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The Risks of “Free” Salary Data

In today’s world, we have the ability to access nearly limitless data. With the click of an internet browser search button, we can gather information on almost any subject imaginable, instantaneously and for free.  This freedom of shared information however is not without its faults, as not all data is to be trusted and relied upon. In the era of “fake news”, it has become  increasingly challenging to determine what is “truth” and what you should rely on when making decisions.

This concept of boundless data can also be applied to the world of compensation – specifically salary data.  When looking to price your jobs in the market, we all know there are dozens of resources at your disposal from which pay data can be obtained.  Websites like PayScale,, Glassdoor, and LinkedIn all have pay information available on hundreds of job titles. The Bureau of Labor Statistics also provides salary information, not to mention the numerous survey providers that collect and sell all sorts of pay data measuring a wide variety of compensable factors, such as geographic location, years of experience, and degree level.

With so much potential salary data available at our fingertips, the question then becomes this: where should you be looking to get data for your jobs?

Why not use free salary data?

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Yes, you can type a job title into any search engine and see some sort of salary range for the position instantaneously. For example, you could do a quick search for an Accountant title right now and come up with numerous websites with their take on what this job is worth in the market, all for free.

But should you use this data?

In this case, the old adage of “you get what you pay for” often rings true, and you should be cautious before acting on any free pay data and consider the potential implications it can have on your organization.  

Here’s why using free data can be risky:

1. Lack of validation

Purveyors of free data may have some pricing figures on the jobs you are looking for, but how did they get this data? Websites that provide data may ask you to tell them how much you make. They collect this data directly from individual employees and then feed an aggregate of that information back to you, the consumer, in the form of “free” data.

While this in and of itself is not a necessarily a bad process for collecting and sharing data, the risks exist in the possibility that this data has not been properly validated. The information collected might be over or under reported, or be based on just a few collected profiles. The lack of quality control presents concerns that the data you are looking at may not be a true reflection of the job you are evaluating.

2. Missing context

Because of how this data is potentially collected, it is also likely the results fail to take into consideration factors specific to your compensation strategy.

With free data, there often isn’t much context regarding who is included in the dataset. It’s possible this data represents a nationwide average or it was collected from organizations much smaller or larger than your own. When you already have to consider so many variables to determine the right pay for your workforce, can you risk relying on data that doesn’t reflect your desired approach to compensation?

Every organization decides to how to compensate their jobs based on things like organization’s values, the type of candidates you want to hire, who you compete with for talent, your company stage, size, industry and what you need and can afford. To accomplish these things, it will take much more than just a broad strokes approach to compensation data.

3. Outdated data

While traditional survey data relies on regular and consistent participation to ensure market data is up-to-date, free data sources may not follow the same process. Because there is often a reliance on incumbents to report accurate data, match to correct job, and participate every year, if the source of free data is not collecting time-relevant information, the resulting data could be outdated and present an inaccurate reflection of what you need to pay for the job at this time.  

This is of particular concern when considering hot jobs or positions in fast moving markets, or whenever you need to keep a pulse on the current value of a job to attract and retain talent.

Not all data is equal

At the end of the day, you are looking for the most appropriate set of market data that allows you to attract and retain the talent needed to make your organization successful. Considering the tight labor market seen across many industries, being able to find and keep talent can potentially make or break your business.

When you create a compensation plan, it is imperative you understand the areas crucial to your business and prioritize your payroll dollars against these areas. This of course is only possible when you can rely on the data driving your pay decisions. For this reason, it is vital you think twice before putting all of your eggs into the “free data” basket.  

Need more information on the various validated data sources available in the market? Check out our webinar recording Selecting the Right Compensation Data Sources For Your Business.  

Banner photo by Don Agnello on Unsplash

Jesse Haydon
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