When we assist clients in analyzing their market position and creating or updating their salary structures, one of the first questions we ask is “Do you have a well-articulated compensation philosophy?” If the answer is no, we recommend developing one as a first step, since your philosophy will dictate how to conduct your market analysis.
Now, if you already have a compensation philosophy, it probably contains a statement about your desired market position; usually, the 50th percentile of “the market.” But your market percentile is only half of the equation.
There are multiple markets
Within the international development sector, there are multiple actors. Non-profit NGOs play a key role, but commercial development contractors, bilateral development cooperation offices and of course, donors play a big role as well. And within any given country, there are a lot of different organizations working in a variety of programme areas. Don’t overlook private sector companies – you’re competing with them, too.
How can you decide the right comparator group for your organization?
Considerations for selecting comparators
It can be a challenge to select the right comparators for a market analysis, but it is one of the most critical steps to follow. Your compensation philosophy should provide the necessary guidance. Here are some questions to consider:
- Is your compensation program job-based or person-based?
- Are you a project-based or career-based organization?
- From where do you recruit your best talent?
- To which organizations do you lose talent?
- Are you competing with the same organizations for all staff, or are there differences by employee category (e.g., manual support, specialized support, professionals, and leaders)?
- If your organization is global, is there a core group of organizations with whom you compete in substantially all your markets?
- Are there key organizations with similar missions or areas of focus to yours?
- What about organizations outside your sector, such as donors or private sector companies?
- Remember consistency from year to year is also important. Sustaining Partners and Sustaining Contributors are the most likely employers to consistently appear in our surveys over many consecutive years.
Does it really matter so much?
In a word, yes. The NGO Local Pay survey conducted by Birches Group has grown dramatically over the past few years. The chart below shows the total number of surveys conducted and the number of large surveys. Thirty-two percent (32%) of all surveys are over 30 participants.