There are many factors in attracting and keeping A-Players. Compensation is certainly a significant one - that can be tricky. The word conundrum is defined as “a confusing and difficult problem or question.” Here at Colosi Associates, clients rely on us to advise on executive compensation.
It’s hard to retain talent in a tight market. I understand why more organizations are seeking independent confirmation of whether or not their pay practices are in line with the market for similar-sized companies and similarly-scoped roles.
I first saw compensation surveys many years ago as a hiring manager. I remember thinking to myself, “I’m not sure who falls into those ranges for roles at manager level and above.” And even back then, the components of base, bonus, equity and benefits were difficult to understand.
I also thought, “What A-Player wants to be told that their company is paying in the 50th percentile? Or even 75th percentile?” Today, as a search consultant, the compensation expectation information* I gather directly from candidates often does not fit these ranges.
Common questions about comp surveys
Will the range determined by the comp survey attract the right candidates?
It depends on the caliber of talent you need to hire. When an organization hires an executive search firm to identify and evaluate talent, they are looking for A-Player candidates. If a potential candidate has a strong motivation to make a change or isn’t working, the survey range might attract them. But I suspect that boat of people is a 5x7 raft.
Why don’t comp survey ranges attract A-Players?
Comp surveys factor in organization size, type of organization (for profit, non-profit), stage of maturity, industry, geography and job scope, but they don’t have a way to factor in whether a particular survey participant is an A-Player, B-Player, etc.
If your organization’s location would be a significantly longer commute for the candidate and remote work options aren’t possible, the candidate would likely need a pay differential. The market is tight. A-Players can wait.
If your benefits are significantly different (PTO, health care costs for the employee or family etc) the candidate may require significantly more compensation to “make them whole.”
How can I use comp surveys effectively?
Having a well-presented survey report that contains many data points can make determining compensation SEEM more black and white. But, make sure you have other comp points beyond a survey. And if you want to lure someone from his or her current role, even if you’ve created a stretch opportunity as part of the offering (i.e. the candidate will be growing into the role), you may still have to compensate on the high-end of the range. That fact is particularly hard to digest: pay top end AND the person doesn’t come with, as one client put it, “all the bells and whistles.”
So much information about compensation flows freely that the market prices fairly, for the most part. Yes… for women and men. (The pay disparities that I see are nearly always explained by skill differences, not gender differences.)
We’re happy to talk more about comp, so let us know if you have any questions on compensation surveys. We look forward to hearing from you!
*Note: In California, you can ask what the candidate’s expectation is, but not salary history. In reality, candidates nearly always offer some sense of how their current structure works when they share what they are looking for. They don’t want to waste time if expectations aren’t aligned.