Section: HR & People · CompensationDifficulty: Medium
Salary Benchmarking
USUK
Comparing internal pay against external market data to ensure competitiveness.
Definition
Salary benchmarking is the process of comparing an organization's compensation levels for specific roles against market data from salary surveys, industry reports, and peer organizations. This exercise helps HR ensure that pay is competitive enough to attract and retain talent while remaining within budget. Benchmarking outcomes inform pay band reviews, merit increase budgets, and offer decisions.
Example
“The annual salary benchmarking exercise revealed that software engineers were paid 15% below market median, prompting the company to revise its pay structure.”
Synonyms
- pay benchmarking
- compensation analysis
- market pricing
- pay analysis
Images
CC-licensed · free to useLoading images…