The action of benchmarking is to evaluate something by comparing it to a standard. In employment, benchmarking refers to salaries.
Salary benchmarking is usually conducted by HR who look at internal roles and research what the market rates are outside the organisation.
Depending on your sector, salary benchmarking is done annually or every two years. It is important to keep up-to-date with market trends to help you understand what your competitors offer – to guide you to market a job opportunity at the right level. Candidates won’t apply for your vacancy if they feel you are offering below the market rate.
Benchmarking should also look at the total compensation and benefits package, not just the basic salary. Benefits could include a bonus, commission, vehicle or vehicle allowance, fuel, number of holidays, healthcare, etc.
To conduct a salary benchmarking exercise, you will need to identify the roles you want to research and have the job descriptions at hand. Job titles can be misleading and you need to ‘compare apples with apples’. Make sure you understand the following:
- The industry you work in (e.g., retail, marketing, sales, digital agency, etc.)
- The breadth of your organisation (e.g., one site or multi-sited)
- The region you work from (e.g., South East including or excluding London; Midlands; Sussex; etc.)
- Your company’s financial turnover (not essential but some data will divide companies based on these criteria, e.g., less than £Xm; more than £Ym; etc.)
- The main accountabilities of the role you are benchmarking (equivalent job titles, how many direct reports, office based or field based, etc.)
It is not always easy to find direct comparisons but there are platforms out there that are free of charge and who offer a good, solid base to work from. You can also directly look on Indeed, Total Jobs, CV Library, LinkedIn, Glassdoor, etc. – this can be time consuming!
The way to present benchmarking is to show each job title, how much current post holders are paid, the lowest salary you find on the job market, the highest salary, and then calculate the average and the median.
|
Source |
Low |
High |
Average |
Median |
|
Indeed |
45,000 |
50,000 |
47,500 |
45,000 |
|
Indeed |
45,000 |
55,000 |
50,000 |
|
|
Indeed |
40,000 |
40,000 |
40,000 |
|
|
Indeed |
37,000 |
47,000 |
42,000 |
|
|
Wired Sussex |
45,000 |
60,000 |
52,500 |
52,500 |
|
Glassdoor |
50,000 |
62,000 |
56,000 |
56,000 |
At OneHR, we conduct many benchmarking exercises for our clients, in a variety of sectors. Contact us to discuss how we can help.
