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How to avoid 3 common salary study mistakes in higher ed

March 11, 2024, By Natalie Ken, Research Analyst

Have you wondered how your institution determines your salary? As employees, we often have little insight into the process and decisions behind our pay. In contrast, HR teams invest a lot of time and energy conducting in-depth salary studies. These are crucial for determining what an appropriate salary is for different roles across campus, assessing how competitive an institution is relative to other employers, and deciding whether to adjust pay ranges or individual salaries.

  • Salary study:

    The process and analysis by which an organization compares what they pay for jobs against what other employers pay for similar jobs and in the same labor market(s).

Salary studies are tricky, though. Seemingly minor methodological details or underlying assumptions about talent competition can easily skew the results. In fact, EAB found that staff salary studies in higher ed often overestimate how competitive an institution’s current pay is relative to the market. This can lead to insufficient or misinformed salary investments, thereby wasting limited resources and reducing an institution’s ability to compete for top talent.

To help campus and HR leaders get the most out of the salary study process, EAB has identified three common salary study mistakes and how to avoid them.

1. Conducting salary studies too infrequently

Salary studies are time-consuming and can be expensive. As a result, many colleges and universities complete a comprehensive salary study every five or even 10 years. But unfortunately, today’s labor market changes a lot faster than that, and salary study data becomes outdated quite quickly. HR teams that wait five or more years to conduct a staff salary study run the risk of falling farther behind the market at a faster rate―perhaps without even realizing it!

  • EAB solution:

    Instead, institutions should strive to conduct a salary study every two or three years. This will ensure that leaders have a more frequent and accurate picture of the institution’s current salary competitiveness, which will then allow them to nimbly adapt staff salaries to stay market-credible.

2. Relying on outdated job descriptions

When conducting a salary study, HR leaders match their job descriptions to similar job descriptions at other organizations. Then, they compare what their institution pays for a job relative to what the other organizations pay.

An accurate salary study therefore hinges on accurate job descriptions. That is a problem for many colleges and universities because higher ed job descriptions tend to be vague and often do not fully reflect a role’s core duties and skills. As a result, salary studies may unintentionally compare dissimilar jobs, which can result in inaccurate results and salary benchmarks.

  • EAB solution:

    To avoid this, leadership teams should require managers to regularly update job descriptions, at least annually. Immediately before conducting a staff salary study, HR should also double-check that every job description they intend to use for job matching is indeed up-to-date and sufficiently detailed.

3. Only using higher ed-specific data

Colleges and universities are increasingly competing with out-of-sector employers for top staff talent. Yet, most institutions’ salary studies only draw on data from higher ed peers and fail to include relevant industry data. This can skew the study findings, since higher ed tends to pay staff less than out-of-sector competitors. As a result, leaders might conclude that their staff pay is better aligned with the market than it actually is.

  • EAB solution:

    To get more accurate results, HR and leadership teams need to ensure that the data sources used in staff salary studies reflect the diversity of their new competitive set(s) for staff talent. For example, if 40% of competitors for a particular role are non-profits outside of higher ed and 30% are in the private sector, HR should consider and appropriately weigh salary data from these types of organizations in the study.

Natalie Ken

Research Analyst

Read Bio

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