How to Use Benchmarking to Ensure Competitive Pay for Faculty
Benchmark (v.): Evaluate, check, or measure (something) against a standard.
One of the best strategies higher ed institutions can use to attract and retain talented, top-tier faculty is to offer competitive pay. And one of the best ways to ensure your institution is offering competitive pay is to benchmark that pay against other institutions.
Benchmarking faculty salaries is important for a number of reasons:
- Recruiting. When recruiting new faculty, you need to know what your peer institutions are paying for new talent. This allows you to offer competitive salaries that are attractive both to faculty looking for their first position and those looking for a more senior position.
- Retention. Higher ed institutions have to be concerned about losing talented faculty not only to another higher ed institution, but also to industry. Providing competitive salaries and raises is an important tool in maintaining faculty satisfaction with their current position.
- Maintaining or improving the reputation of your institution. Quality faculty are an important part of a higher ed institution’s reputation, and much of the institution’s resources are devoted to attracting and retaining quality faculty. You want to ensure that your faculty salaries align with the standards your institution follows in maintaining a competitive salary structure, particularly for disciplines your institution deems most important for sustaining or developing its reputation.
The key to benchmarking faculty salaries is to use a source that offers the salary data you need to make the comparisons you need. Reliable benchmarking lies at the heart of any strong compensation plan. When choosing a source for your benchmarking needs, attend to the relative importance of the following factors:
- A source that collects data by both rank and discipline is a must for most faculty benchmarking. Due to market factors and industry competition, the salary you’re paying a faculty member in economics will vary – sometimes significantly – from what you’re paying a faculty member in American studies. In addition, salaries for new assistant professors may differ significantly from those paid to full professors.
- Your source should use current data. Trying to estimate salary increases from years-old data means that you are missing important economic changes or market trends that may disparately affect different disciplines.
- Your source should allow for easy peer comparisons. It should be one in which your peer or aspirant institutions participate, and it should allow for specific comparison by state or region, Carnegie classification, and affiliation, at a minimum. Maximally, it should allow for any peer comparisons you desire.
- The source you use should have a solid reputation for research in higher ed. The source should have noted longevity in the field and demonstrated data reliability.
- Your source should maintain institutional anonymity. Sources that report institution names along with salaries may be biased toward reporting higher salaries. In other words, if an institution pays lower salaries or has offered comparatively lower raises in the past year, it may be less likely to report data knowing that its reputation may be affected. A data source that maintains anonymity is likely to have more representative data.
- You may need a source that provides more than basic salary comparisons. If your institution wants to remain competitive in its diversity, equity and inclusion efforts, it’s important to use a source that collects and reports on salary information using key demographic variables like race/ethnicity, gender, age, and years of service.