Compensation Databases
Which one should I choose?
Hey, Friends,
Tons of things happening on my end, but I have to wait to share them. Thus far, however, I already have 33 people on the wait list for the Data Wizardry for HR live cohort bootcamp. Interested in joining the list? Sign up here!
The interest survey gave me some visibility into key learning outcomes HR professionals are looking for:
Storytelling: How do I create narratives with data?
Analytics framework: Where do I get started?
Expertise: What are the basic tools and models I need to learn?
Stakeholder support: What's in it for them?
Proactive HR Strategies: How to use analytics for HR strategy?
Anyway, I am excited to continue to see the responses come out and launch this new course!
But...
Today, we are here to talk about compensation. And specifically, compensation databases.
Time and again, I hear the question:
Which compensation database should I use?
So, I figured, let's talk about it!
What is the comp database for?
How to select one?
What databases are available?
Let's get going!
Compensation Databases
How do we know what the market is paying for any given role?
Sure, we can ask around and see what our peers are paying. Or, we can pool the data from multiple organizations into a single, confidential database and, by the law of average, get an accurate distribution of compensation for different roles.
This way, we will see what the high rollers are spending (those at the 75th percentile of the market) and what more socially focused companies are spending (nonprofits; ~25th percentile). We will also see what an average company in our geography spends on comp.
Naturally, this would include a variety of compensation, including base, variable, allowances, and sometimes even equity.
Finally, it is usually fairly safe to assume you will be asked to contribute to the database to receive access. It's a bit of a show-me-yours-and-I-will-show-you-everyone-else scenario.
So, how do you select the database?
There are tons of databases out there.
Small databases that focus on start-ups and scale-ups, local databases with companies in the network, and large global databases with millions of data points from various companies.
When choosing the database, you probably will be constrained by the amount of budget you have, so that would be your first constraint.
But also, you need not listen to what everyone is saying about their favourite database.
You need to find the database that you actually believe is a solid representation of the world that you live in.
Yes, that's exactly what I mean.
Your goal is to find the database that represents your population and your competition well and has reliable data to get sensible estimates.
Here is a short list of criteria:
Industry: Does the database represent companies well in your industry?
Size: How many companies are represented? How many individual data points are used in the estimate?
Locations: Are your current and future locations represented in the database?
Job Families: Are all your job families represented in the database? If not, why not?
Companies: What are some examples of companies represented in the database? Are any of them your competitors?
Data Fields: What data is represented? Base and variable will be there, but would you want to calibrate to options?
System: What system does the database use for job classification?
User Experience: Is it easy to navigate the portal?
Price: Does it fit in your budget? Usually, there is room for negotiation.
Collect the data on each of the above! You can even score them on a scale to identify which database fits your organization best.
Databases available
I mostly work in mid-market tech in my compensation practice, so I am quite familiar with databases that are common here. And there really are 3 that we often hear about:
Of course, there are others like TAP, Carta, and WTW, but I have seen the three above (in the bullets) most often and have used them myself.
Here is my honest take on each (I do not get any commission here):
#1 Radford
This database is my favourite.
It is the most comprehensive I have seen, has a good representation locally and globally, and is most aligned with the data we see from recruiters, suggesting the data is more recent than that in other databases.
On top of that, you get a pretty easy-to-navigate portal that will help you easily calibrate compensation across any number of dimensions.
Though this one does not integrate with other systems, or perhaps I don't remember it being able to do so, it represents the most reliable data that I have seen thus far.
#2 Mercer Comptryx
This second database is a decent choice and a bit more affordable than Radford.
They do have global data for technology companies with many representations. That said, the sample sizes tend to be smaller here, and the data's aging is obvious as the data seems to trail candidate expectations in the market significantly.
It's also an easy-to-use system and portal and is a good starter database!
What is also good about Mercer is that it integrates with some tools out there, including the Barley Compensation Tool and HRIS systems like Hibob.
#3 Pave
Previously Option Impact, this database included largely start-ups, which means the compensation does not perfectly represent what scale-ups or larger organizations would offer.
It's a good starter database, as it was free when I used it.
But the data are largely limited to the size of the company and the stage of the company.
Start here if you do not have a budget.
There you have it: 3 databases to choose from.
On that note, ciao!
K
Whenever you're ready, there are 2 ways I can help you:
#1
If you're still looking to get started in People Analytics, I recommend starting with my affordable course:
Practical People Analytics: Build data-driven HR programs to 10x your professional effectiveness, business impact, and career. This comprehensive course will teach you everything from building an HR dashboard for business results to driving growth through more advanced analytics (i.e., regression). Join your peers today!
#2
If you are looking for support in your human capital programs, such as engagement, retention, and compensation & benefits, and want to take a more data-driven approach, contact me at Tskhay & Associates for consulting services. Or reply to this email!