In today’s competitive labor market, leaders are constantly balancing talent attraction, retention, and cost control. One of the most powerful tools in that balancing act? Compensation market data.

Yet many executives may not know the answers to the following questions:

What is market data?

· It’s external pay info that shows how similar roles are compensated across industries, geographies, and company sizes. It includes base salary, total cash compensation, short-term incentives, and sometimes long-term incentives.

How is it created?

· Market survey vendors collect job-level data from employers, clean it (removing outliers), standardize it (leveling jobs), and report it in percentiles (50th, 75th, etc.). Reliable data comes from firms like Culpepper, Milliman, Gallagher, Mercer, Radford, and WTW. Do not use crowdsourced pay data from sites like Glassdoor or LinkedIn.

How is it used?

Benchmarking: Set competitive base salary ranges and incentive targets
Talent strategy: Inform new hire offers, promotional pay adjustments, and retention plans. It also provides a framework for developing career paths and job architecture.
Executive pay: Provide defensible insights and total compensation data for use by Boards and investors
Compliance: Support pay equity and transparency initiatives
Internal equity: Align pay practices across similar jobs

But be cautious:

Market data is a guide, not a rule.
Don’t over-rely on titles. Job content matters and should be the primary focus.
Always align with your employer’s compensation philosophy.

For executives, using compensation market data wisely means making better-informed, more equitable, and ultimately more strategic pay decisions.

What else do executives need to know about using compensation market data?

#Compensation #Leadership #PayEquity #HR #HumanResources #MarketData #SalarySurveys #TotalRewards #PayTransparency #CompensationConsultant #SHRM #WorldatWork #CPO #CHRO #FairPay