Misconception #1: Salary Surveys are Precise

Salary surveys are accurate but not precise. Compensation data should always be viewed as directional guidance, not an exact science. (That’s why we say Comp is a blend of Art and Science). Think about it this way: If survey data were precise, best practices wouldn’t be using multiple sources to price a single job. The reality is that compensation data is shaped by company participation, methodology, and reporting lag—meaning what you see is an estimate of the market, not an absolute truth. Treat survey data as a tool, not a rule.

Misconception #2: Industry Matters

Industry breakouts are the 3rd most common used data cut for companies, according to CompTool’s salary benchmarking best practices survey, conducted in 2024. When creating market competitive pay ranges, industry matters, but not as much as you think. Most salary surveys will include industry breakouts, but before you start focusing there, consider how many of your employees were hired from the same industry. Many companies don’t hire exclusively within their own industry, and relying too heavily on industry-specific data limits your view of the labor market. If you hire (or lose) talent across multiple industries, why should your pay strategy stay aligned to just one? A broader approach—considering your real talent pool across industries—gives you a more realistic picture of what it takes to be competitive.

Misconception #3: We Should Target the Market Median

There are a number of studies conducted by organizations such as World at Work and Aon that suggest around 75% of companies target the 50th percentile of the market. However, the the 50th percentile of the market does not necessarily mean a competitive stance – in fact, half of companies will pay more than you – by definition. Though using a strategic market target is recommended, your team must also manage the internal ranges to ensure that your Organization can make strategic hires that may be above (or below) the market target.

Misconception #4: Salary Surveys are Expensive

While some salary surveys come with a hefty price tag, affordable and high-quality alternatives exist – if you know where to look and how to use it. Several survey providers offer modular options, allowing companies to buy only the data they need rather than paying for an entire suite. Additionally, tools like Squirrel can be exceptional supplements to your traditional salary survey data. The best strategy? Mix and match to build an affordable, comprehensive compensation dataset that your business can trust. A list of salary surveys ranging from the very affordable to the very expensive can be found on CompTool’s Recommended Salary Survey directory.

Misconception #5: Local Salary Survey Data Is More accurate than National Salary Surveys

While local data is valuable, it’s often less reliable due to smaller sample sizes and lack of data. When fewer companies report in a specific region, the data becomes more volatile—a few outliers can skew the results dramatically. Using national data with geographic differentials can often provide a more stable and realistic view of pay in a given location. Instead of relying solely on local data, smart compensation teams balance both national insights and regional adjustments. Of course, this will vary by job and region.

Misconception #6: Salaries and Wages Always Grow

OK – in very few instances do we actually see wages contract – but in the surveys, we have seen as much as 25% of jobs decrease in market value from one year to the next. Salary surveys are influenced by who participates, when they report, and economic conditions. As companies drop in and out of surveys, the numbers shift. Stability matters—surveys with consistent participants over time are the most reliable, but even they aren’t immune to change.