Pay benchmarking for remote workforces: what you need to know

Stay competitive in a global market – benchmark salaries across regions to ensure fair, location-aware compensation for your remote teams. Contact our team to learn more.

As the COVID-driven shift to remote and hybrid working continues to mould the global employment landscape, businesses of all shapes and sizes are navigating unfamiliar terrain. This is especially true of companies seeking to offer competitive salaries when expanding into new locations.

Workers are no longer tied to a single location, meaning that traditional salary models are being re-evaluated. Pay benchmarking for remote workforces has become a critical strategic tool.

As workers consistently lean toward remote and hybrid working preferences, smart employers are seeking sensible, agile ways to meet this demand while ensuring their businesses continue to thrive.

So, what is pay benchmarking, and why does it play such a key role in today’s remote-first world?

Read on to find out and learn how your organisation can implement an effective benchmarking strategy to ensure fair and equitable pay, attract and retain top talent, and remain compliant across multiple jurisdictions.

What is salary benchmarking?

Salary benchmarking, also known as pay benchmarking, is the process of comparing your organisation’s compensation packages with those associated with similar roles in the same industry or geographic region. It helps businesses to determine appropriate salary ranges and benefits packages based on current market data, job responsibilities, experience levels, and location. It allows businesses to identify, track and compare salaries, set salary ranges, and provide competitive pay.

Using a salary benchmarking provider or salary benchmarking tools enable employers to make informed, data-driven decisions about salaries. The company, therefore, reduces the risk of overpaying or underpaying employees. It also means that pay practices align with evolving market standards. This is particularly important in the context of remote work.

Dedicated service providers conduct salary benchmarking and collect salary data on behalf of businesses. This helps companies to see improved retention rates, and offer competitive salary and benefits packages.

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

Benefits of salary benchmarking for remote teams

With remote work here to stay, salary strategies must evolve their processes to reflect the new reality, for a variety of reasons.

Geographic pay differentiation

Remote employees can work from different cities, regions, or even countries. Each place will have its own cost of living, wage expectations, and legal requirements. With this in mind, a ‘one-size-fits-all’ salary model may lead to compensation disparities, employee dissatisfaction, inequity, and legal risks.

Pay benchmarking allows you to factor in local market rates, creating a geographically sensitive salary structure that balances fairness with financial sustainability.

Attracting and retaining global talent

In competitive talent markets, top professionals are more likely to choose employers who offer transparent, fair, and competitive compensation. A well-benchmarked pay strategy demonstrates that your company values its people and understands local expectations. These are key factors in attracting and retaining remote workers.

As workers become more mobile and informed, their awareness of pay transparency and what their peers are earning grows. Poorly researched, low offers will likely result in losing strong candidates to better-paying competitors. Offering informed, attractive packages will prevent the loss of talent and secure a solid workforce.

Ensuring compliance with local regulations

Each country has its own strict labour laws regarding minimum wage, equal pay, and benefits. Without the appropriate local knowledge, businesses risk accidentally breaching compliance rules when hiring remotely. Benchmarking compensation using reliable, localised data helps to ensure that companies’ pay practices meet the legal and expected standards in each location.

By continuing to conduct salary benchmarking at regular intervals, you will keep up to date with latest changes to local laws and information on pay.

Supporting diversity, equity and inclusion (DEI)

The remote work era has facilitated more diverse hiring. It has done so by allowing companies to more easily employ foreign workers and expand internationally.

Pay benchmarking plays a vital role in ensuring equitable pay regardless of gender, race, or geography. The salary benchmarking process supports broader DEI goals and foster fairer work environments.

Challenges of pay benchmarking for remote workforces

Salary benchmarking is extremely important and a complex process. Therefore, it comes with its own set of challenges.

Data complexity

Reliable salary data may not be readily available for all regions, especially emerging markets or niche roles.

Rapid market changes

Pay trends can shift quickly in competitive industries, particularly in tech and digital services.

Currency fluctuations

Managing pay across multiple currencies requires careful financial planning and awareness of exchange rates.

Cultural expectations

In some countries, benefits and perks are more significant and sought after than base pay. Benchmarking must consider total remuneration packages, not just salary.

Internal consistency

Companies must balance external competitiveness with internal equity to avoid upset and pay disparity.

Key strategies for effective pay benchmarking

To successfully implement a benchmarking strategy for your remote workforce, it is advisable to consider some key best practices.

Define your compensation philosophy

Start by clarifying your company’s approach to pay. Will salaries be based on the employee’s location, a regional average, or the region where company’s headquarters is based?

Some organisations adopt a location-based model, while others opt for location-agnostic pay. Both options have pros and cons. Companies should seek to align their choices with their values, budget, and long-term goals.

Use credible benchmarking data sources

Leverage reliable, up-to-date salary data from trusted sources, such as compensation surveys, labour market platforms, industry reports, and regional HR consultants. Ideally, this data should include details on total rewards, such as bonuses, benefits, and allowances, not just the average salary locally.

Working with global HR providers or Employer of Record (EOR) service providers can provide access to local market intelligence that would be difficult to obtain independently.

Factor in the total cost of employment

When hiring across multiple countries, salary is only one aspect of the total cost of employing workers. Crucial to factor in are social security contributions, taxes, insurance, paid leave, and statutory benefits. All of these factors vary widely between places and should be included in any benchmarking analysis. This ensures that businesses can budget accurately and remain compliant in each jurisdiction.

Maintain internal equity

While external benchmarking is very important, you must also ensure that salaries make sense within your organisation. Employees performing similar work at the same level should receive equitable pay, regardless of where they live. A consistent framework prevents internal discord and supports retention.

Communicate your pay strategy transparently

Remote workers wish to understand how and why their compensation is what it is. Transparent communication about your pay benchmarking process builds trust, reduces misunderstandings, and drives equity. It also reinforces your company’s commitment to fairness and accountability.

How technology can support pay benchmarking

Modern compensation tools and HR software platforms can simplify the benchmarking process by consolidating salary data, automating calculations, and helping business leaders to visualise trends across markets. These tools are especially valuable for companies scaling quickly or operating across multiple countries.

Additionally, integrating your benchmarking strategy into wider HR systems, such as performance management and career development, helps ensure pay decisions remain aligned with employee growth and company objectives.

When to seek expert support

If your business is expanding internationally or managing a fully distributed team, partnering with a global HR expert or Employer of Record may be the answer.

These providers have access to extensive local salary data, understand legal requirements in each country. They can help you build a scalable, compliant, and competitive compensation strategy.

How Mauve Group can help

With almost 30 years of global HR experience and a presence in more than 150 countries, Mauve Group is uniquely positioned to support your pay benchmarking needs. Through our Employer of Record services, we help organisations like yours understand local salary trends, set competitive compensation packages, and ensure compliance across borders.

Whether you're hiring your first remote employee or scaling a global team, Mauve provides access to accurate benchmarking data, expert insights, and tailored support to ensure your compensation strategy is fair, competitive, and future-proof.

Ready to build a better remote pay strategy? Speak to the experts at Mauve Group and ensure to pay your global workforce correctly, wherever they are in the world.