Our clients often clamor for salary survey information when they are seeking to fill a position. While salary surveys can be helpful indicators, they are becoming increasingly misleading if you rely on them too much to devise compensation packages. That's because the emphasis on specialization in many firms means that this isn't your father's AEC industry, and making meaningful salary comparisons from one firm to another is more difficult than it used to be.

The ways firms are compared in most salary surveys-number of employees and location-give an incomplete picture of the compensation landscape. What is just as important, or maybe more important to consider are firms' types of clients and business strategies. After all, a firm that courts low-income housing clients, for example, has a much different set of business circumstances than one that serves high-end retail clients. Even if these two firms had the same number of employees and were located in the same city, comparing the salaries of the two would not yield an apples-to-apples comparison.

"What you should really be concerned with is what your direct competitors are paying," says Kathryn Sprankle, president of Sprankle Leadership, a San Francisco consulting firm, and an experienced AEC industry executive recruiter. The way salary surveys are conducted today makes it difficult to do that, she says. "Reporting on size is becoming less relevant with more specialization. It's not that you should completely discount salary surveys, but you may not get a reliable sample with which to compare."

Compensation is more than salary To make matters more complicated, compensation encompasses much more than base salary. There are bonuses and profit-sharing plans to consider, and these packages can vary greatly from firm to firm; bonus amounts can also vary significantly from year to year within the same firm. Some firms emphasize incentives more than others, and salary surveys don't reflect all of the nuances of these plans.

There are ways to get more detailed information on your competitors' compensation packages. Sprankle recommends that firms form local roundtables to share this type of information. While some compensation information is highly sensitive, such as specific salary numbers or profit margins and should not be freely shared with competitors, other data can be fair game. For example, how bonus plans are designed, medical insurance options, the percent of profit earmarked for bonuses, and the percentage of base salary to total compensation are the types of benchmarks that can be shared without divulging the most sensitive financial aspects of your firm. By sharing this information, it's likely that roundtable members will learn some about new compensation strategies that they can apply themselves.

Another source of good compensation data can be tapped through job candidates, Sprankle says. When you interview prospective employees, ask them about their salaries and compensation packages. Keep a database with that information as a guide to the local labor market.

Align compensation with your strategic plan
Compensation packages should reflect your firm's strategic plan and operating philosophy. For instance, how much of compensation should be in the forms of profit sharing and performance bonuses should be based on the type of culture you want to foster and how much and how fast you want your firm to grow. These basic attributes vary from firm to firm, and even within firms over time, so any significant changes in strategic course ought to include consideration about whether and how compensation packages should be adjusted.

I should note here that some recruits who are not accustomed to incentive-laden compensation packages sometimes balk when presented with one. If your firm makes a pitch to such a candidate, you may have to work hard to sell him or her on the concept. One way to do that is to have the candidate speak with his or her peers in the firm to explain how the bonuses have impacted them. Ideally, such frank discussions will allay the candidate's concerns. Or, they may make the candidate realize that your firm won't be a good fit. That's not necessarily a bad outcome either, because a recruit who is uncomfortable with the compensation package is likely to be uneasy about the firm's culture and vision.

Creative compensation packages can close the sale
Many firms are getting more creative about non-monetary types of benefits that can entice some candidates. For instance, a firm that specializes in non-profit and government work may not be able to match the salaries of firms that court high-flying private sector clients. But such a firm may be able to offer other enticements such as more flexible hours, generous vacation plans, sabbaticals for longtime staffers, or telecommuting options.

One thing that workers in many industries including ours are prizing even more than salary these days is more balance between work and private life. Though this is especially true for parents of young children, it holds up across the board. So these non-financial incentives can really make a difference.

All in all, devising a competitive compensation package takes a lot more thought than figuring out the average salary from a few salary surveys. Make sure you consider all elements that impact compensation and devise packages most appropriate for the types of professionals you want to hire.