Should You Do a Market-based Salary Survey?

Do you know what your competitors are paying their employees? Why should you care?

A few years ago, a manufacturing client hired me to do a market salary survey for them. Their market share was decreasing and they were losing out on bids, so they decided to revamp their entire compensation program. I did a marketplace study for them comparing industry salaries to their own pay structure. We found out that they were overpaying their employees by about 20% compared to the market!

That sounds great until you realize that overpaying was the reason they could no longer be competitive in the industry. Rather than keeping a finger on the pulse of salaries in their industry, they gave raises to everyone each year. They had a great working environment and were doing a great job retaining their people. Their average employee had been with the company around 21 years.

But giving raise after raise year over year was pricing them out of the market. There wasn’t going to be a company anymore if they didn’t do something. Nobody was excited about it, but they knew what they had to do. They had a town hall meeting with their employees and explained why they had to put a freeze on wages.

It was difficult but it helped them in the long run. They needed that external look that they hadn’t had in many years to get competitive again. They’re still in business today and they’re thriving.

Doing a salary survey was the right choice for them. It might be the right choice for you too if:

1. You want to make sure you’re adequately rewarding your current employees. A salary survey is a great check against the marketplace to see how salaries are moving. At TurboExecs, we’ll look at the competition in both your industry and your geographic area to get a fuller picture.

2. You’re having trouble attracting new talent or retaining current talent. If you can’t convince people to join you and you can’t get them to stay, you have a big problem that could be happening for many reasons. A good salary study can find out if your issue is pay related or if it’s something related to culture.

3. You’re opening a new facility. If you’re opening a new facility in a new area and want to get a sense of salary budgeting, a salary study is a great way to go. You can proactively get an accurate picture of the pay structure needed to set your new facility up for success.

4. Government regulations are changing. In the third quarter of last year, I had a lot of organizations wanting salary studies because of new overtime regulations that were supposed to go into effect on December 1st. Companies wanted to get an accurate sense of what was going on in the marketplace in response to the new regulations. They wanted to remain competitive but didn’t know if they needed to adjust salaries.

It’s a good idea for any company to check the market on key positions every two or three years to make sure you have an accurate picture of what you need to do to compete for talent. You don’t want to wait to find out that you’re wrong until you’re losing good people or can’t recruit the talent you need.

Salary surveys allow you to be much more proactive. Our salary surveys compile published and purchased survey data that is thoroughly vetted to ensure its accuracy. When you know you have good, reliable data, you can confidently use it to make smart business decisions.

Do you want to be proactive and more competitive? If you’re ready to take the next step but don’t know have the time or resources to get the information you need, contact us here and let’s talk!