The 8 Types of Compensation Surveys Explained

Compensation surveys are crucial tools for organizations to benchmark employee salaries and ensure fair compensation practices. However, with various survey options available, it can be difficult to determine which type is best suited for your needs.

In this comprehensive guide, we’ll break down the main types of compensation surveys and how they differ. By understanding the pros and cons of each, you’ll be better equipped to select the right survey methodology for your goals.

Let’s start our exploration of this important topic by defining what a compensation survey actually is.

What is a Compensation Survey?

At its core, a compensation survey collects and analyzes compensation data from multiple organizations. This data typically includes components like base pay, bonus information, benefits, perks, and more.

Surveys gather this data to represent typical “market rates” for certain jobs across industries, locations, company sizes, and other factors. Participating organizations receive a report benchmarking where their pay scales stand in comparison.

The goal of any compensation survey is to provide compensation professionals and HR teams with market intelligence. This allows for more objective, data-driven decisions around issues like internal pay equity, salary budgeting, and attracting/retaining talent.

Now that we have a basic understanding, let’s dive into analyzing the key types of surveys commonly used in the compensation space.

Industry Compensation Surveys

One of the broadest survey categories focuses on collecting data from specific industries. Some examples include healthcare, technology, manufacturing, and professional services surveys.

Key benefits: Industry surveys offer a view into market rates tailored to your organization’s field. Because data comes from peers directly competing for the same talent, it serves as an accurate benchmark.

Scope: Participating organizations represent various company sizes and locations, but all operate within the targeted industry. Position descriptions are also specific to that industry.

Consider if: You need market context primarily within your own industry rather than other sectors. Industry norms often hold more relevance than overall averages.

Limitations: Data may have limited customization options since surveys cover entire industries. Competitive overlaps between roles in different industries aren’t accounted for.

When benchmarking roles directly tied to your industry, these surveys deliver highly applicable market context. Just be aware other factors like location aren’t as customizable.

Regional Compensation Surveys

Regional surveys gather compensation data from multiple industries, but within a specific geographic scope like a metropolitan area or state.

Key benefits: Provides localized market rates that account for cost-of-living and other potential regional variables. Better addresses compensation challenges in your area.

Scope: Sources data from various industries and company sizes located within the designated region. Position profiles may be customized by industry.

Consider if: Your organization operates regionally and you need context for a local talent market. Regional factors play a major role in your pay practices.

Limitations: Sample sizes can be smaller than national surveys. Data may not adequately represent compensation dynamics between certain industries in the region.

For organizations competing locally for talent, regional surveys offer the most geographically relevant benchmarks. Just be sure sample sizes are substantial enough across industries.

General Market Compensation Surveys

As the name implies, general market surveys cast the widest net in terms of industries, company sizes, and geographic locations. They aim to establish overall compensation norms across a large, diverse sample.

Key benefits: Provides a comprehensive view of average pay across multiple dimensions for high-level benchmarking. Easy to find relevant position matches due to large data pools.

Scope: Draws data from thousands of participating organizations spanning all major industries, areas, and sizes nationwide to represent broad U.S. compensation trends.

Consider if: You need a high-level sense of general pay trends but lack specificity for detailed benchmarking. Looking for nationwide context.

Limitations: Averages obscure variations between industries, markets, and other factors. Specific relevance depends on how closely participant demographics mirror your organization.

Useful for top-down trend analysis, general market surveys aren’t as targeting as dedicated options. Still, their massive scope ensures position matches.

Public Compensation Data

While not formal surveys, publicly available pay figures compiled in databases serve a similar benchmarking role. Sources include government salary look-ups, nonprofit aggregate data, and open salary-sharing communities.

Key benefits: Freely accessible with no costs or long-term commitments. Provides a general idea of salary norms for roles without a survey investment.

Scope: Databases cover broad cross-sections of industries, roles, and locations but sampling techniques and standardization vary widely by source.

Consider if: You have limited budget and need high-level pay intelligence in a pinch. Looking to quickly validate internal pay ranges.

Limitations: Sources and methodologies aren’t vetted or consistently tracked over time. Specific jobs won’t always be represented. Data quality depends heavily on source.

As a low-cost starting point, public comp data offers convenience. However, quality widely differs so it may lack rigor for strategic decision-making.

Job-Based Compensation Surveys

Targeting specific roles instead of organizations, job-based surveys compile salaries solely for positions like software engineers, accountants, or project managers across diverse employers.

Key benefits: Extremely granular intelligence for benchmarking hyper-specialized roles. Great for validating pay ranges of unique positions.

Scope: Sources can include thousands of data points focused just on one occupation and its frequently variable sub-roles.

Consider if: Your organization employs roles not easily benchmarked in industry/regional surveys due to their uniqueness.

Limitations: Narrow focus means data exclusivity, potentially resulting in smaller or geographically imbalanced samples for some niche jobs.

When the goal is pinpoint accuracy for unusual or technical roles, job-based surveys offer supremely customized intel. Sample sizes depend on role.

Contribution-Based Compensation Surveys

A variation focuses on benchmarking performance-driven pay elements like commissions, bonuses, and other earnings tied to individual contributions.

Key benefits: Useful for setting attainable variable compensation goals and pay-for-performance best practices across industries.

Scope: Data covers contribution-based earnings in addition to base salary for relevant roles across participating companies.

Consider if: Your organization relies heavily on commissions, incentives, or other contributions to determine pay.

Limitations: Like job-based surveys, samples may be smaller or less representative for niche roles with irregular variable compensation structures.

For companies valuing measurable output, these surveys equip compensation strategists with applicable variable pay intelligence.

Executive & Senior Management Compensation Surveys

Exclusively focused on the C-Suite and other top leadership roles, these surveys provide competitive compensation data and best practices at high occupational levels.

Key benefits: Objective context for benchmarking executive pay, bonus plans, long-term incentives, perks, and structures suitable for board review processes.

Scope: Collects highly detailed compensation components cross-industry for CEOs, VPs, Directors and other senior management occupying comparable positions.

Consider if: Analyzing pay practices and packages for top executives and aspiring competitive pay norms at those levels.

Limitations: Participant pools represent large organizations able to finance senior executive pay surveys, potentially skewing data toward very large companies.

For appropriate compensation of top leadership, these granular surveys cannot be replaced for competitive pay analysis. Sample diversity needs consideration.

Customized/Private Compensation Surveys

As the name suggests, customized surveys are designed and implemented specifically for your unique needs. Private surveys operate similarly but limit participants.

Key benefits: Surveys can be tailored exactly to your required dimensions, roles, locations through one-on-one consultations. Ultimate customization.

Scope: Fully customized to research questions you identify. Participant pools potentially include direct competitors or clients if operating privately.

Consider if: Standard options don’t address your organization’s specific requirements or you want exclusive competitor intelligence through a private survey.

Limitations: Expense as they require full personalization and potentially smaller samples than standard benchmarks. Data exclusivity means no apples-to-apples comparisons.

When generic studies fall short, customized surveys deliver hyper-targeted relevance despite high costs and exclusivity tradeoffs. Excellent for niche inquiries.

The Right Fit for Your Organization

With so many compensation survey options, how do you determine the ideal type for your benchmarking and planning needs? Here are a few guiding questions:

• What roles specifically need analysis? General professionals or niche jobs?
• At what level do you need pay insights – overall trends or senior executive pay?
• Is industry relevance or geographic norms more crucial context?
• What is your budget and timeline to complete benchmarking?
• Will standardized or fully customized approaches serve goals better?

Analyzing these factors will help you pinpoint the survey methodology offering competitiveness without sacrificing applicability or cost-effectiveness. Choose wisely based on your unique organizational context.

Putting Compensation Surveys to Work

Now that you understand the primary survey types, the next step is leveraging selected data effectively. Here are common ways compensation managers apply insights:

• Set pay ranges and adjust salaries for internal equity and retention benefits
• Build competitive total rewards packages