Pay benchmarking is the process of comparing an organisation’s compensation levels - such as base salary, bonuses, and total rewards - against external market data to determine whether employee pay is competitive. It helps businesses ensure fair, consistent, and compliant compensation across roles, departments, and global locations.
Pay benchmarking is essential for organisations operating in multiple countries, where salaries vary due to labour laws, market conditions, and cost-of-living differences. By analysing reliable salary data, businesses can attract talent, improve retention, and avoid over- or under-paying employees.
Pay benchmarking combines internal compensation data with external market insights. The process typically includes:
- Job evaluation: reviewing internal job descriptions, responsibilities, and skill requirements.
- Market data collection: using salary surveys, benchmarking tools, job boards, and industry reports to gather relevant pay information.
- Job matching: aligning internal roles with equivalent roles in external datasets.
- Compensation comparison: analysing salary ranges, total compensation, industry standards, and geographic pay variations.
- Pay equity review: identifying gender, regional, or role-based pay disparities to ensure compliance.
- Reporting & decision-making: creating clear compensation recommendations for HR and leadership teams.
This structured method ensures salary decisions are fair, consistent, and aligned with strategic workforce planning.
- Competitive compensation: ensures pay levels match market expectations and help attract top talent.
- Fairness & transparency: reduces internal inequities and strengthens organisational trust.
- Global consistency: supports standardised compensation across countries and business units.
- Retention improvement: helps maintain employee satisfaction by offering appropriate, market-aligned salaries.
- Informed budgeting: provides data-driven insights for workforce planning and salary reviews.
- Legal compliance: supports equal pay obligations and reduces risk of labour disputes.
While the terms are often used interchangeably, there are subtle differences:
- Salary benchmarking: primarily focuses on base pay and role-specific compensation.
- Pay benchmarking: encompasses total compensation, including bonuses, allowances, benefits, and rewards.
Pay benchmarking provides a more holistic view of compensation, making it especially useful for international hiring and reward strategy planning.
At Mauve Group, we support organisations in building competitive and compliant compensation frameworks across global markets.
Our salary benchmarking services, combined with our global payroll, EOR, and HR consulting solutions, help businesses understand market pay levels, manage international expansion, and maintain global compensation consistency.
With access to reliable market data across 150+ countries, Mauve Group enables employers to make informed decisions about compensation packages for both local and international staff.
- Salary benchmarking: comparing internal salaries with market rates for fairness and competitiveness.
- Compensation analysis: evaluating salary structures and total rewards strategies.
- Salary benchmarking tool: technology used to gather and analyse global compensation data.
- Global payroll services: coordinating payroll across multiple countries and currencies.
- Pay equity analysis: assessing pay fairness across employee groups.
- HR data analytics: using data insights to improve HR and compensation strategies.