Salary benchmarking: selecting peer organizations for comparison

Authored by Jada Kent, CCP

Consider the supply and demand differences between an administrative assistant and a police chief. Jobs that have a lot of overlapping skills will be in greater supply while positions that require specialized training or skills will be in greater demand. The administrative assistant position can exist in nearly every organization regardless of industry, size or geography while the police chief position only exists once per municipality. As a public sector organization, to ensure you can attract and retain quality employees, which are essential to providing necessary services to the community – you will have to compete across many different types of supply/demand labor pools for those employees. Here’s a list of considerations commonly used to help identify and differentiate appropriate peers for comparison.

Industry

Public sector

As a public sector organization, it’s expected that most of your peers are other public sector organizations. The purpose for existing for most public sector entities is to serve the community at-large. This means many jobs within your organization only exist within other public sector entities. Public safety is an example. There is not a firefighter equivalent in the private sector.

Private sector

There might be just as many jobs in your organization with a private sector company equivalent. Most of these are business function positions, such as finance, human resources, administration, etc. For these jobs, it will be important to perform a private sector comparison. However, in conducting an external market study, it’s uncommon that private sector organizations are willing to publish compensation information. Alternatively, you can supplement market data with published salary survey information to serve as a private sector representative.

Published data

There are many published salary surveys available for free online or for purchase. At Baker Tilly, when conducting a market survey for our clients, we regularly include salary information from the Economic Research Institute, Bureau of Labor Statistics, American Public Power Association, American Water Works Association and more – as necessary.

Services offered

The services you provide are driven by the needs and wants of your community, which may be common or uncommon even among neighboring communities. For example, in a frequent tourist destination city, it might be necessary to have a robust marketing department or even a convention center. The less visited neighboring cities, alternatively, may not need to have these amenities and offerings. Therefore, a comparison to other tourist cities may be necessary (even if they are not nearby).