How often should you update salary benchmarks? A payroll calendar for HR teams

• Updating pay structures is now a core business discipline.
• Regular salary benchmarking protects competitiveness, compliance, and employee trust.
• A structured payroll calendar ensures benchmarking aligns with payroll cycles and wider HR operations.

HR leaders know that attracting and retaining top talent is intrinsic to the success of their business. You want to give your company the best chance at hiring the best individuals for the role. But you also need to make sure that once hired, your employees continue to feel valued and secure.

Salary benchmarking with regularity means that your organisation is committed to ensuring that your workers’ remuneration packages match their roles and level.

It also means that your company is considering local factors such as cost of living and equality issues.

Ensuring that your employees are paid more than the regional cost of living, and that any equality issues - such as local gender, race, or disability pay gaps - are being challenged, builds your reputation as an employer of substance.

When you benchmark worker salaries, you’re showing your workforce that you value their contributions. After all, salary is the number one motivator for workers changing jobs. Plus, compensation benchmarking doesn’t just look at pay packets. It considers statutory and optional benefits, like healthcare and flexible work, which rank highly in worker surveys.

Despite its importance and far-reaching organisational impact, many HR teams still treat salary benchmarking as an annual exercise. In reality, the right frequency depends on factors such as market volatility, geography, business growth, and workforce complexity.

For HR leaders, the challenge is building a consistent process. This process should ensure benchmarking aligns with payroll cycles, budgeting timelines, and global expansion plans. A well-designed payroll calendar transforms salary benchmarking from a sporadic or reactive action into a dependable process. This process supports compliance and improves workforce planning, while strengthening retention and boosting worker morale.

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

Why salary benchmarking needs to be consistent

Salary benchmarking is the process of comparing internal pay data against external market rates for similar roles, skills, and levels of responsibility. When executed correctly, it ensures that remuneration remains competitive, equitable, appropriate, and aligned with business objectives.

In years gone by, an annual review of payroll processes by HR professionals was enough. However, today, economic changes, as well as changes to working models, have meant that pay expectations have fluctuated massively across all sectors. In industries such as technology, life sciences, and financial services, compensation expectations can change significantly within a year. Even in traditionally steady sectors, inflation pressures and regulatory updates require more frequent attention.

Without set regularity, HR operations risk some common problems. Firstly, teams may not notice as pay gaps may widen. This creates retention risks and sparking ethical concerns which may escalate to legal action or industrial disputes.

Second, payroll cycles may proceed using outdated salary bands, leading to complicated adjustments required later. Third, international employers working with global payroll providers may struggle to maintain consistency across jurisdictions with different review norms and compliance requirements.

A structured payroll calendar prevents these issues by including salary benchmarking into the annual and quarterly  of the organisation.

Baseline annual benchmarking

For most organisations, a full annual salary benchmarking review remains essential. This comprehensive exercise typically aligns with budgeting and strategic workforce planning.

In the UK and many other markets, annual reviews often take place in the final quarter of the financial year. This allows HR teams to incorporate updated market data into salary bands and merit increase budgets. This timing ensures that HR teams can implement adjustments smoothly .

An annual review should cover all core job families, pay grades, and locations. It should also assess benefits and variable compensation structures.

While annual benchmarking provides a stable foundation, it should not be the only element of payroll process that comes under review.

Quarterly checks for fast-paced markets

In rapidly moving sectors or high growth businesses, quarterly ‘pulse checks’ are increasingly common. These are top-line reviews focusing on critical roles, rare skills, and economic market conditions.

Don’t worry: quarterly checks don’t require a full regrading exercise. Instead, HR teams review market indicators, recruitment data, and internal attrition trends. If hiring costs are rising or offer acceptance rates are declining, this may signal that salary bands need adjustment before the next annual cycle.

For organisations operating across borders, quarterly reviews can also note currency fluctuations and local market changes. Global payroll providers can supply regional insights that help HR teams identify early changes. HR teams can then plan for updates to compensation expectations.

By integrating quarterly checkpoints into payroll cycles, businesses can implement targeted adjustments without disrupting overall pay structures.

Monthly monitoring through payroll data

Although formal benchmarking may not occur monthly, payroll data should be monitored continuously. Payroll cycles generate valuable insights into overtime patterns, bonus pay-outs, and pay progression.

Regular analysis supports informed salary benchmarking decisions later in the year. For example, if payroll reports reveal consistent reliance on overtime in a particular department, this may indicate that base pay is not aligned with workload expectations. Similarly, repeated use of off-cycle salary adjustments suggests that existing pay bands may no longer reflect market realities.

Embedding monthly data reviews into HR operations ensures that benchmarking is evidence based rather than reactive.

What to look out for

Following an annual benchmarking calendar should be par for the course. However, there are certain situations that should prompt immediate benchmarking.

Rapid expansion into new markets is one such situation. When entering a new country, organisations must understand what the local salary expectations are. Teams should bear in mind, they may not match their domestic salary bands.

New locations also come with new statutory requirements and different competition. Working with experienced global payroll providers can streamline this process by combining compliance expertise with market intelligence.

Mergers and acquisitions also necessitate urgent compensation benchmarking. Aligning disparate pay structures requires careful comparison against market data to prevent inequities and retention risks.

Significant regulatory changes represent another trigger. Updates to minimum wage laws, equal pay regulations, or tax thresholds can have cascading effects on pay structures. HR operations teams must review salary bands promptly to ensure compliance within upcoming payroll cycles.

High turnover in specific roles is a further warning sign. If exit interviews repeatedly cite compensation concerns, a targeted benchmarking review should follow. Delaying action until the next annual cycle risks further attrition and recruitment costs.

Designing a payroll calendar for salary benchmarking

A payroll calendar brings structure to salary benchmarking by mapping review activities against payroll cycles, financial planning, and performance management milestones.

In practice, this means identifying when data collection, market analysis, internal review, and communication should occur. For example, market data gathering might take place in October, internal modelling in November, and leadership approval in December, with changes implemented in January payroll cycles.

Quarterly checkpoints can be scheduled alongside headcount reporting, allowing HR operations to assess recruitment trends and pay competitiveness at the same time.

International employers must also account for differing payroll cycles across countries. Some jurisdictions operate monthly payroll, while others include additional pay periods such as 13th month salaries. Aligning benchmarking reviews with these cycles reduces administrative burden and ensures accurate implementation.

A clear calendar also enhances transparency. When employees understand that salary benchmarking occurs at defined intervals, expectations around pay progression become more manageable.

By embedding salary benchmarking into cross-functional planning sessions, HR teams ensure that compensation strategy supports broader business goals.

The role of technology and global partners

Modern HR technology platforms can automate aspects of salary benchmarking, integrating external market data with internal payroll records. These systems allow HR operations teams to model scenarios, assess budget impact, and generate reports for leadership.

For organisations with international workforces, collaboration with global payroll providers adds further value. Beyond processing payroll, these partners often offer insights into local pay trends, statutory updates, and compliance risks. Their expertise is particularly useful when synchronising benchmarking across multiple jurisdictions with varying payroll cycles.

Technology and external expertise do not replace strategic decision making, but they provide the data foundation necessary for informed choices.

Benchmark your salaries with Mauve Group

Mauve Group specialises in supporting international growth through compliant employment and payroll solutions. By working alongside trusted global payroll providers and offering expertise in cross-border HR operations, Mauve helps organisations align salary benchmarking with local regulations and global strategy.

For businesses navigating complex payroll cycles across multiple countries, partnering with an experienced provider ensures that compensation reviews are accurate, timely and fully compliant.

FAQs

How often should salary benchmarking take place within a typical financial year?

Most organisations should conduct a comprehensive salary benchmarking review once per year, typically aligned with budgeting and annual pay review planning. In addition to this review, many businesses benefit from quarterly pulse checks. Teams focus on critical roles, high demand skills, or fast-changing markets.

Monthly monitoring of payroll data should also take place to spot trends that may signal the need for earlier intervention. This layered approach ensures stability while maintaining competitiveness.

What business triggers require an immediate pay review outside scheduled cycles?

Several events justify an off-cycle benchmarking review. Rapid expansion into a new country or region requires updated local market data to set competitive and compliant pay levels. Mergers and acquisitions often create inconsistencies between legacy pay structures that must be harmonised.

Regulatory changes such as minimum wage increases or equal pay updates can necessitate prompt adjustments. Persistent hiring difficulties, declining offer acceptance rates or rising turnover linked to pay concerns are also clear indicators that salary benchmarking should be revisited immediately.

How can HR teams align benchmarking with payroll cycles and broader HR operations for maximum impact?

HR teams can align salary benchmarking with payroll cycles by building a structured payroll calendar that maps market data collection, internal modelling, leadership approvals, and implementation dates against existing pay run schedules. This prevents last minute adjustments and ensures changes are reflected accurately in payroll.