The Right Price: In today’s market, salary has to be competitive
By Lynn Lochbihler
Value is a slippery concept. A pound of gold isn’t of any value to a
man starving to death in the woods, but a chocolate bar is a treasure
The old saying goes “The value of a thing is what that thing will bring.” There’s a lot of truth in that statement. Resources that are rare and highly desired by many people will fetch a much higher price than those that are common as dirt and desired by no one. This applies as much to human resources as anything else.
Recruitment and retention of staff will be served best if the compensation paid is competitive with the rest of the marketplace. But how can we tell what a competitive salary is for any given position? There are many independent factors at work here. If you’re seeking, for example, telecommunications engineers, and your region is figuratively overflowing with them, then we could expect their salaries to be significantly lower than in areas where they are in short supply.
Calling your competitors and asking them is an option, of course, but it’s one that isn’t recommended or likely to pay off. For one thing, this sort of “straw poll” method doesn’t yield very accurate results. Sound and methodically produced salary surveys do, and take into account all of the necessary factors to give the needed data.
We conduct our own market surveys, and integrate those results with salary data that we purchase from reputable and thorough sources. This gives the most accurate and up-to-date information on competitive compensation that it’s possible to get.
Although a little digging on the internet will reveal a seeming wealth of free data on salaries in various industries, it is wise to treat these numbers with the utmost caution. These online surveys can be a good place to start, and may serve as a very general indicator of salaries paid. However, relying on them can be risky, as many of them do not use the correct and consistent methodology.
These surveys may also rely on incorrect comparisons, or simply start from completely false assumptions. Rather than comparing apples to apples, or even apples to oranges (which do share some points of similarity) the situation is more like comparing apples to justice. The picture just doesn’t match up anywhere.
Another cautionary point regarding these free salary surveys is that they are very often out-of-date. The difference between two sets of data one year apart may not seem like much, but it can mean a world of difference in certain situations. Using outdated salary information to determine competitive compensation is a little like navigating exclusively with an out-of-date road map. There’s too much danger of driving your vehicle over a bridge that isn’t there anymore.
Determining competitive compensation doesn’t have to be an overwhelming task. With the right help, you can make sound business decisions knowing you have the right information.