Salary analysis – How large a salary would cause an employee to stay at the same company?

Compensation and benefits

A salary is still the best source of motivation for work and is closely related to the value of a position on the labor market. HR professionals are well aware that some of these positions are filled quickly because there are more opportunities to choose from, but it is harder with other positions as it’s not easy to find qualified applicants with the necessary skills, specialization, and education in labor market or in a certain region.

A salary reflects the length of experience, region where the position is located, level of education and personal abilities, skills and potential. Therefore, a salary is a reward for effort and employee job performance, as well as for their knowledge and know-how – the added value that an employee brings to a company. It should be a mutually beneficial exchange.


Every manager knows that personnel costs are the highest monthly expenditures for a company. Every personnel change has its cost, no matter whether it’s an old member of the team who is leaving or a new one arriving. Underestimating the regular salary has an impact on business, company operations, overall job satisfaction and furthermore, fluctuation. The employees whose salaries aren’t regularly reviewed typically are not very satisfied with their jobs.

How large a salary would keep your employee at your company?

When making decisions, salary managers can use analyses that reflecting the current price of labor on the market. It’s not just about the average salary for the position. Usually, HR professionals are more interested in the so-called median salary, which denotes how much money half of the people performing the same position are earning in a given region. We’ve chosen as an example the Systems Engineer position (Information Technology) in Slovenia.


Also, what are the top salaries for a given job – that is, how much the top tenth of highest-earning employees are making (9th decile). In addition, the minimum salary is how much the lowest ten percent of the least-earning employees in the same position are making (1st decile).


The analysis also offers a salary range, where the proportional division of workers into wage levels can be nicely interpreted. The graph reflects how a large salary range is determined for a share of employees occupying a given job position.

salary-range_ tha_span-of-the-salary

For decision makers, it is good to know about motivational rewards (13th salary, benefits), how many employees are getting financial or non-financial benefits, and the average amount of these benefits. These aspects need to be considered in order to set the right amount for an employee. This amount must also be the most effective option for the employer.


Paylab conducted a small experiment. At the biggest job fair in Slovakia – Profesia Days 2017 in Bratislava – people from Paylab wanted to test whether managers had a nose for salaries. For a tasty dessert with coffee and joining the competition for dinner for 2 in a fine restaurant, employers could estimate the average salary for four positions in various regions of Slovakia: a sanitation worker in Bratislava, a saleswoman in the Trenčín region, a senior accountant in the Trnava region and a senior IT analyst in Košice. Around 200 managers were involved in the survey. They guessed slightly lower salaries for the sanitation worker, saleswomen and senior IT positions, but the biggest dissonance was for the position of senior accountant, where they guessed a salary that was one fifth higher than the actual salary. A “tailored” salary analysis can help to reduce this discrepancy.


Why is it important to invest in salary analysis?

  • The topic of salary is very relevant among managers because the increased costs for the recruitment process and a lack of skilled labor power in the labor market are forcing them to raise salaries.
  • 2017 is strategic for reviewing the salaries of employees in almost all sectors in Central and Eastern Europe.
  • The employer can gain better insight into accurate regional salaries for the last 12 months.
  • Salary analysis is the basis for better planning labor costs, recruitment processes, foreseeing development and reviewing staff salaries.
  • An overview of salaries among competitors.
  • Providing an informational advantage when negotiating a salary with a potential applicant.
  • Provides an overview of how financial and non-financial benefits are relevant for a certain position on the market.


Why should you order a financial analysis from Paylab?

  • Experience in collecting data since 2007 – we have collected more than 455,000 wage questionnaires per year, data for over 500 job positions + historical data that can be compared over time.
  • Proven methodology that was exported to the global product – an international platform for comparing salaries – and to over 14 other local salary portals.
  • Ability to compare salaries for job positions up to the Central European regional level (Poland, Czech Republic, Hungary, Slovenia, Croatia, Serbia, Montenegro, Bosnia and Herzegovina, Estonia, Latvia, Lithuania, Finland).
  • Up-to-date data for the last 12 months.
  • Data can be processed based on the following criteria: age, sex, length of experience, region, industry, education, company size, company ownership and level of positions.
  • Data are available as basic salary + variable salary components, mean, median, 1st decile, 1st quartile, median, 3rd quartile, 9th decile.


Communication and Market Research Specialist with focus on Compensation & Benefits