How Employers Use Labor Market Data for Compensation Planning

Every year, HR departments across America conduct compensation reviews. The goal: ensure their pay structures are competitive enough to attract and retain talent, but not so rich that they create budget pressure. The analytical framework is built around labor market data — and BLS data plays a significant role.

The Compensation Philosophy

Most organizations define a "target percentile" for their pay structure — they aim to pay at the 50th percentile, 75th percentile, or some other benchmark relative to the market. The choice reflects competitive strategy: a 75th-percentile employer pays above most competitors, reducing turnover but increasing payroll costs.

Where BLS Fits In

OEWS data is used for broad market context, especially for occupations where specialized private salary surveys are not available. For common occupations (administrative, operational), OEWS is often sufficient. For niche or highly competitive occupations (software engineers, data scientists), private salary surveys (Radford, Mercer, Willis Towers Watson) provide more granular and current data. The H-1B LCA data on this site provides a useful independent check on employer wage filings.

Use our wages section for OEWS benchmarks and employers section for H-1B LCA wage data.