“Pay doesn’t change that much from year to year, right?” This past thinking was common among some employers and has led them to age salary survey data. Aging salary data is the practice of adjusting salary information from previous years' surveys and using it to reflect the current market conditions. Employers using this approach would take the annual salary increase projections found in reports such as Mercer’s Compensation Planning Survey and increase salary survey data from the prior year using the reported annual increase projections. The issue? Typically, only one number is applied across all job families leaving a lot of room for inaccurate adjustments.

The job market and workforce projections for the past couple of years have been all over the place. Not only are innovations like AI disrupting the job market, but more and more companies are looking to move towards skills-based job architecture to enable more agile and efficient staffing. With today’s labour market and work force challenges, using aged data rather than participating and purchasing new salary surveys would be a mistake. Why, you might ask? Here are 4 reasons why you shouldn’t age your salary survey data.

1. Masking true increases in pay

Employers are in a “resetting” mindset, and if they are doing so with outdated salary data then it may not reflect the current market conditions or changes in job responsibilities. In recent years, many employers have been operating outside of their compensation strategy, offering premium pay to new hires and out-of-cycle retention increases to employees. Now, as the labour market stabilizes, organizations are shifting back to a proactive rather than reactive approach. Salary data that has been aged may not reflect important factors like the demand for certain skills or the impact of inflation, giving you a misleading idea of current salary trends.

Also worth noting is that over the past couple of years, we have seen annual increase budgets contract. We expect 2025 to be even lower, and for the increase budget to be spent even more strategically to retain key talent. Only by purchasing fresh salary surveys will you be able to understand which jobs are receiving increases above or below the national average and enable you to make more accurate and informed decisions. Don’t rely on your aged survey data. Budget for and plan to purchase fresh salary surveys as you head into this compensation planning season.

2. Missing new emerging “hot” jobs

With the constant shift in how business is done — how retailers sell products, how doctors see patients, how services are offered to customers — jobs that we’ve thought of as hot in the past will be replaced with new jobs. The increase in importance of digitization and technology, regardless of the industry, will mean that a portion of a company’s salary budget will be allocated for particular IT jobs, but not all IT jobs across the board. What other jobs will be seen as critical to thriving businesses in 2025 and beyond? How will managers allocate limited budgets? Which jobs will be in high demand? Up to date salary surveys are the key to understanding where you need to focus to both retain existing talent and attract the new talent your organization needs. If your organization is using aged survey data, its likely to miss out on emerging hot jobs and skills, in turn missing out on top talent.

3. Misaligning short-term incentives with business goals

More and more employers are adjusting their compensation strategy and pay mix, putting more emphasis on short-term incentives to reward performance. If incentive targets are set with aged data, you run the risk of setting unrealistic targets that could affect employee performance and moral. You could also set incentive targets that are not aligned with current business goals. Using aged survey data will not capture changes in business priorities, resulting in incentive goals that do not support desired business objectives.

To set target incentive levels appropriately, you’ve got to understand the total cash compensation level (base pay + short-term incentive target) and how that aligns with your compensation strategy. Fresh, and up-to-date salary surveys will provide you with the details to modify your company’s strategy and pay mix.

4. Getting the most out of your budget

By participating in and purchasing new salary surveys annually, you’ll not only lock in a reduced rate for the publication, but you’ll ensure you’re paying employees appropriately — and not overpaying. It’s important to understand how to use your salary budget and your annual increase budget in the right places. Beyond that, do you have a limited budget for purchasing salary surveys this year? Most companies do. Make sure you work with the best data and customer service provider. With dependable data covering a wide range of industries and jobs delivered via Mercer WIN®, Mercer’s salary surveys can’t be beat. Further, our customer service is unparalleled. Need help participating in a survey? We’re here for you. Not sure what data to pull to assess your market competitiveness? Our team is happy to provide you with guidance.

Hopefully, you’re convinced — the labour market is just too complex to skip purchasing salary surveys annually. To understand the nuances of this labour market, and get the best value for your survey budget, participating in and purchasing surveys every year is a must.

Wondering which surveys will be best for you? Give us a call 855-286-5302 or email surveys@mercer.com.