In the 25R3 release, we have introduced new KPIs for the HCM – Workforce Rewards – Salary Basis subject area, providing details on median salaries in both transaction and warehouse currencies - Median Annual Salary, Median Salary Amount, Median Annualized Salary (FTE).

What conclusions can be drawn from the median salary data?

The median is used to better understand salary distribution across various attributes. Unlike the average salary, which can be skewed by extreme values (example: a manager’s team of 100 direct reports, where one worker earns 25L and others earn between 5L and 8L), the median offers a more accurate representation of salary trends, helping to determine whether the team is paid higher or lower overall.

The visualization presented below highlights the following (left to right)

1. The average salary takes all salaries into account, which means it can be influenced by outliers, such as extremely high or low salaries. If a few workers in a department earn significantly more, the average salary may appear higher than the median, providing a misleading view of the pay for most workers.
2. By analysing the median salary trend, patterns such as whether the median salary is increasing, decreasing, or remaining stable can be identified. It provides insights into how overall compensation is evolving, without being influenced by outliers
3. Comparing the median and average salary provides a clearer view of pay within a group. The median reflects the typical salary, showing what most workers under the managers earn, while the average offers an overall compensation picture, though it can be influenced by outliers. By considering both, one can determine whether most manager teams have similar pay or if a few high or low salaries are impacting the overall pay distribution.
4. The median annual salary across different job roles shows how typical pay has shifted over time. By looking at this change, we can see which job roles have seen salary increases, which have remained stable, and which may have experienced decreases.