Tag Archives: Salary Data

Free Online Salary Data, Can We Trust It?

Free is tempting. Free is easy on your bottom line. Free can be deceiving.

We all want something for free, but as an HR professional, should salary data be on the list of freebies you take advantage of?

There are several websites that provide employees with free salary information so they can gauge their worth in the external market.

One site uses a compilation of salary surveys, but doesn’t disclose its sources. Another site uses data from job listings and supplements it with information from the U.S. Bureau of Labor Statistics.

A third site gathers pay information directly from employees directly in exchange for providing aggregate salary data for the employee’s job title.

Therefore, the question remains:

Can we trust free online salary data?

I’ve developed a 9-part self-assessment to help you determine if free salary data is worth the price.

1. Will It Cause You to Under- or Overpay?

It isn’t wise to use self-reported employee salary if it causes you to either overpay or underpay your company’s employees.

Now, overpaying may help you attract and retain employees, but your labor cost will become inflated, and so will your organization’s cost of products and services. On the other hand, underpaying will result in higher turnover and a dramatic increase in the cost of recruiting and training.

2. Is the Data Published by a Credible Source?

It’s important to know if the data is coming from a professional survey source (like the Compensation and HR Group), a trade association, a recruiting source, or a third party who has bought another company’s database.

A trustworthy survey company will identify the source of the information and provide additional information such as descriptions, demographic information about the participants, and the effective date of the data.

Without this information, you can’t determine whether the data is relevant.

3. Who’s Supplying the Data?

The salary data should be supplied by Human Resources professionals or others who know how to match jobs to surveys. Data may be less valid if supplied by individual employees who might inflate their job duties or salaries.

4. Are Job Descriptions or Level Guides Supplied?

A job title is not enough to determine a job match. You need the ability to determine if the survey description or level guide matches your organization’s job in terms of job content, education, skills, and experience.

5. What’s Done with the Data That Is Collected?

Compensation data should always be reviewed to eliminate mismatches and ensure accuracy and validity. It should not be included in a database without checks and balances against data that’s been received from other participants. With web survey sources, it may be difficult to determine whether the data has been audited.

6. Does the Survey Source Indicate the Effective Date of the Salary Data?

The best surveys have data reported as of a specific date and are recent (within the previous 12 months). Some survey resources collect data over a wide span of time, so it’s important to know when the data was effective and whether or not it has been aged.

7. What Labor Market Does the Data Cover?

To the extent possible, the survey data should be local. This is especially important in gathering salaries for individual contributor positions where employees have a certain commuting radius.

Also, you may want to gather data for a specific industry or from companies with similar revenue size or employee population. Web-based surveys may not have this degree of detail. Moreover, if they have too much detail, they might be extrapolating data to fill in any holes.

8. How Many Companies and Employees Are Included in the Data?

Reliable survey sources do not report information for a job unless there is sufficient data. For most internet survey sources, however, you can’t determine the number of data points that have been supplied for a particular job.

9. Do the Results Include Everything You Need?

It is helpful to be able to gather percentiles as well as average salaries so you can see the range of actual pay. Incentive, bonus, and total compensation information is helpful to have in addition to the base salary. Web-based surveys often lack this data.

Most HR professionals will attempt to gather at least three reliable sources of information to market price a job. Knowing the survey publisher and ensuring the data has been validated, you can be confident you’re providing an accurate compensation analysis for your organization.

Note: If you enjoyed this article, check out my new bestselling HR book Pay Matters: The Art and Science of Employee Compensation available now on Amazon.


© 2020 David Weaver. All rights reserved.