This is the time of year when a lot of salary surveys are conducted. However, the number of companies that conduct rigorous reliable surveys of employer wage and salary practices seem to have shrunk to little over a dozen. And not all of the few survivors have a broad enough data collection process to satisfy all buyers.
Abbott-Langer
Compdata
Comptryx
Croner Company
Culpepper
ERI Economic Research Institute
Foote Partners
Gartner
Hay
Hewitt Aon
IPAS
Mercer ORC
Millman
NACE
Radford
Towers Watson
A short list is bad for our tradecraft. The current limited number of independent sources still in business supplying vital comprehensive and reliable factual data for well-informed management decision making has troubling implications.
Do we want to be left at the mercy of government pay surveys (slow, delayed, laborious, limited, non-specific, etc.)? BLS does great work, but their OES/NCS surveys have a narrow focus that doesn’t serve wider employer needs. Federal wage surveys tend to be simple head-counts by income bracket for broad occupational categories rather than collections of actual rates paid to specific job titles by employers sortable by industry and size. There are other shortcomings, too: see Why is government salary data considered to be conservative? at the top of those SalaryExpert.com FAQs. Since America is the home of the most robust pay and salary survey firms in the world, I'll keep this American and won’t even comment about the limitations of Statistics Canada data or British National Statistics Office information.
Dare we rely on indefensible sources? Internet sweepings, especially those collected from self-nominated input via possible incumbents, anonymous postings and unverified sources, have proven to be extremely inaccurate. Enterprising web marketing firms offer hearsay guesses undistinguishable from cocktail party gossip or messages etched on restroom walls. Boards of directors cannot be confident placing their trust in unverified assertions based on (at best) anonymously sourced supposed employee-volunteered input. Such sources also fail the DOJ/FTC safe harbor tests, and that makes them problematic (if not downright toxic) to top management committees and their legal advisors.
It is my intent to share a list of major salary survey candidates deserving employer input participation and purchasing support. Have I missed any good pay survey company in the United States? A few of the smaller ones almost escaped my notice because they literally did not come up on any of my random internet searches to identify firms that survey employers to collect their input on salaries actually paid.
There doesn’t seem to be any other one left standing like my employer, ERI Economic Research Institute, who does no consulting, no insurance and no actuarial services and who only publishes surveys. Or am I wrong? If I'm right, you understand why I find this shrinkage of my employer's field of competitors (while good for our business) very bad for our profession and scary in its implications. We always recommend at least three reliable survey sources be referenced for any really important pay decision, so we only want to be one of the three. But you need two others to have the tradecraft-standard three. There's plenty of room for competition!
Anyway, I’d appreciate any suggestions of firms that conduct employer salary surveys that should be added to my list.
Please, all you employers out there… participate in the wage and salary surveys conducted by these enterprises! Sponsor their pay data collection efforts, because they operate to your benefit. Give them good data (GIGO)! Buy their surveys! Keep them in business because they keep you in business.
By patronizing surveyors, you encourage healthy robust competition for quality, breadth, speed and price. If you ignore pay survey requests or abandon salary survey purchases for too long, you could end up cutting your own throat, creating a sparsely-populated supplier environment. Consultants are always happy to create a unique customized survey, but it requires a large market demand to support detailed comprehensive surveys of all employers or even to justify repeating the same limited observation sample pay survey each year. The shrinking pool of professional salary surveyors capable of producing high-quality statistically reliable results year after year is troubling. Employers may end up finding critical shortages soon. Insufficient demand may further reduce the number of independent pay surveyors, leaving compensation professionals with inadequate reliable research sources to support their recommended plans.
Support your favorite surveys, for the benefit of everyone.
E. James (Jim) Brennan is Senior Associate of ERI Economic Research Institute, the premier publisher of interactive pay and living-cost surveys. Semi-retired after over 40 years in HR corporate and consulting roles throughout the U.S. and Canada, he’s pretty much been there done that (articles, books, speeches, seminars, radio/TV, advisory posts, in-trial expert witness stuff, etc.) and will express his opinion on almost anything.
Image courtesy of studentsoftheworld.info
Jim:
Thank you for posting this commentary! I think the shrinkage of the HR functions and outsourcing some of them makes it tough to participate. For example, I was working with an organization that outsourced its compensation administration function. We discovered through the process of outsourcing that in addition to paying for survey results we had to pay the outsourcing firm to complete these surveys. The fees to complete the surveys were several times more than the price we paid to purchase the results! This might be one of the reasons why not many companies are participating and as a result it is becoming more difficult for survey companies to make money in this business.
Posted by: Saado Y. Abboud | 04/12/2011 at 11:55 AM
Ouch! That's a double-whammy. First, you lose the internal comp function. Then you also pay the outside service a lot more than what the internal employee got, in addition to paying the survey provider for access to the results. You gave us all important proofs that retaining compensation professionals costs less than the outsourced alternatives. Thanks very much, Saado, because your lesson is a valuable one.
Posted by: E. James (Jim) Brennan | 04/12/2011 at 12:09 PM
"Enterprising web marketing firms offer hearsay guesses undistinguishable from cocktail party gossip or messages etched on restroom walls."
OMG, I'm totally in love with this statement. It's been a long day and it really gave me a chuckle, thank you!
You’re absolutely right. The consolidation and reduction of survey providers has me concerned too. There are survey sources I admire and use daily, and others that I don’t use too often, but turn to in a moment of need. And there are others still that I can’t bring myself to use or recommend because they’re lacking in transparency. (How can I tell my executives that so-and-so is the right resource for our market when I can’t even confirm the list of participants???)
Thank you for writing this article! Quality data is a critical component for success in this line of work.
Posted by: Windsor Lewis | 04/12/2011 at 08:58 PM
Too bad. Looks like we are in for the same type of consolidation that is happening to the benefit consulting firms. In these cases I say ---- the fewer the not merrier! More is better!
Posted by: Jacque Vilet | 04/12/2011 at 11:22 PM
Gartner has a decent IT survey.
Posted by: Kelly | 04/13/2011 at 07:41 PM
Yes, Kelly, and that is why they were placed on the list. Someone else suggested the CUPA-HR surveys, but they seem to be very tightly focused on only junior colleges and universities, and that's a very narrow subsector of education.
Posted by: E. James (Jim) Brennan | 04/13/2011 at 08:23 PM
Oops, I almost forgot, Kelly. Gartner says it is no longer doing the IT survey itself and has turned it over to Mercer. Apparently the 2011 IT survey will be co-branded by Mercer and Gartner; not sure about thereafter. Suspect they no longer belong on my list of independent employer salary surveyors; but they are still doing consulting, of course.
Posted by: E. James (Jim) Brennan | 04/13/2011 at 09:28 PM
Compensation Resources has a few salary surveys at the moment and plan on adding new ones. They currently have a private company, nfp, and Christian Organization survey along with severance, board, college grad and merit increase.
Posted by: Andy Sellers | 04/21/2011 at 12:28 PM