Compensation data privacy in the post-survey era with Novo Insights

Compensation teams have relied on market surveys for decades, but the cracks in that system are becoming impossible to ignore. 

As Paul Reiman from Novo Insights points out, the traditional methods are no longer keeping up with the pace of change in today’s labor market. Now, more than ever, organizations need real-time, accurate data to stay competitive. 

During Compa’s latest webinar, Reiman, joined by privacy expert Joe Malandruccolo and Charlie Franklin, discussed how the compensation field is transitioning from surveys to software-driven data, and why this shift is crucial for performance and compliance alike. 

The discussion centered on key themes: understanding the limitations of legacy compensation surveys, the advantages of real-time data in cloud environments, and the critical need to balance data security with compliance. 

Here’s a recap of the most valuable takeaways, and watch the recording here.

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Why legacy surveys are no longer enough

Paul outlined how comp data has evolved: “The ability for organizations to process data is just different than it ever was before”. He continued by emphasizing that the legacy approach — where compensation surveys were managed by third parties and took months to complete — no longer works in a fast-moving labor market. 

The Federal Trade Commission (FTC) has also weighed in, with Paul explaining that the FTC no longer relies on the original compensation survey rules. 

In today’s world, old data is increasingly unhelpful. Comp professionals need more current, actionable insights, something surveys can’t reliably provide. Charlie added that survey data not only arrives late, but it’s also often too broad: 

“The issue isn’t just that the data is old — it’s that it’s often aggregated in a way that doesn’t reflect what’s happening in your specific market”. 

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Privacy concerns with legacy practices

Another growing problem with comp surveys is data privacy. Legacy practices were designed for a pre-cloud world, where data privacy and compliance weren’t as critical. 

Paul noted that relying on outdated data-sharing guidelines, while once acceptable, is now risky: 

“There’s been a number of speeches and published statements from the FTC which say that they believe we can no longer rely upon these rules.”

With modern regulations like GDPR in effect, companies must now ensure that their compensation data-sharing practices comply with stricter privacy standards. Joe explained how cloud-based systems offer better security compared to traditional survey methods: 

“The fear comes from not knowing how the data is being handled once it leaves your company”, he said. Unlike the old model, where spreadsheets and emails introduced multiple points of failure, cloud platforms provide encrypted, automated processes that ensure sensitive comp data is protected from start to finish. 

Joe even shared a personal story of how he accidentally sent sensitive data to the wrong recipient early in his career:

“The environment is not a safe one”, he said, pointing out how manual processes often increase the risk of human error. With modern tools, those risks are reduced by using secure systems that prevent unauthorized access and protect data at every step. 

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Real-time data without reliance on algorithms

Charlie wanted to highlight the advantages of using real-time data, especially when it’s drawn from actual job offers rather than relying on algorithms that may not reflect the current market.

“When you use real-time compensation data, especially from job offers, you get a clear picture of the market without needing to rely on black-box algorithms”. 

Algorithms can simplify data, but they also limit flexibility and may not adapt quickly enough to changing conditions. Paul agreed that while algorithms can be useful, they are often too rigid. “It’s great when you have reliable real-time data that isn’t pre-filtered by too many layers of modeling”, he said. 

This kind of insight allows compensation teams to make better, faster decisions and adjust strategies based on what’s happening in the market today — not six months ago. 

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Getting legal and privacy teams on board

One of the biggest hurdles companies face when transitioning to modern comp tools is getting approval from legal and privacy teams. Joe explained that this can be a roadblock for many organizations, but that transparency and early involvement are key. 

He went on to highlight that legal teams need to “understand how this data is being used and stored” before they can sign off on anything. Once legal teams see the robust security features of modern platforms, including encryption and audit trails, they are usually much more comfortable with the transition. 

Our speakers agreed that shifting to real-time platforms should be framed as a risk-reduction strategy. 

“You’re ensuring that your company’s most sensitive data is handled securely and that you’re in full compliance with privacy regulations”, Paul said. By presenting this transition as a way to mitigate risk and ensure compliance, comp teams can more easily get buy-in from legal partners. 

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Is this the right time to “move forward”?

As the discussion wrapped up, Charlie made a strong case for why companies should adopt real-time compensation data sooner rather than later. 

“Companies that are still relying on outdated surveys are going to fall behind. The market is moving too fast, and compensation strategies need to keep up”. 

Paul added that real-time data enables companies to be more agile and responsive: “The speed at which you can access and act on data is going to be the differentiator in how competitive your comp strategy is”. 

One of Joe’s final remarks highlighted the importance of embracing this new approach. He said that organizations can’t afford to be stuck using outdated methods and that it’s “time to move forward”. 

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If you missed the full conversation, you can watch the recording here. 

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