Defining your Compensation “market”

Shawnee Love   •  
September 20, 2010

Last week, I talked about picking a salary survey and its role in developing ranges of pay in your company. A salary survey gives you information on what other organizations pay for similar jobs but the value of the survey is derived from its ability to provide robust data from comparable organizations in your market. How you define your market is absolutely critical to making a good decision because there are huge differences in base pay depending upon:

  • the type of organization (not-for-profit, unionized, crown corp, etc.),
  • the industry (consumer packaged goods, tech, hospitality, etc.),
  • the size (<10 employees, <100, <1000…),
  • the stage of company lifecycle (start up, growth, mature, decline),
  • the location in Canada (major centre, small one-horse town, etc.),
  • the level of profit (breaking even, million$, billion$, etc.) etc.

Once you figure out what your market is (i.e., what types of organizations you want to be compared against) then you are ready to find a good salary survey.

Hint: A laundromat will typically compare itself to laundromats in the same city, but a soft drink manufacturer in a major centre would probably compare itself to all consumer package goods manufacturers nationally.

How do you decide who is in your comparable compensation market?