Reader Christine asks about the best way to age survey data; whether to use salary structure movement or salary (merit) increase budgets as the basis for aging.
Aging survey data, for the uninitiated, is the process used to update or bring the survey data forward, covering the gap between its actual effective date and the date you need to apply it. Because most pay surveys are conducted on a periodic basis (the most prevalent schedule still being an annual one) and because in most cases there is a gap - minimally - between the collection/effective date and the date of survey publication, the need to age the survey data is simply an accepted fact of life.
The question that Christine poses, then, is what rate to use in aging the data. It's a good question, since most salary planning surveys give you both sets of data (salary increases and structure adjustments) to select from.
Since our ultimate objective is to mimic the rate at which market pay is moving, using the average salary increase amount or salary increase budget is a better indicator of how much the average employee's salary is moving in a year. Average structure adjustments, on the other hand, reflect the degree to which organizations are moving their pay ranges in order to keep them competitive, which can and often does differ from the average increase planned or delivered. My experience in watching this data over time would suggest that, on average, structure adjustment numbers tend to run at 60%-70% of salary increase numbers. Using structure adjustment rates to age your survey data, therefore, puts you at risk of underestimating actual market pay growth.
(In fact, I would argue that structure adjustment data, while certainly interesting, ought to be disregarded entirely when making pay programs decisions, including how much to adjust your own salary structure(s). Pinning your salary range movement to a rate that lags actual salary movement by 30% to 40% will ultimately leave you with a structure that lags the market. But perhaps that's a topic for another post.)
My advice in summary: Use salary increase - not structure adjustment - numbers as your rate for aging survey data to ensure that you are simulating market pay movement as accurately as possible.
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