Why use survey data?

Wage and salary surveys might seem unnecessary if you’re a small- or medium-sized employer, but consider these two scenarios:

Overpaying by just $1 per hour in a labor-intensive firm can have a devastating effect on the company’s ability to compete. It might endanger its very survival.

Underpaying by the same amount can be just as crippling. It can lead to higher recruiting costs, the hiring of less-skilled employees, increased training costs, and higher turnover—not to mention lower morale and motivation throughout the organization.

In short, you may think you're surviving just fine without worrying what other companies are paying their employees, but you have no way of knowing just how much your lack of concern is costing the company in other, less obvious ways.

Chances are that even without formal surveys, you’re conducting informal ones all the time—even if you don’t realize it. For example, most employers pay attention to the:

  • The salaries that job applicants demand;
  • The rates that departing employees say they’ll be receiving from their new employers;
  • The information about wages that is passed around at seminars and business meetings; and
  • Reports about wages in the news media.

You use this fragmentary information to make decisions about pay raises, fringe benefits, and overall pay policies. But that’s all it is—fragmentary information, not the complete, accurate picture.

How do I use survey data?

Among other things, wage and salary surveys can be used to:

  • Determine where your company's pay rates for certain jobs or groups of jobs stand in relation to the labor market;
  • Double-check the results of the company's evaluation program;
  • Determine how competitive your company's starting salaries are in relation to those elsewhere;
  • Determine the need for (and the amount of) an across-the-board increase; and
  • Prepare for wage negotiations with union representatives.

Following are things to consider when comparing the salary survey data available on HR.BLR.com to the salaries paid to employees at your company:

  • In making judgments about your pay plans, look for data involving large numbers of employers. The more employers that contribute data to a given job, the more reliable these data become.
  • Review the responsibilities for any position you find here before comparing it with one of your positions. In other words, don’t make comparisons by title alone.

What are the sources of BLR’s survey data?

To better meet the demands of our subscribers for salary data on more jobs, for more industries, and for more local areas, we compiled employer-reported data from reliable surveys available in the public sector.

Our compensation professionals analyze survey data for accuracy and market trends and they match our job descriptions to those used to collect data reported in the salary survey. As a result, BLR provides you with current, reliable information on thousands of job titles and hundreds of industries you can feel confident about using to benchmark competitive salaries in your organization.

Does BLR include data from the Bureau of Labor Statistics (BLS)?

BLS is a major surveyor of salary data and we would be remiss if we did not include that data in BLR salary data tools. Additionally, we adopted the federal government’s standardized structure for job titles and industry classifications.

BLS conducts the largest nationwide salary survey with more jobs, industries, and local areas than any other major salary data source and makes that data available to the public. Additionally, BLS surveys report data for larger groups of incumbents in each job than any other single survey.

Ignoring this large piece of the compensation survey puzzle would mean giving you only part of the information you need to administer your compensation program.

How often is the salary survey data updated on the site?

To provide you with the most current information available, we update the survey data in the Salary Center twice a year – in February and August.

How do I rank jobs to make sure there is internal equity in my compensation administration program?

Many employers use a system such as BLR’s nine-factor job evaluation tool to rank jobs on the basis of skill, education, experience, and duties. By assigning numerical scores to the fundamental elements of each job, the point-factor system yields a neatly tiered arrangement of jobs, with each tier representing a group of jobs—typically, vastly different in content that pay roughly the same rate. Point-factor job-pricing makes it possible for anyone to demonstrate objectively just what criteria were applied to the job and compensation analysis and how the point scores were calculated, lending considerable credibility to the final result.

Moreover, the fact that all jobs are subjected to the same analysis ensures a high degree of internal equity and fosters a perception among employees that the system is fair.

Of the many systems of point-factor analysis that have come into fashion over the years, the most durable has been that used by the federal government to classify its civilian workforce. The federal government uses a simple system employing nine generic factors to describe the full spectrum of job demands and levels of responsibility. The government's system measures the requirements of each job against what is known as the "Primary Standard." This consists of a set of narrative descriptions of job characteristics for each of the nine factors. The descriptions range from relatively undemanding to extremely demanding, with a point score prescribed at each level, as in the following:

Factor 1: Knowledge 50-1,850 points
Factor 2: Supervisory Controls 25-650 points
Factor 3: Guidelines 25-650 points
Factor 4: Complexity 25-650 points
Factor 5: Scope and Effect 25-450 points
Factor 6: Personal Contacts 25-110 points
Factor 7: Purpose of Contacts 20-220 points
Factor 8: Physical Demands 5-50 points
Factor 9: Work Environment 5-50 points

More demanding jobs with higher levels of responsibility yield higher point scores and occupy higher pay grades. Once the aggregate score is calculated, the corresponding pay grade is determined. BLR has grafted the government's point-factor system onto this service by adapting the table to our system of pay.


What's the difference between exempt and nonexempt?

The federal Fair Labor Standards Act (FLSA) requires employers to pay employees at least the minimum wage for all hours worked and overtime for hours worked in excess of 40 per week. But the law also exempts certain kinds of jobs from the minimum wage and overtime requirements if they meet specific criteria in the FLSA and related federal regulations.

Basically, the FLSA exempts broad categories of "white-collar" jobs from minimum wage and overtime requirements if they meet certain tests regarding job duties and responsibilities, and pay certain minimum salaries. Hence, workers in these jobs are known as "exempt," and, in general, they fall into three main categories: executive, administrative, and professional. The FLSA also provides exemptions for outside sales personnel, certain specialized computer personnel, and employees covered by the Motor Carrier Act (MCA).

One key element required in order for a position to be classified as exempt is that the employee be paid on a salary basis. This means that, with few exceptions, exempt employees must be paid a predetermined amount each pay period regardless of the actual number of hours worked. Under the FLSA, exempt employees must be paid a weekly salary of no less than $455. As a general rule, employers may not make deductions from the salary of an exempt employee for either the quality or quantity of work. For instance, if an exempt employee is 2 hours late to work, the employer may not dock his or her pay. For additional information, visit the Library on HR.BLR.com and review the information under the topic “Exempt Employees.”

Warning: A salaried employee is not necessarily an exempt employee. A nonexempt employee may be paid a fixed salary for a certain number of hours each week, e.g., $400 for working a 40-hour workweek, which amounts to $10 per hour. Even though the nonexempt employee is paid a salary, if he or she works more than 40 hours in a week the employer must pay the employee overtime for the extra hours at a rate equal to 1.5 times the regular rate of pay. In this example, the regular rate is $10 per hour and the overtime rate would be $15 per hour. Likewise, if a nonexempt employee works less than 40 hours in a week the company could reduce the pay for that week.

Copyright � 2020 Business & Legal Resources. All rights reserved. 800-727-5257
This document was published on http://HR.BLR.com
Document URL: http://hr.blr.com/salary_center_help.aspx