{"id":1332,"date":"2024-03-28T11:18:27","date_gmt":"2024-03-28T11:18:27","guid":{"rendered":"https:\/\/www.brightmine.com\/us\/?post_type=resources&p=1332"},"modified":"2025-04-11T15:43:11","modified_gmt":"2025-04-11T15:43:11","slug":"how-to-conduct-salary-benchmarking","status":"publish","type":"resources","link":"https:\/\/www.brightmine.com\/us\/resources\/total-rewards\/benchmarking\/how-to-conduct-salary-benchmarking\/","title":{"rendered":"A quick guide to salary benchmarking exercises"},"content":{"rendered":"\n
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A quick guide to salary benchmarking exercises<\/h1>\n\n\n\n

Salary benchmarking exercises help ensure fair and competitive pay for all employees. Review the key steps involved in running a successful salary benchmarking exercise.<\/p>\n<\/div>\n<\/div>\n\n\n\n

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Published: April 3, 2024 | by Sheila Attwood<\/strong>, Senior Content Manager, Data and HR Insights at Brightmine<\/p>\n\n\n\n

In a competitive job market, attracting and retaining top talent is crucial. One key aspect of this undertaking is ensuring the organization offers fair and competitive compensation to all employees. And a proven, data-driven way to do this is by leveraging internal and external data to run a salary benchmarking exercise.<\/p>\n\n\n\n

A salary benchmarking exercise can help an organization understand its positioning in the market, analyse internal equity, respond to changes in the economy, and much more. Most importantly, it can help organizations build a strategy to remain competitive.<\/p>\n\n\n\n

However, not all benchmarking exercises are equal. To be effective, it must be well-planned, sourced with high-quality data and supported within the organization. This guide reviews the key steps involved in running a successful salary benchmarking exercise. <\/p>\n\n\n\n

Set goals<\/h2>\n\n\n\n

Every salary benchmarking exercise must begin with setting goals to help direct efforts and secure buy-in. Before initiating the process of pulling and reviewing data, consider what the organization is looking to accomplish.<\/p>\n\n\n\n

Compensation strategy<\/h3>\n\n\n\n

When setting goals, consider the organization’s current compensation strategy. This involves, at minimum, reviewing whether the organization is leading, meeting or lagging the market. You may also consider other factors such as the strategy for specific job roles and the organization’s approach to employee benefits.<\/p>\n\n\n\n

If the organization would like to establish a new compensation strategy or adjust the existing strategy, ensure that relevant stakeholders are consulted about the purpose of the exercise. Common stakeholders outside of HR include the chief financial officer, in-house lawyers and other senior leadership.<\/p>\n\n\n\n

Job roles<\/h3>\n\n\n\n

In addition to understanding the goals of the salary benchmarking exercise, consider the breadth of the exercise. Will you benchmark all salaries in the organization? Or, will you focus on a specific office location, business function or other group? Are you considering remote employees? Defining the breadth of the project will help you zero in on which job roles you’ll need to evaluate and inform from where you might source your data.<\/p>\n\n\n\n

Other factors to consider<\/h3>\n\n\n\n

Though salary benchmarks are necessary to achieve the goals the organization has set out, they may not be sufficient. Organizations often use salary benchmarks alongside a range of other internal and external factors to reach a decision about pay levels. Important internal and external factors include: <\/p>\n\n\n\n