🤔 The decisions you need to make 🤔

Which primary data source(s) will provide the best balance of scope, reliability, and cost?
Which secondary data sources should be used to supplement your primary data?
What’s the minimum viable dataset needed to move forward with salary benchmarking?

Intro

Before you dive into building salary bands, you need to choose relevant and reliable data sources, and there are plenty to choose from. Market data offers valuable insights into industry standards, but it should guide your decisions, not dictate them. Compensation is both an art and a science, and there is no single right way to get to a fair and competitive outcome.

The data you see is always an estimate, not an absolute truth, and should be used as a reference point rather than a rigid rule. The best compensation strategies balance competitiveness with fairness, ensuring that decisions reflect both market trends and what works for your business.

"Use survey data as a tool and not a rule"

So what data sources are there?

I break data sources into two buckets:

	Primary Data Sources	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.

1. Primary Data Sources

I’d start by recommending you choose a primary data source, also known as a 'Give to Get' salary benchmarking provider. In this arrangement, you trade your organisation's salary data for benchmarking data. These providers are known for offering reliable and validated salary benchmarks, and they also provide a levelling structure for alignment. This ensures an 'apples to apples' comparison, which is crucial for standardising the data set and distinguishing them from secondary sources.