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How to source the right pay data for your organization

There is methodology in the madness

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Beyond Data

By Job van de Sande and Eoin Douglas | January 7, 2021

The landscape for compensation and market data varies dramatically in quality, price, value and consistency. How do you determine what data sources are right for you and your organization?

Compensation and benefits play a significant role in an organization's ability to attract and retain top talent. Making informed and intelligent decisions based on data is one of the best ways to guarantee your competitiveness from a rewards perspective. But understanding what data is available and evaluating which sources are right for your organization can be daunting tasks.

Here are some practical considerations for selecting the right data for your organization.

Types of compensation data sources

Data sources generally fall into two categories:

Informal

Informal data is mostly free and might be gathered from Google searches, conversations with peers, social media posts, recruitment agencies or other anecdotal sources. While this can be a great starting point and attractive from a cost perspective, the reliability of the data is perhaps weighted against the effort it took to get. Your ability to confidently rely uncertain.

Formal

Formal data comes from submitting your data to a compensation survey. All done anonymously. Often the data is submitted against a methodology which helps make the results understandable when compared. While formal survey participation carries a cost and time commitment, they deliver on quality and value, especially compared to informal sources.

Quality data in, decision-ready results out

Understanding the strengths of each survey provider will help you feel confident in your choice

Willis Towers Watson Data Services has a long history of administering high-quality compensation surveys, but there are many 3rd-party vendors in the market. As a (new) participant in a formal compensation survey, understanding the strengths of each survey provider will help you feel confident in your choice.

As you assess data providers, you should look for:

  • Streamlined and careful collection processes that promote high quality and consistent data
  • Well-defined global methodology that allows you to accurately compare your roles with comparable roles in peer organizations, as well as
  • Multiple people to support you in your data interpretation and to answer your questions.

Match your talent pool to the right data source

The COVID-19 pandemic brought another dimension to geography as employees can work anywhere

After deciding on whether or not to use formal or informal data and the data provider(s) you’ll use, the next step would be to think through the talent needs of your organization. Where you can improve on pay to retain talent? From where do you attract talent? For example, when recruiting digital talent for your organization, you are not just competing for talent within your own industry.

You are now competing for this highly specialized talent on a much broader scale. As a result, organizations may consider applying different compensation criteria for specific talent segments.

Answering these questions and more will help you decide on which surveys are right for you.

Key considerations for selecting your data sources

There are a variety of considerations to make when selecting the right source of data for your organization and many are based on your unique talent needs. Trade-offs often need to made.

*The COVID-19 pandemic brought another dimension to Geography as employees can work anywhere within a country, or globally, and still successfully fulfill the same role. This may force organizations to review Geography criteria in more detail.
1 Sector Sector-specific competition for talent Cross-sector competition for talent
2 Peers Only direct competitors Broader talent markets including aspirational organizations
3 Geography* Local (e.g. national sample) International
4 Size Organizations comparable in size Diversity in organization size (smaller/larger)
5 Structure Corporate/HQ organizations Subsidiary organizations
6 Maturity Mature organizations Start-ups/Scale-ups

A thoughtful approach to sourcing data can help you strategically identify your talent market(s), and at the same time, ensure your compensation programs are built on a solid foundation that allows you to attract and retain the talent you need now and in the future. That’s the power of data.

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