Salary benchmarking for start-ups: a beginner’s guide to competitive pay

Take the guesswork out of compensation. Use Mauve's salary benchmarking services to build pay strategies that scale with your start-up. Contact us, today.

• What is salary benchmarking? Salary benchmarking is a service that compares salaries and benefits against local expectations, helping businesses make informed decisions around remuneration when expanding into new markets. This ensures fair pay aligns with economic conditions and considers legal and ethical factors.
• Attract and retain talent: Salary benchmarking helps start-ups attract and retain talent by offering fair, competitive compensation based on reliable market data.
• Mauve Group can help: Partnering with a global HR expert like Mauve Group ensures accuracy, compliance, and scalability, especially for international hiring.

For start-ups and SMEs, attracting and retaining top talent in new locations can make or break a global expansion. In today’s highly competitive job market, effective expansion strategies have attractive remuneration packages at their heart.

That’s where salary benchmarking comes into play. Salary benchmarking is a service offered by global employment solution providers that helps businesses with making strategic compensation decision.

This article explores the essentials of salary benchmarking for start-ups, helping founders and HR teams create compensation packages that are both attractive and sustainable.

What is salary benchmarking?

Salary benchmarking is the process of comparing your company’s compensation packages with industry standards and competitors. It involves gathering and analysing data to determine what other companies are paying for similar roles in similar locations.

For start-ups, salary benchmarking provides a framework to offer fair and competitive pay, which is critical in the early stages of growth. Without this information, businesses risk underpaying (and losing talent) or overpaying (and burning through limited resources).

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

Why salary benchmarking matters for start-ups

When planning compensation, start-ups and smaller businesses face unique challenges. Unlike established corporations, they often lack structured pay bands or historical data. However, there are several key reasons why salary benchmarking is crucial:

• Talent acquisition: Offering competitive salaries helps attract high-quality candidates, especially in specialised or high-demand roles.
• Employee retention: Fair and transparent compensation reduces turnover and boosts morale.
• Budget control: Benchmarking ensures your start-up doesn’t overspend on salaries unnecessarily.
• Investor confidence: Clear salary structures demonstrate professionalism and sound management to investors.

When should start-ups benchmark salaries?

There’s no timeline that will fit all organisations, as each business will have its own needs, goals, and plans. However, there are some key moments when salary benchmarking is essential.

Before your first hire

Knowing the standard rate for the roles for which you’re hiring helps you set realistic budgets.

During periods of growth

As your team expands, consistent benchmarking helps maintain fairness and equity.

Before funding rounds

When pitching to investors, demonstrating a well-planned compensation strategy can strengthen your case.

When entering new markets

Benchmarking ensures pay is appropriate for the cost of living and labour norms in new geographies.

Key steps in the salary benchmarking process

Identify the roles to benchmark

Focus on key positions that are critical to your start-up’s growth. Prioritise roles where compensation may vary significantly based on location, experience, or demand.

Gather relevant data

Use reputable salary data sources, such as industry reports, job boards, and HR platforms.

Analyse the data

Look at salary ranges rather than single averages. Consider variables like location, experience level, company size, industry sector, remote work or in-office work.

Align with your compensation philosophy

Factor in non-monetary benefits

Start-ups often can’t compete on salary alone. Include other aspects of compensation such as equity or stock options, flexible working arrangements, professional development opportunities, health and wellness benefits, and generous leave policies.

Create transparent salary bands

Group roles into levels (e.g. junior, mid, senior) and define salary bands for each. Transparency helps reduce bias and improves internal equity.

Review regularly

The market changes quickly, especially in tech-driven industries. Review your salary benchmarks at least annually or during significant shifts in hiring or funding.

Common mistakes to avoid

Relying on outdated data

Salary data can quickly become obsolete. Use recent benchmarks, ideally from the last 6–12 months.

Ignoring geographic differences

Pay expectations vary widely by region, even within the same country.

Overlooking internal equity

As you grow, ensure consistency and fairness across teams and departments.

Not accounting for total compensation

Salary is just one part of the equation. Don’t forget bonuses, equity, and benefits.

The role of external experts in salary benchmarking

While some start-ups attempt to manage benchmarking internally, working with a global HR solutions provider can streamline the process and ensure accuracy. External experts bring access to comprehensive, up-to-date salary data, industry-specific insights, global coverage for remote or internationally based teams, and guidance on compliance with local labour laws.

This is especially valuable for start-ups expanding into new countries or hiring remote employees across multiple jurisdictions.

Building a scalable compensation strategy

Effective salary benchmarking lays the foundation for a scalable pay structure. As your company grows, your compensation model should be able to accommodate new roles, new locations, and more complex reporting structures.

Start-ups that adopt robust salary benchmarking practices early on are better positioned to scale, attract world-class talent, and maintain a positive employer brand.

It also contributes to a culture of transparency and fairness, which is increasingly important for Gen Z and Millennial workers.

Why Mauve Group is your ideal salary benchmarking partner

Navigating salary benchmarking on your own can be complex and time-consuming — especially when hiring across borders. That’s where Mauve Group comes in. As a trusted global HR and workforce solutions provider, Mauve Group has almost 30 years of experience helping start-ups and scale-ups build smart, competitive compensation strategies.

With access to reliable salary data in over 150 countries, deep market insight, and compliance expertise, Mauve Group helps you design pay structures that are not only competitive but also legally sound and culturally appropriate.

Whether you’re hiring your first developer in Berlin, expanding your sales team into Southeast Asia, or launching a remote-first company, Mauve ensures your salary benchmarks are aligned with your business goals and local expectations.

Mauve’s tailored solutions go beyond benchmarking. They offer employer of record (EOR) services, international payroll, visa support, and global HR consultancy... everything you need to grow your team without borders.

When it comes to building a competitive edge through fair and effective compensation, Mauve Group is the partner start-ups trust. Contact Mauve today.