Salary benchmarking for start-ups expanding internationally

Salary benchmarking, or compensation benchmarking, is a great friend of the globally minded business leader. When seeking to expand your operations abroad, ensuring a contented, supported international workforce is key to success. In doing so, you need to strike a balance between competitive salaries and sustainable growth.

This is where salary benchmarking comes in. Salary benchmarking allows you to set appealing salary offerings, in line with local expectations. Not only this, but salary benchmarking reports outline the statutory benefits applicable in your country of hire, so you can be certain your company is compliant with the employment laws of your country of hire. And this is just the start of what a comprehensive salary benchmarking service can do.

A service that is often used in tandem with solutions like Employer of Record (EOR), or services from payroll outsourcing companies, salary benchmarking is a versatile tool to help start-ups succeed overseas.

What is salary benchmarking?

Salary benchmarking is a service whereby a team of experts benchmarks salaries and benefits packages against local averages, on behalf of a client, in the location where the 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.

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

Why is salary benchmarking useful to start-ups expanding internationally?

Competitive remuneration

Salary benchmarking allows employers to tailor their remuneration packages to local expectations and averages. It’s important to remember that when hiring abroad, the payment and benefits that you offer in your home country may not be appropriate for the new market.

The salary of a web developer in San Francisco will be different to that of a web developer in Mumbai, for example. You need to be aware that the minimum wage may not match the cost of living, as is the case in places like Ireland, Cyprus, and all U.S. states.

Benchmarking compensation makes sure that workers are offered attractive packages, suited to the country in question.

Worker satisfaction

A satisfied workforce gives your new branch the best chance of success. Studies show that higher salaries motivate 45% of employees to work harder. Workers also value factors like flexibility and work-life balance. Salary benchmarking reports take into account local and cultural expectations and preferences, allowing you to build an attractive compensation package tailored to your country of hire.

Compliance

Each country has its own laws around wages, taxes, and benefits. Many regions also have collective bargaining agreements (CBAs) which employers need to be aware of. A salary benchmarking report will include information on any relevant CBAs, which can include stipulations regarding the terms and conditions of employment, working conditions, remuneration, hours, leave entitlements, and benefits.

Falling foul of compliance is not something you want to deal with as you start your global expansion journey. Fines, bans, and legal proceedings can all result of non-compliance. So, centring compliance at the heart of all that you do is key to overseas success.

Reputation building

When you’re expanding into new regions, you’re effectively starting from scratch when it comes to your reputation. As such, you want to start off strong and not end up accidentally non-compliant or misunderstanding cultural expectations.

Offering solid remuneration packages in line with local laws and norms, and building a happy, dedicated workforce, your reputation as a trustworthy employer will grow and continue to attract top talent.

Salary benchmarking also looks at factors such as the local gender pay gap, race pay gaps, and DE&I requirement, so that you can make fair, equitable decisions around compensation.

Monetary savings

No matter how you slice it, expanding overseas is expensive. For start-ups working with limited budgets, it’s important to be economical where possible and identify the best strategies for long-term cost saving. Investing in retention is one of these strategies.

A 6% salary increase leads to a 16% rise in retention the following year. Boosting retention is a sensible economic measure with many positive repercussions beyond financial gain, including raised morale and greater innovation.

Investing in your employees means they are more likely to remain with your company. This, in turn, saves you the cost of hiring and training new staff – a process which is estimated to cost an average three to four times the worker’s salary.

What should you look for in a salary benchmarking provider?

Experience

Salary benchmarking is all about local expertise. So, you should partner with a provider that can offer knowledge gained from experience. Mauve Group has three decades of experience in the global HR sphere, and operates in 150 countries.

Relevance

A solid salary benchmarking provider will deliver a report that offers data specific to your industry, job functions, and geographical markets. Overly general data is useless – the whole point of benchmarking a role is to determine the social, economic, and legal requirements specific to the job as it exists in that location.

Transparency and trust

Reliable benchmarking reports use up-to-date data from reliable sources. These sources may include proprietary employer surveys, public labour market data, recruitment agency placements, and internal HRIS system aggregates.

You should avoid reports that are based on crowdsourced or self-reported data, unless the sample size and methodology are transparent and statistically sound.

The report should also clearly outline the sample size and demographic breakdown, the date range of the data, how the normalisation and outlier removal processes was completed, and what currency conversions and cost-of-living adjustments were made for international comparisons.

How Mauve Group can help

With 30+ years of experience in global workforce solutions, Mauve Group provides tailored benchmarking insights alongside its suite of Employer of Record (EOR), Global Payroll, and Global HR Consultancy services.

Mauve’s expert teams combine in-depth market research with real-world employment expertise across more than 150 countries. Whether you're entering a new market, restructuring globally, or evaluating your compensation strategy, Mauve can provide the accurate, region-specific benchmarking data you need, alongside compliant employment solutions to implement your findings with confidence.

Get in touch with our team, today.