Before you dive into building salary bands, you need some relevant and reliable data and there are plenty of sources to choose from. Market data can give you helpful insight into industry standards, but it should guide your decisions, not dictate them. It’s always an estimate, not an absolute truth, and works best as a reference point rather than a rigid rule.
"Use survey data as a tool, not a rule."
That said, data still plays a vital role. One of its most important functions is to build credibility. When your compensation decisions are backed by solid benchmarks, it gives stakeholders more confidence, helps managers have clearer conversations about pay, and shows employees that your approach is grounded in evidence, not guesswork.
"The strength of your compensation strategy is only as solid as the data behind it."
I break data sources into two buckets:
| 1️⃣ Primary Data Sources | 2️⃣ Secondary Data Sources | |
|---|---|---|
| Description | These are benchmarking providers where you exchange your organisation’s salary data for benchmarking insights. | These include job boards, scraping platforms, local surveys, and informal data channels. |
| Key Characteristics | - Reliable, validated data - "Apples to apples" comparison - Typically more accurate and comprehensive - May come with a cost, depending on location and data requirements | - Often free or lower cost - Can fill in gaps or cross-check primary data - Less reliable, with less validation - May lack granularity and accuracy |
When picking your data sources, think about what works best for your needs. You want a balance of scope, reliability, and cost, but you also need to ensure the data supports your compensation strategy rather than simply replicating industry norms. And remember, always be transparent with your team about the sources you’re using.