Salary surveys seem to offer a reliable guidepost for evaluating your organization’s compensation plans. You may find them a good starting point when negotiating with a prospective hire. The problem is that compensation surveys are typically not accurate and in some cases, very wrong.
How would I know? Because I am a recruiter dedicated to placing candidates in the management consulting industry. Based on placements that I have made and conversations that I have had for many years with candidates and clients, the reported figures normally do not match reality.
Recently, a well-respected management consulting career advice website issued what looks like a definitive salary survey. It offers tremendous detail on over 100 firms using a retained search in Texas and a self-correcting methodology. The results are considered so definitive that they were quoted as broadly on FORTUNE’s website.
A different career-dedicated website featuring reviews of thousands of companies offers compensation information gathered from visitors to their site. This fully self-reporting model validates itself by relying on members to review and update information presented there. For many, this information is used as a reference point for candidates when negotiating their salaries.
Can you trust either survey during a salary negotiation? NO!
Salary surveys get attention and can even provide a kind of clickbait. But, despite the certainty with which the data appears, the truth is different. I personally analyzed the “self-reporting career website,” compiled the information, and presented the data to the CEOs of several consulting organizations. The CEOs’ reactions told me that the results especially at senior levels, could be wildly off the mark.
So, what should you do?
- Use salary surveys as a starting point, but don’t use them to make decisions.
- Take into consideration that the best people make more than average, and even if the survey information is accurate, you would need to offer more to hire and most importantly, to retain high-quality talent. We help our clients understand not only the compensation to attract a candidate but also the comp plan they would be excited about. It is always better to have a new employee happy about their financial opportunity from the start.
- One way to get more helpful data is to have your recruiter share compensation information from the market. We constantly talk with candidates about their needs and current compensation and provide our clients with executive coaching in Texas about how they can attract the best talent.
- Focus some effort on non-monetary compensation like benefits, PTO, a hybrid work environment, rapid advancement, or training. We focus on the career case and how someone can grow professionally in a role, not just looking to fill a job for the short term.
- Do not use surveys to negotiate compensation packages. This is especially true for candidates. Apart from having wrong data, you are likely to upset whoever you are negotiating with because your information is probably inaccurate.
- Finally, don’t feel bad if the survey results don’t match what you are earning. If you are making less than you see, it does not mean you are being treated unfairly.
Whether you are a CEO, an HR professional, a recruiter, or an employee, find another path to making compensation decisions. Surveys will lead you away from the truth. Ready to find exceptional executive talent for your company? Contact Magellan International today for an expert executive search in Houston, Texas that is tailored to your needs.
Leave a Reply