data from that perspective, don’t act surprised then when the results come out and the trending is basically flat.  It takes a really traumatic event like the 9/11 terrorist attacks or the 2008 recession to disrupt the pattern.  Absent those kinds of tragedies, the survey results are more than likely to just continue the status quo.


In other words, take the compensation planning survey results with a grain of salt.