With the economy on the upswing, employers are reviewing the employees they have retained and are considering lifting company-wide wage freezes or offering pay increases to those fortunate enough to have survived the storm. Before managers and business owners start handing dollars away, many will look to their competition and other businesses to see what the market is doing. Are other businesses giving wage increases? Where do we rank in the marketplace? Surveying the market and salary conditions can be a complicated task, so here are a few things to consider.
What is a wage survey?
Wage surveys are collections of salary and market data used to help determine an employee’s compensation. Surveys can include average salaries, inflation indicators, cost of living indicators, salary budget averages, and benefit packages. Results are usually listed in a three or more part format with the median (midpoint) salary range, listed amongst the 25th and 75th percentile for salary ranges. More detailed surveys will include additional percentiles and separate total compensation from base and bonuses, as demonstrated below:
Salaried
| Average | 10th | 25th | 50th | 75th | 90th | |
| Total Cash Compensation | $35,951 | $25,695 | $30,304 | $35,783 | $41,934 | $48,337 |
| Base Salary | $35,266 | $25,201 | $29,787 | $35,130 | $41,015 | $47,025 |
| Bonus | $896 | $181.10 | $383.50 | $803 | $1,594 | $2,882 |
What details should be included in a wage survey?
Including comprehensive parameters in salary surveys is vital to producing accurate results. If a business owner is looking for salary data on an Operations Manager of a 35 person business in Bend, Oregon using salary data reported for a CEO of a 2,000 person company in Los Angeles, California they will not produce meaningful results. The following five essential parameters must be considered when gathering salary data for positions within an organization:
- Job Title/Job Duties
Narrowing the search by the job title is extremely helpful. This allows a company to look at various wages and benefit offerings based on the particular job. With that in mind, employers should pay close attention to job duties described under this title. Often times Company A calls one job something completely different than Company B, even though they have the same job duties. Looking at the job details and essential duties becomes critical in producing accurate results. - Job Requirements
Asking questions such as what degree is required for a position, how many years experience are required, and what other qualifications do people in this role most often have narrow the search results even more. - Location
Cost of living and desirability of location affect salary ranges for positions. Examining a company’s location creates even more precise matches. - Industry/Type of company
Companies must keep in mind the type of business they are in and the type of organization they are. Industries that have been hit hardest by the economic downturn may not be in the same salary ranges as those industries that have managed to stay ahead. Certain industries have historically paid more than others for the same or similar positions. Not-for-profit organizations are not in the same salary ranges as large for-profit organizations. - Size of organization
The size of the organization significantly influences results as well. Smaller organizations don’t have the bandwidth to pay as much as some larger companies do. If you are running a small, family business with only four employees and you are comparing your salary ranges to a larger, more corporately run business you might find that your employees are being paid much less than their counterparts.
Typical cost of a wage survey
Understanding how to set the survey up is vital, but how much does running a survey cost an organization? Many organizations and online companies offer “free” or “almost free” wage surveys. Employers should beware of services like these as the data can be inaccurate. Often times, these sites do not offer the survey seeker the opportunity to enter in details such as job requirements, location, industry, and size of company. A typical survey can run anywhere from $9.95 for a Personal Salary Report to $1,000.00 for a comprehensive Salary and Benefits Survey. In most cases, you pay for what you get. Requesting sample surveys is a good idea before agreeing to pay for the survey, as many organizations offer results in various formats. Keeping the purpose of the survey, the amount of detail they are able to allow you to enter, and the format of the results in mind will help you to determine which survey to purchase. Contact Xenium for information on conducting wage surveys for your company’s employees.