The link between salary benchmarking and employee retention strategies

• Salary benchmarking provides the market data needed to create fair, competitive compensation structures, which strengthens employee trust and reduces turnover.
• Benchmark-informed strategies, such as transparent pay bands, performance-based rewards, and equitable benefits, directly support retention efforts by aligning pay with employee expectations and industry standards.
• Partnering with specialists like Mauve Group helps organisations implement reliable benchmarking and global HR solutions, ensuring compliance, consistency, and long-term employee engagement.

Money may not buy happiness, but studies show that salary is a key driver of employee satisfaction. Fair compensation goes a long way toward making workers feel valued. This, in turn, boosts their commitment to your company.

Of course, any good leader aims to nurture satisfied teams. This is not only to fulfil your responsibilities as an ethical employer, but also to ensure that employee turnover remains at a minimum.

Retention is a primary concern for employers across the board – but especially for those undertaking international hiring ventures. This is where salary benchmarking comes in.

What is salary benchmarking?

Salary benchmarking is a service provided by global employment service providers. This service involves a team of experts benchmarking salaries and employee benefits packages against local averages in the location where a client wishes to hire staff.

The experts then compile a report, featuring details and analysis of the economic situation, wage brackets, mandatory and preferred benefits, as well as the relevant legal and ethical considerations. Salary benchmarking involves:

Industry reports

Industry reports provide broad insights into pay trends within a specific sector. This helps employers to understand how competitors compensate similar roles when engaging in global hiring.

Geographic data

Geographic data is equally important, as salary expectations vary widely by region due to local cost-of-living differences and talent supply. Employers often need to compare national, regional, and even city-level data to adjust pay ranges appropriately.

Job-specific metrics

such as experience level, required certifications, and role complexity, ensure that salaries reflect the unique demands of each position. Together, these data sources allow companies to create competitive, well-structured compensation frameworks that support retention.

For more information, visit our Ultimate guide to salary benchmarking.

How does salary benchmarking support retention strategies?

There are a number of overheads to consider when hiring overseas, even if doing so with the support of an Employer of Record (EOR). So, once you’ve hired your global team, you want to keep them. After all, the cost of losing an employee and hiring a new one can be close to USD 5,000.

Salary benchmarking can support your business’s retention strategy in the following ways.

Competitive compensation

When you’re hiring in multiple countries, the salaries you pay your domestic workers may not be appropriate. Depending on where you’re expanding, your existing pay scales may be far too low or too high.

Salary benchmarking gives you a comprehensive rundown on local expectations. This allows you to avoid over- or under-paying your new workers, while still providing a competitive offering, meaning your workers feel valued and are less likely to seek alternative employment.

Compliance ensured

Salary benchmarking goes beyond what appears on your workers’ payslips. It also covers benefits offering. Many countries have mandatory benefits - such as healthcare and pensions - that must be provided by employers.

Salary benchmarking reports include information on all mandatory and optional benefits. This allows you to develop an attractive remuneration package for your overseas workers while remaining compliant with local employment laws.

Diversity, equality, and inclusion

Salary benchmarking reports feature intel on the social and economic situation in-country. Employers can learn about the gender, race, and disability pay gaps present. Then, they can take steps to reduce these gaps when developing their payment strategy.

Being seen as an equitable employer with fairness at the heart of its operations will help you to build a strong reputation when hiring internationally. This will also mean your employees feel seen and valued, therefore increasing retention.

How benchmarking supports other retention strategies

Salary benchmarking doesn’t operate in isolation. As a tool, it strengthens a wide range of employee retention strategies. It does so by providing a solid foundation for fair and consistent people practices.

Career development

Career development becomes more meaningful when organisations use market-aligned pay bands to define clear growth paths. Employees can see how their skills translate into higher pay levels, which reinforces motivation and reduces the likelihood of them seeking advancement elsewhere.

Benchmarking also enhances performance management by linking compensation to measurable performance metrics. When employees understand that strong performance is rewarded based on transparent, data-driven criteria, they are more likely to stay engaged and committed.

Benefits and perks

Beyond base pay, benchmarking informs the design of benefits and perks, ensuring that employers offer competitive health coverage, bonuses, flexible work options, and other incentives that match or exceed market expectations.

Communication and trust

Finally, benchmarking supports communication and trust. When leaders share high-level benchmarking insights with employees, it promotes transparency and demonstrates that compensation decisions are both fair and strategic, strengthening retention by building confidence in the organisation’s long-term direction.

Practical steps for implementing salary benchmarking

By following these steps for salary benchmarking, you can create better pay and retention strategies for overseas employees.

1. Consult a global human resources (HR) expert, such as Mauve Group. With 30 years’ experience in the field, Mauve Group’s experts are ready and waiting to develop comprehensive compensation benchmarking reports. Once you have chosen from our Standard or Enhanced salary benchmarking services, you can use this in-depth information to assess your current pay structure versus the new market.
2. Adjust salary bands and benefits as needed in order to ensure equity, fairness, and competitiveness.
3. Introduce pay transparency guidelines to build trust and a strong reputation as a communicative, fair employer.
4. Integrate benchmarking data into annual compensation reviews for a more insightful overview of the realities of your pay structure.
5. Emphasise the role of HR, finance, and managers in maintaining competitive compensation. Do so by continually communicating with and training your teams to be aware of potential for inequity.

How Mauve Group can help

Mauve Group’s dedicated Salary Benchmarking service helps companies make data-driven decisions about pay and benefits. This helps to ensure that compensation remains competitive in local and global markets.

Our global HR consultancy offers tailored support for building fair reward schemes, performance-based pay, and benefits packages that align with both market practices and your organisational goals.

By partnering with Mauve, organisations can navigate complex compliance landscapes, comply with local labour laws, maintain internal equity, and communicate compensation transparently during their global expansion. This way, they can foster trust and keep top talent engaged.

Whether you’re scaling internationally or simply refining your compensation strategy, Mauve Group offers the expertise, local insight, and consistent support to help you retain your most valuable asset: your people.

Contact Mauve today to find out how our salary benchmarking service can help you with your global retention strategy.

Frequently asked questions

1. What is salary benchmarking, and why is it important for retention?

Salary benchmarking involves comparing an organisation’s pay and benefits against market data to ensure compensation is competitive. This helps retain employees by reducing pay dissatisfaction and improving internal equity.

2. How often should companies update their salary benchmarking data?

Most organisations review their benchmarking annually, but industries experiencing rapid change may require updates every six months to stay competitive.

3. Can salary benchmarking help improve internal pay fairness?

Yes. Benchmarking identifies discrepancies between market rates and internal salaries, helping employers correct pay gaps, prevent inequities, and maintain employee morale.