How Employers Can Find Success in a Changing Compensation Data Landscape

By Joanne Sammer August 22, 2023

​More is better when it comes to compensation data these days.

Employers are looking for new ways to gauge the competitiveness of their compensation, where pay levels are headed, and how best to position pay to attract and retain talent. This means pushing the data marketplace for better access to the latest figures while also looking for new sources of information to create a more robust and well-rounded picture of the market.

"If HR is setting pay based on [certain data] sources, they need to make sure that they have the right sources," said David Turetsky, vice president of compensation consulting with

In some cases, this may include asking data providers for more frequent updates to traditional published compensation surveys and getting insights from recruiters on whether the organization is meeting or falling short of job candidates' pay expectations. It also means getting their own house in order to maintain the most current information on internal pay levels and pay practices.

The Pay Transparency Dividend

Perhaps the most significant addition to the compensation data landscape is coming from employers themselves. Thanks to the growing array of pay disclosure legislation, salary data for individual jobs in specific companies is increasingly available. While pay transparency laws are designed to level the playing field when workers negotiate compensation with a current or potential employer, these laws are also releasing new types of pay data into the market.

It helps that some companies are adding even more to market intelligence by going above and beyond currently required pay disclosures. For instance, starting at the beginning of 2023, Ally Financial "began proactively including pay ranges in job postings nationwide," said Brian Marsh, the company's senior director of compensation, rather than limiting this information to jurisdictions with pay transparency laws.

Employers can gather this information themselves, but new tools are promising real-time pay tracking using the employer-provided pay data included in job postings. These types of tools have the potential to "create a whole new immediate dataset from actual named employers," said Linda VanDeventer, vice president of compensation and career strategies with consulting firm Segal. This can be particularly helpful when seeking compensation insights regarding peer companies and other key competitors for talent.

However, there are a few caveats when factoring pay transparency data into compensation decision-making and management. First, information from pay disclosures on its own is unlikely to be sufficient to support compensation decisions. Second, mining this type of data by job title, for example, omits key steps used in formal compensation surveys, including the checks and balances for validating data and matching like-jobs accurately.

Finally, the patchwork of different pay transparency laws could prevent the development of consistent criteria for these disclosures. As a result, available information could vary considerably from jurisdiction to jurisdiction. For example, some companies may provide relatively narrow ranges in job postings, while others offer extremely wide ranges with lows and highs separated by tens or even hundreds of thousands of dollars for a single job title.

What pay transparency data can do is provide context for compensation decisions when this information is considered alongside current validated pay data.

"Even if [pay transparency] data is from a peer company, it is important to use it only as a guidepost to evaluate what your company is doing," said Mariann Madden, director of work and rewards at consulting firm WTW. After all, different companies can have very different pay programs and very different types of products and services helping to define specific jobs and required skills and knowledge.

Internal Data and Internal Pressures

Given the competition for talent and the resulting pressure on pay, employers may also need to beef up their own internal data collection and analysis. Any internal compensation analysis that involves internal equity or evaluating current pay levels, for example, needs to be as strong and accurate as possible given the ongoing focus on compensation fairness and the need to stay aligned with an evolving market for talent.

"Your analysis is only as good as your data," Madden said. For example, some employers' compensation management systems may not be tracking employees' overall level of experience and, instead, may rely on self-reported information from managers and employees about skills and expertise.

It is also important to augment internal data with immediate compensation intelligence from recruiters and hiring managers. To make the most of this internal data, it is important to push for more information during the talent acquisition process.

"Any time a candidate turns down an offer, look for the reason why," VanDeventer said. "It is not always pay."

Ally Financial uses this data to augment its annual market reviews and benchmarking to evaluate its competitiveness with the overall market, Marsh said.

"We rely on market data from multiple sources in addition to feedback from our experiences in recruiting talent to ensure that we are remaining competitive with the external market and within our sector," he said.

Getting the Most out of Available Data

To make the most out of available data, Madden urged employers to become more active consumers of compensation data. "Ask questions and make sure you understand the survey methodology, including how the survey is done and validated," she said. "How robust is the data?"

[SHRM members-only resource: Compensation Benchmark Report]

Another key question is the age of the data. Pay for some jobs may be changing so rapidly that organizations may need pay data that is no more than three months old. Jobs that can be filled by a larger pool of talent may be able to use data that is six months to one year old. This is also the time to make sure the organization is getting access to everything it needs from the available data, including job disciplines, pay ranges, minimums, maximums and median.

Employers may need to look at multiple datasets and sources to find what they need, including data from their peer group for the majority of their jobs. From there, employers may need to triangulate these multiple data sources to validate the data based on organization size and market to make sure the data meets their needs. For example, jobs and job titles may not match from company to company.

"The title may say director, but the job specifications may say analyst," said compensation consultant Lane Transoe. "One data point is not a trend, but multiple data points are."

Data from peers and competitors remains a crucial part of compensation management, but it is important not to get sidetracked by information on any one company. For example, Laura Morgan, president of consulting firm MorganHR, recalled one marketing executive who wanted to only look at a specific company for compensation data for his department's jobs. "Executive interference can be an issue," she said.

It is also important to keep the internal conversation focused on what the employer is doing, not peer companies. For example, a company with identified pay gaps could get distracted from remediating those gaps by, instead, focusing on how those pay gaps compare to those of its peers and competitors. This could lead to a focus on how to achieve parity with those peers rather than how to close that pay gap as much as and as quickly as possible.

Considering Sharing Data

As compensation data and information become more transparent, sharing more compensation data internally with managers, employees and job candidates can push this openness to a new and more productive level. This can help employers find out "how employees feel about their pay," Turetsky said.

"When managers and employees share information and insight into the pay package and the process for getting a raise or promotion, including what skills and training the employee needs to increase their pay, this can lead to a healthier and stronger relationship between employer and employee," he said.

Joanne Sammer is a freelance writer based in New Jersey.



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