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The Internet is Only Part of Salary Benchmarking

For this small company, the Web is a source for double-checking those numbers with the marketplace.

December 20, 2000
Related Topics: Compensation Design and Communication, Internet
Just because a company is small and may not havedeep pockets or want to pick up the tab for compensation consultants doesn’tmean its HR staff can’t benchmark salaries accurately and competitively withthe help of the Internet.

    Vancouver-based StockHouseMedia Corporation is one company that does just that. The international providerof online financial content and community development products has 210 employeesin the United States, Canada, United Kingdom, Australia, Japan, Hong Kong, andSingapore. Shawnee Love, StockHouse global director of human resources, uses theWeb in combination with traditional benchmarking methods when pegging salariesfor everyone from Web designers and developers to secretaries.

    E-mail is a maincommunications tool that Love uses to request salary data from professionalgroups she belongs to such as the Human Resource Management Association and HighTech Exchange Group, or to participate in salary surveys. She and her staff alsoinformally keep tabs on going rates and trends in the marketplace and atspecific companies via job boards, industry organizations, online databases, andcompany Web sites. “We source information that is both industry-related aswell as functionally related and of varying geographies, such as state,provincial, country-wide versus marketing, sales, HR, tech, etc.,” Love says.

    Among the sites she frequentsare e-recruiting destinations such as,,, and, a free salary survey site thattargets individuals as opposed to employers, is another source. The site ispopular among many companies of varying sizes even though it draws plenty ofcriticism from compensation experts for the reliability of its data.

    The nonprofit industry groupWorld at Work, the former American Compensation Association, issued a formalcaution at the end of November against free salary survey sites, though it didnot mention by name. The group, which has more than 26,000 members,also suggested guidelines for finding the right site and the right data.

    Compensation expert BrianaBennett also is wary of Its methodology isn’t clearly defined,says Bennett, the president ofRedmond, Washington-based ERIEconomic Research Institute, a company that analyzes third-party salarysurveys. Nonetheless, HR managers from companies of all sizes heavily trafficthe site. Few, however, may be willing to admit it, she adds. defends itsreliability, and states that its free database has information on more than 1.3million incumbents and 5,000 companies. The data also is adjusted or aged toaccommodate the movement of salaries over time. But even advises acautious approach to its data. “If a job description is a ‘pretty good’match but not perfect, the differences in the skills, experience, and knowledgecould translate into a difference in market compensation,” says Nate Soucy, aspokesman.

    The Internet can be a greattime-saver and a solid source of information if it also involves due diligenceon the part of HR staff, says StockHouse’s Love. That includes checkingnumbers and verifying source data. There’s plenty of unreliable data withoutadequate source and methodology information that can make the essential jobmatching a guesstimate at best. “When I say I check it, I really, really do. Icheck a lot of different places.”

    Plus, interaction with theWeb is only one part of the benchmarking process. Love, who has seen companyemployment jump by 140 people over the last 14 months, starts with what she saysis the more complete traditional three-ring-binder salary survey purchased froma reputable third-party group like Towers Perrin. The price: anywhere from$1,000 to $10,000, depending on who is doing the survey and the extent of thedata. Other good survey sources, at least in the high-tech space, she says,include the Vancouver-based Western Compensation & Benefits Consultants,KPMG Group, Mercer, Radford, and Aon.

    She uses this data to set abase salary. Then, because the paper copy is out-of-date almost immediately, theWeb is a source for double-checking those numbers with the marketplace.

    If a number or something elsedoesn’t make sense, check it out. Consider the case in which a job candidatecame to Love with a Web site posting offering a ridiculously high amount ofmoney for a position. She looked further, and discovered that the company had areputation of being a difficult place to work. As a result, it offered big sumsof money to draw talent. StockHouse opted not to match the salary.

    Despite situations likethese, the Internet still gives Love, as an HR manager of a small company,access to information that a company her size might not ordinarily have andcertainly didn’t have before the advent of the Web. In turn, that informationboosts her HR team’s credibility in the recruiting process when it pegs“fair market” salaries. That alone saves time and money. “You don’t havean employee saying to you that your paper copy is out-of-date. You don’t haveto buy a salary survey every three months. You can check it on the Web and keeppretty up-to-date fairly easily.”

    If you’re looking for freeand fast information on the Web, Love suggests that the best sources aree-recruiting sites like Monster and Workopolis. Seeing what other companies arewilling to pay for similar positions can provide a solid salary range. Startwith a needs assessment of your company. Questions to ask are, realistically,what positions are open, what need is the company trying to meet, and who is thecompetition? A small company like StockHouse might not need information on whatIBM is paying for the same position, or to purchase a big-dollar survey withunnecessary data.

    Once on the Web, check outnot only the salaries but specifically the research and methodology behind thenumbers, and be wary of any company not willing to explain the origin of theirdata, adds Love.

Workforce,January 2001, Vol 80, No 1, pp. 88-91  SubscribeNow!

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