Are Salary Surveys Inflated?

Are Salary Surveys Inflated?

Are Salary Surveys Inflated?

The short answer is…we’re not sure. Salary surveys for many professions can be found on the internet with a quick keyword search. It appears that the goals of these surveys are to entice job seekers to utilize the company’s or website’s services. While we can’t accurately speak to the salaries of other professions, we can address the highly specialized Actuarial profession and its salaries.

And, more specifically, we can provide insight into how the DW Simpson Salary Survey is constructed, and how inflation is not a factor. The data DW Simpson uses for our salary survey comes from actual placements – in other words, this is real-time data reflecting both the current compensation levels and new offers extended to every candidate with whom we are working and/or with whom we periodically are touching base. While we are confident our salary survey is an accurate representation of current compensation within the Actuarial field, it is important to note a few things.

First of all, our survey represents 80% of Actuaries’ compensation, with the top and bottom 10% of cells being excluded from the spectrum. The reason for this is because there is a high level of variance in the top and bottom 10th percentiles, which would make the salary ranges too broad. Total compensation packages in the top and bottom 10% cells can vary greatly.

According to KC Cho, 1st Vice President and Partner of DW Simpson, “When we first put out the salary survey more than a dozen years ago, the first few calls I got were from Actuaries who were on the lower end of the ranges. But after a few conversations with Actuaries, who told me that they were well above our ranges and don’t even bother referring to our survey anymore, I realized we must be doing it right.”

To be more specific, the data points in the DW Simpson Salary Survey come from a combination of base salary and annual bonus as these are consistently the most stable components of one’s annual compensation. Of course, there are many other financial components [401(k)’s, stock options, long-term incentives, etc.]; however, these, too, can vary greatly and it’s not possible (nor would it be accurate) to include them all in a concise survey. Further, the DW Simpson Salary Survey is all encompassing in that it does not take into account insurance versus consulting, or New York City versus, say, the rural Southeast. Importantly, salaries tend to be flatter within the Actuarial profession and are not greatly affected by geography, due to the high demand for Actuarial talent nationwide. For example, a consultant in Charlotte would not expect his or her compensation to be fully adjusted according to the variance in cost of living if he or she were to transfer to NYC, or vice versa. Quite simply, the nation’s current supply and demand for talent dictates compensation level – not specific cost of living indices. For example, if it costs 30% less to live in Charlotte versus NYC, you can expect an increase when moving to NYC, but not a 30% increase solely to reflect the cost of living.

Lastly, one might wonder why DW Simpson produces a salary survey. This is simple: DW Simpson is seen as the foremost Actuarial and Analytics recruitment firm worldwide. Given this, we are both a benchmark and a resource to the Actuarial industry. We are able to share with our clients and candidates precise and trusted data. Because DW Simpson has been compiling and updating our salary survey for more than 12 years, we have the most data points which come directly from those working in the profession. We help clients understand what it takes to retain top talent and we help candidates understand their value in the marketplace.

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