Salary reports – can you use them properly?

There are three categories of salary reports that are currently available (depending on the source of data):

1. Widely available salary reports (available for free)
2. Salary reports based on payroll data
3. Salary reports based on data sourced from recruiting processes

1. Widely available salary reports (available for free)

Characteristics

Such salary reports are available for free on job websites and the websites of HR advisory companies. They are very general in scope, often do not present regional differences, and the salary ranges provided are usually very broad and based on very large samples, including both beginners and seasoned experts in a given profession. However, they provide an outline of the framework in which employers function and allow you to determine the benchmark salary levels. There sometimes are huge differences between the data presented in such reports. They are a result of the different samples that are used. Professional researchers should provide a detailed description of the methodology and respondent profiles so that the reader will be aware of what socio-economic group was included in the study. For example, Antal's Salary Report presents data of highly qualified professionals and managers who gained their experience in medium and large companies.

Pros:

+ reports are available for free

+ quick access

+ diverse sources of data

Cons:

- very general data

Who may benefit?

If you are researching the market for the first time or are looking for information on jobs that new candidates are seldom recruited for by you organization, the widely available reports will be the perfect source of knowledge. They will also come in useful when you are dealing with one-off recruiting processes. For example, if you are tasked with recruiting a PR Manager once every six years, then such reports will give you a general outline and basic information on salary ranges. You can then determine whether hiring a given individual will be useful and profitable for the company.

2. Salary reports based on payroll data

Characteristics

Paid salary reports are based on official payroll data and thus more detailed and very reliable.  The organizations that sell such reports conduct studies on closed groups of companies that agree to make their data available. It is often required to make the your company data available before you will be able to buy such a report. Salary reports based on payroll data provide very useful insights into pay spines, however they do not necessarily reflect the salaries offered in the market. When analyzing such reports you must check how many companies of a similar profile were included in the study. You should not focus on the number of employees that were included. It may sometimes be the case that two companies from a given industry have a total of 3000 thousand employees with the same job title. The number may seem high, but keep in mind that the data does not reflect the trends in the market as salaries in similar positions are roughly the same within an entire organization. The second matter that you should focus on are job descriptions. How detailed are they? Do they fill the needs of the organization that wishes to buy a salary report? You should bear in mind that managerial positions in some companies may be held by professionals with 2 years of experience, without a team that reports to them and with no foreign language skills, whereas in others the managers are usually mature, head a team, have 10 years of experience in the industry and fluent knowledge of two foreign languages. If such vastly different professional profiles are included in one group of job positions, the results may be skewed even if the source data was accurate.

Pros:

+ very accurate data sourced from HR departments

+ reflects the pay spines in organizations

Cons:

- does not provide information on the current salary trends

- it is usually necessary to provide sensitive payroll information to an outside company

- there may be some issues resulting from the way in which jobs are categorized

Who may benefit?

If you are mostly interested in obtaining information about the pay spines used in the industry, reports of this kind will be the best source of data. They will provide you with the most accurate information on pay spines. Such reports are also useful when you are looking into the salaries of lower-tier employees, whose job descriptions and competences are usually similar.

3. Salary reports based on data sourced from recruiting processes

Characteristics

Salary reports that are based on data obtained from recruiting processes best reflect the current trends in the market. They are based on the recruiting processes that were executed by the recruiting company in a given year. The salary analysis takes into account the career paths of the candidates, therefore it shows the supply of specific competencies in the market along with their current value. Antal Market Research prepares such analyses and, according their observations, the salaries listed in recruiting firm reports are higher than in the two other report types that were mentioned above because they include the most sought-after candidates. Therefore, reports based on recruiting data will tell you how much you should offer a given candidate for him or her to accept your offer and how much your employees would earn in other companies.  Such reports often provide additional information on the raises offered (in percentages) that convince candidates to change jobs. Also, they outline the remuneration limits below which you run the risk of suffering from attrition.

Pros:

+ outline the salaries that are currently offered to candidates

+ allow you to make informed business decisions

+ include an analysis of the competencies available on the labour market

+ allow you to narrow down the target group (the sector, professional experience, competencies reflected by certificates, etc.)

Cons:

- do not provide information about employees with narrower competencies

- do not provide information about pay spines

Who may benefit?

If you are considering what salary to offer to a candidate or wondering whether the competition pays enough to convince your employees to leave the company, then this type of report will best suit your needs. It will also be the most effective tool if you are looking for an insight into a very narrow group of professionals, e.g. only those that hold a specific certificate and speak German.  

Each of the above types of reports has its own characteristics. Making the right choice depends on your company's needs and your knowledge of the pros and cons of each type of report. Plus, you can always use two or even three types of reports and look at the data from various angles.