How salary benchmarking drives equity and transparency

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• Salary benchmarking helps businesses ensure pay equity, transparency, and competitive compensation.
• Companies in the UK increasingly use salary benchmarking tools and services to align with market rates.
• Accurate benchmarking supports fair pay practices, talent retention, and regulatory compliance.

Today’s jobseekers have moved on from the ‘job for life’ model favoured by previous generations. Recent data shows that while competitive salary still tops the list of requirements when prospecting new roles, workers are also seeking benefits and wellness packages, as well as flexible workplaces.

Workers also highly value job security. However, security isn’t enough if the role and working environment aren’t up to standard. There is more emphasis than ever before on workplace equity. This means ensuring fairness and diversity awareness is key to sustaining a satisfied, dedicated workforce.

So, how do you go about ensuring that you’re offering salaries, benefits, and a workplace environment in line with local industry standards and expectations when expanding abroad?

This is where salary benchmarking comes in.

What is salary benchmarking?

Before diving into how to conduct it, it’s important to understand what pay benchmarking really means.

Salary benchmarking is a service whereby, on behalf of their client, a team of experts benchmark salaries and benefits packages against local averages, in the location where the client wishes to hire staff.

A report is then compiled, including details and analysis of the economic situation, wage brackets, mandatory and preferred benefits, and all relevant legal and ethical considerations. This report helps employers to avoid overpaying or underpaying their staff and offer attractive compensation packages.

It also allows companies to gain in-depth insight into their new markets, understanding what local workers want, and what the norms, standards, and mandatory offerings are.

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

How to conduct salary benchmarking

Knowing how to conduct salary benchmarking properly is crucial for accurate, useful results. Before you engage a salary benchmarking partner, it’s important to know what salary benchmarking actually involves.

Here are the key steps to salary benchmarking.

Define the roles to benchmark

Identify the roles you wish to gather information on. Use clear, standardised job descriptions. This ensures you compare the correct roles across different organisations or datasets.

Gather reliable market data

Salary data can be sourced through salary benchmarking companies, third-party compensation surveys, and salary benchmarking tools. It is crucial that all data used in benchmarking analyses is current and particular to the region.

Salary benchmarking will always recommend the payment of a living wage. Often, this will not match the country’s minimum wage. As the cost of living rises globally, the existing minimum wage may not align.

For example, a study by Massachusetts Institute of Technology (MIT) shows that the minimum wage does not match the cost of living in any U.S. State.

Compare internal pay with external data

Analyse how your pay compares to market averages in your home country and new market. Adjust this according to role level, geographic location, and sector to get the clearest data on how your salaries compare to the standards in your new country.

Review equity and internal consistency

Once you have ascertained how your pay compares, it’s time to ensure that your internal pay structures reflect fairness and transparency.

Make sure there are no unexplained pay gaps for similar work done by individuals of differing profiles or backgrounds, for example. Salary benchmarking is a key tool used to continue shrinking the gender and race wage gaps.

Implement changes and communicate clearly

If you find disparities, you should consider adjusting your remuneration packages and setting clearer pay bands. Transparent communication about your benchmarking practices can build employee trust.

The role of salary benchmarking companies and tools

Many employers partner with salary benchmarking companies to access detailed insights, custom reports, and sector-specific data. Organisations that offer salary benchmarking often specialise in analysing roles across industries and offer tailored recommendations based on your company’s goals and workforce needs.

Many companies operating Employer of Record solutions supplement their offering with salary benchmarking services.

Alternatively, employers can opt for an online salary benchmarking tool to run comparisons internally. These tools can be particularly helpful for SMEs or HR teams with limited resources. A good salary benchmarking tool will allow you to segment by location, such as London, experience, and job level, giving you a granular view of the market.

Choosing between a company and a tool often depends on the scale of your organisation and the depth of insight needed.

Benefits of salary benchmarking for employees and employers

The positive impacts of salary benchmarking are felt at every level of business, from improved employee experience to increased retention levels, to successful market entry and the facilitation of greater expansion plans.

Let’s take a closer look at the benefits of salary benchmarking.

Promotes pay equity and fairness

Salary benchmarking helps identify and eliminate unexplained pay disparities. This supports diversity, inclusion, and equality objectives.

For more information on the legal and ethical considerations in salary benchmarking, download our whitepaper.

Builds trust and transparency

Employees who know their employer uses objective benchmarking processes are more likely to feel valued and fairly treated.

Enhances recruitment and retention

The Harvard Business Review notes that a 6% salary increase can lead to a 16% rise in retention the following year. Offering competitive salaries aligned with market data helps attract top talent and reduce turnover, particularly in high-cost areas like London.

Supports compensation planning and budgeting

HR teams can use benchmarking data to build pay structures and plan for salary reviews, ensuring consistency and predictability.

Ensures regulatory compliance

With increasing pressure on employers to report on gender pay gaps and executive compensation, salary benchmarking provides a defensible framework for pay decisions.

Fuels future expansion plans

By supporting companies to foster longevity amongst their workforce, as well as ensuring successful entry into new markets, salary benchmarking helps to lay the foundations for future expansion, setting in place a global operations infrastructure that will allow for success entering new and diverse markets down the line.

Common challenges and how to overcome them

Salary benchmarking is a hugely useful tool for businesses looking to broaden their horizons and expand overseas. However, if completed incorrectly, it can pose challenges. These include:

Data inconsistency

Without standardised job titles or duties, data comparisons can be flawed. Clearly defined roles and responsibilities should be used.

Outdated information

Relying on last year’s survey may lead to inaccurate decisions as market data fluctuates greatly year-on-year. Always use the most recent data available.

Internal resistance

Changing pay structures can meet pushback. Make sure that you involve leadership early and communicate openly with staff about changes and the rationale behind them.

All of these challenges can be easily overcome by engaging an experienced salary benchmarking service provider. Mauve Group has almost 30 years of experience in the field of global mobility. Our team of experts, dedicated to monitoring global markets, are ready and waiting to support your overseas expansion.

Salary benchmarking and your employer brand

A company known for fairness in compensation often stands out as an employer of choice. When candidates see that you benchmark roles carefully and transparently, they are more likely to view your organisation as progressive and trustworthy.

This is particularly important in competitive job markets like tech, finance, and healthcare. In cities where demand for talent is high, salary benchmarking ensures you don’t lose top candidates to competitors offering better packages.

Aligning salary benchmarking with your HR strategy

Effective salary benchmarking should not be a one-off exercise. It should be embedded into your broader HR and compensation strategy. Regular reviews—especially during annual pay rounds or after significant business changes—help maintain alignment with market conditions.

Engaging a trusted salary benchmarking partner and align your approach with evolving employee expectations and regulatory requirements.

Mauve’s salary benchmarking service

With almost 30 years of experience helping companies of all sizes to go global, our experts are armed with in-depth knowledge of 150+ countries. So, no matter where in the world you want to hire talent, we’re ready to provide comprehensive reporting on and analysis of all local factors – from salary expectations to mandatory benefits, to cost of living, and more.

Find out how we can help your organisation to go global. Contact us, today.