Market Pay Analysis and Custom Compensation Surveys

Custom Compensation Surveys

Market pay analysis often encourages an organization to conduct a review of compensation policies. Organization objectives, strategies, and market forces each play an important role in shaping the corporate pay posture. Custom surveys help provide an organization with timely and accurate market compensation data. For this reason, survey information is invaluable in analyzing an organization’s compensation competitiveness. Custom surveys typically require that a survey sponsor(s) retain a third-party to gather information in such a way that ensures protection of participants’ confidentiality.

Though a custom compensation survey may be as simple as a telephone survey, it may also involve a complex study. There are more sophisticated (and costly) ways of conducting a custom survey (i.e.: personal interviews) which require more time and resources. We would be happy to discuss options with you if you would like to invest in a more sophisticated process than that described on the following pages.

The following are sundry items which may be of interest to an organization considering sponsoring a custom survey:

• If an organization would like to share the cost of the custom survey, other companies may be invited to share sponsorship and customization. This matter varies from company to company and requires further discussion should your organization consider this approach.
• To solicit custom compensation survey participation, EMEND will; a) offer the participating organizations a copy of the survey findings (while protecting each organization’s confidentiality and without identifying the information supplied by each participant) and b) inform the participants that the survey information is complimentary given that the survey is being sponsored by another organization in the industry.
• Though some organizations may decline participation if there are insufficient participants or may make their participation conditional, EMEND will work with potential survey participants to ensure that their involvement is as effortless as possible.
• Some organizations may ask us to include others that are not included on the original invitation list. In order to gain participation we recommend expanding the list (within reason).
• We recommend that a minimum of 5 organizations participate to draw some meaningful conclusions.

Custom Survey Project Process

Part One:

1. Establish timing for the survey.
2. Determine the comparator group and select companies to invite.
3. Determine appropriate contact names for each prospective participating organization (i.e. appropriate HR or compensation person).
4. Choose jobs to include in the survey.
5. Select compensation components to survey.
6. Gain participation; call / write/ e-mail / follow-up with each prospective participating organization to invite them to participate in the survey; and reconfirm a) confidentiality of information and b) what each participating organization will receive for participating in the survey. At this step, we will determine whether we have sufficient interest in the survey and whether we should proceed to Part 2.

Part Two:

1. Consider data needs and data collection requirements
2. Develop a questionnaire to collect data/info and distribute to survey participants. Please note participant suggestions are always welcome so that survey participants feel engaged and willing to participate.
3. Collect compensation information from participating organizations and from the sponsoring organization (by mail, email, phone, or in-person, if required). Phone is an option for participants who don’t want to complete the questionnaire electronically.Verify responses and review the data submitted for reasonableness.
4. Analyze compensation information / trends; the type of statistical analysis depends on the number of organizations participating.
5. Analyze and present data; generate a participant report in a brief document summarizing the survey findings for all survey participants -AND- distribute to all survey participants.
6. Extract the survey sponsor’s compensation information and provide a separate report that compares their compensation position vs. survey participants.
7. Meet with the survey sponsor to discuss findings.

Using Published Compensation Survey Sources

Market pay analysis is best conducted using more than one database. Using published compensation survey sources is the most prevalent methodology for market benchmarking. EMEND works with clients to determine the best survey sources for the client. Survey houses produce published compensation surveys and compensation databases with a large number of organizations participating from different industries and geographical areas. EMEND recommends one or more survey sources depending on the client expectations. The following are typical process steps:

1. Determine jobs under review, project expectations, and timing.
2. Collect compensation information about published survey source options and discuss possible job matches with them.
3. Analyze compensation information / trends; statistical information while considering the number of published surveys and comparable job matches.
4. Prepare a brief document summarizing the published survey findings and compare their position vs. the market (based on published survey sources).
5. Meet with management to discuss research findings.

Using a Combination of Custom Survey and Published Survey Sources

This methodology is by far the best way to conduct market pay analysis for an industry sector where; a) gathering market data is difficult and b) the organization’s talent pool can easily move from one industry to another. As follows, this allows an opportunity to:

• Compare compensation data with a very select group of comparable organizations using a custom survey; and
• Use published sources to examine pay practices in specific industries, regions, type of organizations (i.e.: not-for-profit and/or for-profit organizations). Moreover, using published sources will provide greater insight with respect to total cash compensation being offered in the marketplace, as well as some validation of the custom survey information.
• Ensure market competitiveness: If the published sources prove to be a good comparison – the survey sponsor could conduct annual market analysis using published sources and only occasionally sponsor a custom survey.