Many of my clients are aviation managers from large corporations. Most of these corporations use a standard calendar year as their fiscal year. As the last few months of the year roll around, these managers complete their personnel reviews for the present year and finalize their budgets for the next. As a former aviation manager, I remember this time well. It always seemed like we were working one of these processes and sometimes both until the deadline. It was a hectic time of year.
The personnel review process certainly includes an evaluation of employee performance, but it also includes an assessment of current-year compensation levels and a plan for increases in the coming fiscal/calendar year. Increases that can be based on inflation, merit, the labor market, or any combination thereof.
Compensation increases feed directly into the department’s budgetary process. The labor portion of the budget requires an accurate estimation of labor costs in the coming fiscal year, and compensation levels are the most significant component of those costs.
Successfully navigating the compensation equation for both the personnel review and budgetary processes requires a critical element: data. When collected accurately, analyzed objectively, and handled honestly, data are indisputable. And where compensation data for business aviation professionals are concerned, there are only three survey sources that offer the proper combination of statistical rigor and granularity required:
- The National Business Aviation Association (NBAA) Compensation Survey,
- The Gallagher Aviation Compensation Survey, and
- The IBM Flight Operations Compensation Survey.
While I know I’ve discussed survey data in a previous article, this is a different take on that subject because I hear a lot about “survey data” from aviation managers, compensation professionals, and line employees in the industry and I feel the need to set the record straight.
First of all, if you see compensation data in an aviation magazine or read it on an aviation website, odds are very high that data are more anecdotal than empirical and haven’t been scientifically collected, analyzed or reported. Furthermore, these unscientific surveys typically collect their data from people who have a stake in the results which injects bias into the dataset. The data aren’t consistent or accurate. So, if you want to be taken seriously, either as an aviation director negotiating with HR or as a professional talking to your chief pilot or manager, don’t use this kind of data as documentation. You’ll be laughed out of the office.
Secondly, I’ve encountered HR professionals who are using survey data from providers who don’t specialize in aviation compensation, but instead group aviation personnel in with other corporate functions. While these datasets may be collected and administered by compensation experts, they don’t have the granularity required to generate precisely tailored compensation ranges. These surveys typically don’t parse variances in aircraft class, nuances in positions, and the regional cost-of-labor differences for aviation personnel in discrete locations around the country. While the data provided by generalized surveys might be useful to examine economic trends or provide a sanity check from an overall perspective, it is not appropriate for use in business-aviation compensation analysis.
Finally, there are the job websites (e.g., Glassdoor) and the “compensation” websites (e.g., Salary.com) that purport to provide compensation data applicable to various positions like “corporate pilot.” Like the data found on aviation websites and in aviation magazines, the data are anecdotal, not empirical and are biased due to the high percentage of self-reported datapoints. Additionally, it is generalized to the point of uselessness. These websites combine the worst aspects of the two data sources presented above.
So, if we’re going to focus on data, real data, what’s an aviation manager or professional to do? The answer is simple. Rely on the “Big Three” or at least the “Big Two.” See the table below.
|Number of Participating Organizations
|Number of Incumbents
|Average Personnel Per Organization
The NBAA Compensation Survey has the largest number of organizations and is the most diverse of the three. It’s the survey that catches all the “cats and dogs,” everything from mom-and-pop charter companies to high-net-worth individuals. Since 2019, this survey has been administered by BDO (www.bdo.com) and the personnel collecting and analyzing the data are compensation-statistics specialists. While NBAA compensation data were largely self-reported prior to 2019, since BDO took the helm, most of the data are direct reported. (Full disclosure – I oversee the NBAA Compensation Survey, so I might be a bit biased…)
The Gallagher Survey was formerly the Stanton Survey is more skewed towards larger, corporate operators. In addition to corporations, its dataset has contained fractional operators and larger 14 CFR Part 135 operators. This survey is probably the easiest to use and navigate. Also, due to the robust size of its database, it often offers a depth that the other two surveys don’t often match.
The combined power of these two surveys provides a complete depiction of the business-aviation compensation market down to a very granular level. Both are required for thorough analysis and not coincidently, both are included in the standard version of the AirComp Calculator.
But there’s a third survey that is powerful in its own right – the IBM Flight Operations Compensation Survey, administered by Pearl Meyer. The IBM Survey has its roots in the IBM flight department, when years ago, the Director of Aviation and Chief Pilot wanted a compensation survey that focused on like companies, i.e. larger, publicly-owned companies with bigger flight departments. Of the three, the IBM survey provides the best look at all types of compensation paid to flight department members, but it is limited to companies that are approved to participate and it is the most expensive of the three. Thanks to a non-disclosure agreement signed with Pearl Meyer, there is a version of the AirComp Calculator that includes IBM data.
Having valid data to present is only part of the equation though. You also need to select the right numbers from those data sources and be prepared to defend your choices. HR personnel often get focused on benchmarking, and they select numbers from companies from similar industries, or which have similar gross revenue. They don’t consider that aviation personnel can perform the same functions in widely different industries and for a broad range of company sizes. Hence, the benchmarking process is useless at best. At its worst, it may artificially limit compensation levels and impair personnel retention efforts.
In our next article, we’ll consider what datapoints truly correlate to higher compensation levels and which don’t. The answers may shock you.
Until then, Broyler out.