Birches Group is Changing the Way You Use Salary Surveys

Birches Group is Changing the Way You Use Salary Surveys

Most human resources professionals are familiar with salary surveys. Consulting firms around the world offer labor market data, and have been doing so for decades.

And, you would agree that offering a competitive compensation and benefits package is a key element in attracting talent to your organization and retaining and motivating that talent towards the achievement of your organization’s mission.

So, isn’t it odd there are still many organizations that don’t participate regularly in salary surveys?

Are Salary Surveys Even Worth It?

Some organizations believe salary surveys are luxuries – expenses with little value – and so choose to do without them.  Others simply purchase surveys on an ad-hoc basis when acute pay issues are encountered. Without regularly updated labor market information, organizations are unable to make informed, data-based decisions on pay – relying instead on anecdotal ‘evidence’ from staff and managers (who hasn’t heard: “Well, in Company X they pay Y dollars for that job?”).  Participation in salary surveys – especially for global organizations – is critical. 

It’s a big world.  Compensation and benefits packages, the rate of market movement, and general labor market conditions vary greatly from one country to another.  For organizations that don’t participate regularly in salary surveys, what they know about the labor market can easily become outdated or inaccurate.  Basing pay decisions (often one of the highest expenditures in an organization’s budget) on outdated, inaccurate assessments of the market simply because salary surveys are expensive, or relying on word-of-mouth market information, is – as the saying goes – penny-wise and pound-foolish.

But when it comes to surveys, what is it that you are paying for?

One Size Does Not Fit All

Many consulting firms that carry out yearly salary surveys take methodologies designed for large, developed labor markets (e.g. the US) and apply the same approach in developing countries (e.g. Uganda).  But there are big differences between developed and developing markets, as shown in the table below:

As you can see, there are some important differences between developing and developed markets.  The salary survey you choose should apply a methodology that accounts for these differences and captures the nuances in each country.

One of the most common mistakes companies make in developing markets is seeking only sectoral data.  There are several reasons why this doesn’t work:

  1. The sectors are too small.  There are insufficient employers for a meaningful sample.
  2. The sector is highly stratified.  There could be enough employers in a sector, but only a few are leading the market and the rest are well-below those levels.  The data is skewed low.
  3. You ignore other prominent sectors.  In developing markets, the leading employers across sectors will provide a richer market position than a single sector view.

Don’t overlook the international public sector, such as embassies and multi-lateral international organizations, and international NGOs.  These organizations are well-structured and provide competitive packages.  They recruit a lot of the same talent most large, global companies seek.

Birches Group Knows What Works in Developing Markets

Birches Group has been conducting salary surveys in 150 developing countries globally for almost fifteen years. Recognizing the limitations of traditional, developed-market-based survey methodologies, Birches Group tailored its approach to meet the requirements of developing markets:

  • Developing markets are dynamic and fast-moving:

We update salary survey data three times a year in order to reflect the most current data from participating employers.

  • Labor market competition is multi-sector:

We gather data from targeted, leading private industry companies (both local and multinational), embassies and governmental organizations, and international NGOs.

  • Job matching expertise is highly variable:

Birches Group specialists match your jobs, ensuring a high level of accuracy and consistency in our survey data.  The whole data collection process is streamlined and customer focused.

We Don’t Stop There

Birches Group’s new Community™ Market Compensation and Benefits Survey Report provides comprehensive labor market data in 150 countries in a standard format that is simple, concise and easy to use, and consistent across all survey locations. Each report comes with an Executive Summary that identifies your organization’s placement in the market (i.e. how far ahead or behind you are) and how aligned you are with market practices in terms of benefits. Further, all annual subscriptions come with a free custom cut that allows you to select a sub-group of organizations, so you can target the ones that are of most interest to your organization.

We are available to assist salary survey participants in interpreting the salary survey report, selecting their custom cut of participants, and extending their use of survey data to salary scale design. Visit our website to learn more.