Understanding the Data:  Methodology and Process

Parker & Lynch acquired the enclosed data in partnership with Salary.com through their “Job Analyzer” research program, which continuously conducts nationwide salary surveys throughout several industries. Additionally, each office in our nationwide branch network has reviewed the data against their own internal data, as well as that of local clients and accounting and finance professionals in their market. Based on that review, some modifications have been made to the raw data, to ensure localized accuracy. 

Salary.com Market-Pricing Methodology

Salary.com purchases, directly from publishers, highly regarded compensation surveys that are generally and commercially available to non-participants. Salary.com uses these surveys internally, along with other data inputs, as raw ingredients for research in a multi-step, proprietary process that results in an independent assessment of the current market rate for thousands of copyrighted job titles and descriptions in Salary.com’s benchmark positions index. The result is Salary.com’s market consensus opinion.

Our in-house team of full-time compensation analysts performs this rigorous and highly analytical work. These individuals collectively have decades of professional experience - much of it gained at large HR consulting firms, including KPMG, Mercer HR, PricewaterhouseCoopers, Towers Perrin, Watson Wyatt, and others.

Each month, our compensation team re-prices all jobs in the Salary.com database. These monthly updates include several components:

• Adding new jobs
• Updating information based on newly acquired resource information
• Aging existing market data
• Adjusting to changing market conditions

Our market pricing methodology complies with the guidelines set by WorldatWork. We have categorized these standards into the four major categories shown below and have summarized how Salary.com complies with or exceeds them.

1. SURVEY SELECTION

The first step in market pricing is to determine reliable sources of relevant information. Salary.com uses only those sources that we determine are reliable and meet the following criteria:

• The survey sponsor is reputable.
• The original source of the raw data is employers (not individuals or recruiters).
• All data analysis and reporting techniques are consistent with accepted statistical methods.
• Each job description provides enough detail to ensure a proper match (this is important for both participants and users to be matching properly).
• Each scoped piece of data is based on an adequately sized sample.
• The data within the same survey is relatively consistent year over year.
• The effective dates of the data must be current.
• Each survey must be based on information provided by an adequately large group of participants to assure it reasonably represents the full group the sample is purporting to represent.
• Surveys must clearly be a high-quality, professionally assembled product.

2. MATCHING PROCESS

To make the best use of survey data, one must carefully match existing jobs to each survey’s jobs. The Salary.com compensation team uses the following principles to conduct job matches with salary surveys:

• Match based on job content (descriptions), not job title.
• Consider only those jobs that are at least a 70 percent match.
• Give the heaviest weight to sources that are the strongest match.

3. ANALYSIS OF SURVEY STATISTICS

The following are examples of proper analysis and interpretation of survey statistics:

• Make sure common terms such as "mean" are used consistently from source to source.
• Look at the dispersion of the data through a standard deviation, interquartile range, or other means.
• Disregard or give low weight to data cuts in which one or a few respondents appear to skew the results.

4. CALCULATION OF MARKET COMPOSITES

The following are standard practices in developing market composite data from salary surveys:

• Age the data to a common date.
• Apply specific aging factors based on market trends by industry, joblevel, and geographic location.
• Use market sources such as the WorldatWork Total Salary Increase Budget Survey and year-over-year increases in median pay from single survey sources as guidelines in developing aging factors.
• Apply weights to different survey sources as applicable.
• Apply the strongest weights to the highest-quality surveys.
• Apply job-specific weights if warranted based on the strength of a given cut of data.
• It is preferable to have at least three survey sources.
• Use surveys from different publishers to assure data independence.
• Pay careful attention to survey choices if fewer than three data sources are available or appropriate. If the sources do not meet selection standards, it may not be appropriate to market price that job (try slotting instead).
• These are examples of some of the industry standard principles Salary.com uses to develop the market prices reported in CompAnalyst. In addition, Salary.com has developed rigorous data auditing practices to ensure the consistency and integrity of each data point.

5. REPORTING ORGANIZATIONS & INCUMBENTS

Job Analyzer reports the number of organizations and incumbents used in the analysis from which the compensation information is derived. The number of organizations and incumbents displayed is a minimum estimate of the number of data points contributing to the pay information. If the numbers displayed for organization and incumbent’s information is not followed by a notation, the data used in calculating the Job Analyzer market composite exactly matches the selected job, industry, company size, and geographic location.
 
However, some of the compensation information reported in Job Analyzer is based on data that only partially matches the selected scope. Compensation information reported with a partial scope match is labeled with a “†” notation, which indicates that sufficient data closely matching the selected scopes has been used in the calculation.

If the number of organizations and incumbents is replaced with a “‡” notation, the job selected has insufficient data for the specified scope. Therefore, Salary.com's team of compensation professionals has estimated reasonable compensation figures for the combination based on all data available for that job and scope.

For example, if you queried a Housekeeper for the Boston metro / Healthcare industry / > 7,500 FTEs:  The “†” next to the incumbent and organizational counts signifies that the Compensation Team at Salary.com applied a differential to produce results for your query. In our example, we might have had data specific for Massachusetts but not Boston. Our Compensation Team would apply a factor to the Massachusetts data to account for the pay practices in Boston for Housekeepers.

This illustrates how Job Analyzer can be a valuable enhancement to your traditional surveys. We will make the extra effort using sound compensation practices and principles to produce results for you that are immediately actionable. Conversely, if you were to encounter this situation in a traditional survey, you would simply see N/As, having to make an estimate yourself.  Instead, our Compensation Team is doing this tactical work for you - making sense of the surveys.