How SMEs can use salary benchmarking to compete with larger corporations

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In an ever-more competitive labour market, small and medium-sized enterprises (SMEs) face the dual challenges of attracting and retaining talent while often lacking the brand, resources, or prestige of larger corporations. Yet data-driven compensation strategies, especially salary benchmarking, offer a powerful way for SMEs to level the playing field.

This article explores how SMEs can use salary benchmarking to sharpen their hiring and retention propositions, and how an employer of record service can support global talent strategies as part of a broader global expansion initiative.

Why salary benchmarking matters for SMEs

Salary benchmarking is the process of comparing your organisation’s pay levels for specific roles against current market rates. Common mistakes include relying on outdated data, ignoring regional differences, and treating salary in isolation without benefits or broader compensation context.

For SMEs, the stakes are high: paying too little risks losing out to competitors (including large corporations), while paying disproportionately more than the market creates budget strain.

In Ireland, for example,  the average wage for SMEs was reported at around €30,400 compared to €47,388 for large enterprises in 2021. By bringing salary benchmarking into sharp focus, SMEs can establish pay structures that are competitive and sustainable, rather than reactive or ad hoc.

A landmark academic study found that access to benchmark salary data reduced salary dispersion within firms, meaning better internal equity and improved external competitiveness.

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

How SMEs can apply salary benchmarking in practice

Define clear roles and responsibilities

Start by ensuring you have well-defined job descriptions, including seniority, scope, and expected outcomes. Benchmarking only works when you compare like-with-like roles.

Gather and analyse market data

Use multiple sources: salary surveys, industry reports, regional pay guides and real-time platforms.

For instance, real-time data tools  can help employers see what competitors are offering right now. HR services Mauve Group provide tailored salary benchmarking specifically for Irish SMEs, reflecting location and sector variations.

Segment by seniority, location and industry

A one-size-fits-all salary range won’t work. Regional cost-of-living, industry norms, and company size matter. Mauve Group highlights that ignoring regional/industry pay differences is a major pitfall.

Incorporate total compensation

Salaries are just part of pay; bonuses, benefits, remote work allowances, and non-monetary perks all influence attractiveness. Ensure benchmarking captures total compensation.

Set pay bands and communicate transparently

Once you have benchmark data, create salary bands for each role or grade. Communicate your compensation philosophy to staff and candidates, so you’re positioned as a transparent and fair employer.

Review and update regularly

Markets evolve fast. Regular refreshes of benchmarking data ensure you don’t drift out of alignment, especially important when you’re aiming for global expansion.

A strategic pay advantage: how salary benchmarking helps you compete

Attract talent who might otherwise choose larger firms

If you can clearly demonstrate that your pay is on-par with the market (or even slightly ahead in key roles), you can neutralise the “big corporation budget” talking point.

Improve retention and reduce unwanted turnover

When pay lags market, employees often leave for marginally better offers. Benchmarking helps you identify and close retention risk.

Optimise cost-effectiveness

Overspending on roles adds cost without proportionate value. Benchmarking ensures you pay a fair rate while staying within budget.

Strengthen employer brand

SMEs that demonstrate they pay competitively and fairly build stronger employer reputations, helping with future hiring and the ability to expand globally.

Support global talent strategies and expansion

If you’re planning global expansion, salary benchmarking becomes even more critical. Pay norms differ widely across countries and regions. Being able to benchmark globally means you can hire internationally without overpaying or underpaying.

The role of an Employer of Record service in this equation

When an SME expands globally or hires remote talent in regions where it doesn’t have a legal entity, an Employer of Record service (EOR) becomes a strategic enabler.

An EOR partners with your business by legally employing staff in a target country, handling payroll, benefits, compliance, and local tax-law requirements.

Here’s how an EOR supports salary benchmarking and global growth:

• Local market access: Many EORs offer insights into local salary norms, benefits expectations, and regulatory frameworks, feeding into your benchmarking process.
• Speed to hire: Rather than setting up entity structures, you can onboard talent quickly via an EOR; using your benchmarking data to decide appropriate pay.
• Compliance and cost-efficiency: EORs help you avoid misclassification, labour-law violations, and costly entity setup. That gives you budget flexibility; essential when you must compete with bigger players internationally.
• Scalable global growth: As you expand into multiple countries, consistent benchmarking across your global workforce ensures you scale pay fairly, avoiding pay inequities between regions.

Thus, salary benchmarking and the employer of record model combine to give SMEs the ability to punch above their weight in hiring and retention, especially in global markets.

Practical steps to integrate benchmarking and global expansion

Start domestically

Benchmark roles in your home market to understand your current competitive position.

Segment your roles for key talent

Focus benchmarking on strategic positions that drive growth (sales, engineering, international functions) rather than every role initially.

Plan for global roles

For hires abroad, benchmark local pay (using local data sources or your EOR’s intelligence). Adjust for cost-of-living, local benefits norms and currency effects.

Partner with an EOR or global payroll provider

This ensures compliance and gives you local market context.

Define a pay philosophy

Decide whether you target the 50th percentile, the 75th percentile or a unique strategy (e.g. “top-quartile for high-impact roles”).

Include non-monetary differentiators

As an SME, you likely offer fast career growth, flexible working, culture advantages. Make sure these are counted when benchmarking pay and benefits.

Communicate the value proposition to candidates

Show how your pay aligns with market benchmarks and how your non-monetary benefits compare favourably to larger organisations.

Review globally

As you hire across geographies, keep consistent methodology—comparing like roles in each market, adjusting for local realities. Update benchmarking annually or whenever you pivot growth strategy.

Challenges and how to overcome them

Challenge: Limited budget compared to large corporates.

Solution: Use benchmarking to identify roles where you need to match or slightly exceed market rate, and for others, lean into non-monetary differentiators (culture, growth, flexibility).

Challenge: Accessing reliable global salary data.

Solution: Use a combination of local salary survey providers, regional HR consultancies, and EOR partners’ data. Avoid relying on a single data source.

Challenge: Ensuring internal equity across different geographies.

Solution: Benchmark each market separately, then set a global pay philosophy that ensures fairness while recognising local realities.

Challenge: Keeping up with fast-moving markets.

Solution: Commit to periodic benchmarking updates. As real-time data tools become more available, SMEs can more easily track changes.

For SMEs looking to compete with larger corporations—not just locally, but globally—salary benchmarking is no longer a luxury, it’s a necessity. By carefully benchmarking pay, managing cost-effectiveness, and leveraging the right partners—including an employer of record service, you can build a compelling compensation proposition that helps you attract, engage and retain top talent.

When done correctly, benchmarking transforms from a cost-control exercise into a strategic asset: enabling your SME to act more like a large organisation in talent markets without carrying the same overhead. Add in global expansion ambitions, and the combination of salary benchmarking plus a smart EOR strategy gives you a competitive edge, even against much bigger players.

How Mauve can help

For SMEs aiming to compete with larger corporations, salary benchmarking is a crucial strategy but gathering accurate global data and ensuring compliance can be complex. Mauve Group simplifies this process by combining expert salary benchmarking support with its leading employer of record service.

With almost 30 years of experience, Mauve provides SMEs with real-time market insights, local pay intelligence, and compliance expertise, helping them build competitive and transparent compensation structures across multiple regions.

As SMEs pursue global expansion, Mauve Group enables them to hire international talent quickly and compliantly, without needing to set up local entities. By integrating benchmarking, payroll, and HR compliance into one seamless solution, Mauve empowers growing businesses to attract and retain top talent worldwide, strengthen their employer brand, and scale confidently in new markets.