Interested in learning more about how our salary data can help you?
Compensation Benchmarking
and How It Shapes Your Organization
Compensation benchmarking is best defined as the process of applying external market data to make fair and competitive compensation decisions.
Compensation management relies on accurate data. Making a compensation plan that works requires the ability to adapt to changing business conditions.
Creating Compensation Plans
When creating a compensation plan for your business, it is important to focus on both internal and external factors, which include:
Internal
- Compression
- Budget Realities
- Compensation Strategies
External
- Market Rates for Various Occupations
Focusing too much on internal factors could cause the organization to lose touch with the market. Likewise, a focus on external forces only could lead to uneven compensation in the organization.
Well-designed salary structures have compensation levels that are internally equitable, externally competitive, and cost-effective and deliver a positive business impact on the organization in several ways.
Utilize our executive compensation data to help you create competitive compensation packages and attract top talent. Analyze and compare C-suite total compensation with executive compensation survey data for similar companies and other top executives.
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Benefits of Compensation Benchmarking in the Hiring Process:
- Finalizing New Hire Packages
- Avoiding Turnover and Loss
- Formalizing Job Descriptions
How to Use Compensation Budgeting to Calculate Raises
An annual salary review of all jobs, using salary survey data, allows for planning and preparation to make timely financial decisions to keep the labor force competitive.
The salary review should reveal the following:
- Equity considerations, both internal and external
- Position in range or compa ratio
- Structures
- Any legal or contractual obligations to consider, such as minimum wage updates or labor union contracts
Once a list of salary adjustments is made, compensation professionals can calculate the costs associated with pay raises, salary adjustments, and promotions for inclusion in the salary budget.
Many companies use a merit matrix to determine increases based on performance and comparisons.
