Like many recruiters, Ruben Moreno often had to rely on outdated market research when setting salaries. As an executive recruiter for Blue Rock Search, a recruiting firm in Sarasota, Fla., Moreno regularly has discussions with talent acquisition leaders about establishing proper compensation.
"It used to be, we would look at data from last year for compensation benchmarks, but the world is much different now," Moreno said. "Compensation is changing on a quarterly or even monthly basis because of the competition for talent and the worker shortage in many areas. We need better data faster now."
To get access to more-recent market compensation and talent supply data, Moreno partnered with ThinkWhy, a talent intelligence software provider headquartered in Dallas. ThinkWhy's cloud-based tool combines aggregated monthly labor data from government and other reporting sources and validates it against millions of U.S. pay stubs to provide salary recommendations and labor supply forecasts in many metropolitan markets for thousands of job titles.
Moreno said he uses the AI-driven platform to benchmark compensation data by industry segment or company size to make more-accurate salary recommendations to his clients. In a time when pay levels are rising and talent availability is falling, he believes such research-driven market intelligence can give recruiters a competitive leg up.
"Speed and accuracy of information has become more important than ever for recruiters," Moreno said. "Rather than salaries increasing by 3 percent to 5 percent within pay bands, it's not unusual to see target compensation for a high-demand job jump 20 percent in a quarter today."
Growing Need for Real-Time Data
Talent acquisition managers can use similar data to convince senior leaders to invest in new recruiting technologies, recruitment advertising strategies and more.
"It gives them a big picture and helps plan for what's to come," said Chris Russell, managing director of RecTech Media, a recruiting consulting company in Trumbull, Conn.
But Russell said it's also important for recruiting leaders to conduct due diligence on these platform providers to find how they compile their data and ensure its integrity.
Jay Denton, chief labor market analyst with ThinkWhy, believes today's recruiters need data not only on historical mean salary levels for jobs but also on the level of compensation necessary to land candidates in highly competitive recruiting scenarios.
"Depending on the job role, that salary number could be $5,000, $10,000 or $15,000 over what the median salary rate for that role is today," Denton said.
Denton said recruiters often want to know what kind of talent they can attract given a certain salary budget. For example, a recruiter might initially be looking to pay $100,000 for someone with 10 years of industry experience.
"They can get access to data that shows them, given current market conditions and benchmarks, they might have to move their expectation down to six years of experience to get someone at that salary level today," Denton said. "It allows for better conversations around salary even before recruiters start looking to hire people."
Talent intelligence platforms also can give recruiting leaders data-based insights into what they'd have to pay in different areas of the country to get candidates with similar experience or education levels. That can help them identify the most cost-effective cities in which to recruit remote workers, for example.
"What's often overlooked is the prospect of finding a talent upgrade at a similar salary level," Denton said. "For example, you might be able to hire someone with six or eight years of job experience in the Midwest for the same salary you'd pay a candidate fresh out of school in the Bay Area."
Tracking Talent Supply and Demand
Talent intelligence platforms also can give recruiters a view of fluctuating talent supply levels in given geographic areas for specific job titles.
"I use migration patterns the data supplies in terms of what areas in the United States people are leaving and where they're moving to," Moreno said.
ThinkWhy's index incorporates population movement, the types of businesses bouncing back fastest from the pandemic, educational attainment, wage growth and other factors for 400 U.S. metropolitan areas.
"We combine that data into an overall index that shows the hottest areas of the country in terms of job growth and talent supply," Denton said. "These are the areas where wages are going up, where jobs are being created and where the workforce is most highly educated. It allows recruiters and job candidates to focus on those markets if they're looking to hire or to find a new job."
Using Market Compensation Data to Retain Employees
Experts say managers also can use market compensation data in their efforts to retain employees who may be considering leaving for greener pastures. Research shows record numbers of people are continuing to quit their jobs as part of the Great Resignation.
Managers could upload an existing employee's salary into a talent intelligence platform, for example, and based on the employee's experience level, education and geographic location, determine what salary the worker might qualify for if he or she hit the open market today. It then falls to the organization to decide if it wants to adjust employees' salaries or other factors in an attempt to retain them.
Market Intelligence on Emerging, Declining Skills
Some talent intelligence platforms also can give HR leaders market-driven insights into how job roles are changing and what new skills will be needed in their workforce in the future.
One such platform is Vancouver, British Columbia-based SkyHive, a software-as-a-service product that compares trends in external labor markets against the workforce skills an organization possesses to identify skill gaps that may require reskilling or recruiting solutions to close.
SkyHive processes large amounts of data each day on the global labor market and on trending job skills from sources like government databases, job descriptions posted on popular online job boards and more.
Prathiba Shah, chief operating officer at SkyHive, said the platform's data also can help recruiters evaluate regional or local talent supplies when they're looking to fill jobs. For example, SkyHive worked with a banking company that was moving from legacy technologies to cloud systems and needed new workforce skills internally to support that shift.
"Recruiters wanted to know where they could find people to fill those jobs, and we were able to do location-based mapping of our data regarding the talent supply in areas like Europe and Asia to help them find the concentration of talent they needed," Shah said.
Dave Zielinski is a freelance business writer and editor in Minneapolis.