Labour Market Data in Developing Countries – A Birches Group White Paper – January, 2011 In smaller markets, there is more limited incumbent data.
Depending on the degree of
specialization for the benchmark jobs, fewer matches may result. And if you limit yourself to just employers in your industry, there are fewer still. How many is enough? At what point does incumbent data become unreliable? With limited numbers of incumbents, the average reported for any particular benchmark job could move in the opposite direction from the market. Could this be right? Consider the case of two very experienced accountants, each with over 30 years of service with their employer, earning far more than entry-level professionals. Both of these accountants decide to retire, and are replaced with entry-level staff. In a survey with 10 accountant matches, the average might go down for the position – even though all indicators point to an increase in the market that year. After all, the two positions represent 20% of the 10 matches! The real challenge in small markets is finding enough data to make meaningful comparisons. Consistency Another reason averages could move in the wrong direction is lack of consistency. This can be caused by two common problems. One is the variation of participating employers in the survey from year to year. It’s difficult, especially in smaller markets, to substitute employers and not have a significant impact on the data. This is because not every employer has the same compensation philosophy or market positioning, and may not match the same jobs. The second problem is reliance on employers to match jobs. Each survey provider uses a different methodology for leveling survey jobs, and leaves it up to the participating organization to understand the methodology and apply it to their own organization. All of the providers do their best train their clients in their leveling techniques, and to validate the data submitted by their clients. But how can they guarantee the consistency of the matching performed by individuals they do not employ?
©2011 – Birches Group LLC
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