Determining Pay: Salary Surveys vs. Salary.com
As a manager, you will likely come across a scenario where either a prospective or current employee will cite market data as their justification for a proposed wage increase. The information they are citing is what’s referred to as “crowdsourced data”. Most often, crowdsourced data comes from free public-facing platforms and forums such as salary.com.
When providing compensation recommendations, the Human Resources department uses data from multiple compensation surveys. These surveys collect and analyze data from multiple markets including other higher education institutions, as well as the broader marketplace or general industry. These compensation surveys are conducted and published on a regular basis by reputable, independent survey firms.
When comparing crowdsourced data and regulated salary surveys, there are three main differences.
- Salary Based on Title vs. Duties and Responsibilities
Websites that use crowdsourced data allow employees to enter their pay information into the site, which is then grouped with positions with similar titles. In comparison, the data that is supplied to salary surveys, are sent by Human Resources professionals with access to both salaries and job descriptions. These surveys compile their data according to a position’s duties, responsibilities, and requirements rather than position title. Because titles vary from company to company, you could ultimately see a wide variance when comparing positions based on title alone.
- Clearly Defined Requirements
There are many unknowns about the data found on crowdsourced data platforms. These unknowns include an individual’s interpretation of the pay they are sharing. Some participates share their base rate while others may include their total compensation as part of their salary, such as commissions, bonuses, stock, etc. Unfortunately, these public facing sites do not have mechanisms in place to validate the data that it receives and simply compiles what is inputted. Additionally, for many of these crowdsourced data websites, the end user can filter by location but there aren’t any other filtering capabilities. Because of this, the crowdsourced data will also include pay in industries that may not be relevant in a university setting or include employee types that are naturally paid at a higher rate, such as independent consultants. The salary surveys that Baylor participates in have clearly defined requirements to ensure consistent data is shared from company to company.
- Difference in Sample Size
Crowd-sourced data does not indicate the sample size (number of respondents) when publishing their data. Because of this, the data could be highly skewed by outliers, including those employees that are very low or highly compensated for various reasons, including long tenure, etc. However, the salary surveys that Baylor utilizes indicates the sample size, including number of employees in each position as well as number of different companies who reported data on each position. This gives the Human Resources team a better understanding on a competitive wage for any given position.
Ultimately, the compensation information that can be found on crowdsourced platforms can be very misleading. As a manager, it is important that you understand the differences, so you can effectively communicate that to your inquiring employee. If you need assistance in delivering that message or verifying compensation information, you can reach out to your assigned HR Consultant.
