I worked with a mining company, and they had purchased salary survey data to benchmark their jobs.

Once the jobs were market priced and pay grades were assigned, the response from the mining company HR team was that’s not market.

After asking more questions, it turns out that the market for the operations mining jobs was the union rates offered by other mining companies nearby.

So, we changed our benchmarking approach to use the union pay rates and not the purchased salary survey data.

This solved the problem for the operations jobs that were performed by the front-line employees.

And then we compared the pay grades assigned based on union pay rates to the grades assigned to supervisor jobs. We needed to be sure that we weren’t causing pay compression with the supervisor and manager jobs given the pay rates for front-line workers.

Doing compensation benchmarking sounds easy. But often it becomes more complex and time consuming as you progress the work.

Don’t assume that the market data in the salary survey is the market. Employers have unique comparisons in each work location related to who they consider their competition for talent.

And sometimes that means looking at union contracts, documenting candidate pay expectations, and summarizing job posting pay ranges to develop your unique understanding of the market.

This is why you want an experienced compensation professional on your team. My team and I know that simple is nice but sometimes complexity in the analysis is necessary to determine how close to market an employer is paying.

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