What is Compensation Benchmarking?
Compensation benchmarking is the process of comparing an organization’s pay structures and benefits packages against market data and industry standards. This practice helps organizations ensure their compensation offerings are competitive, equitable, and aligned with talent acquisition and retention goals.
Benchmarking involves analyzing salary surveys, industry reports, and regional wage data across similar roles, industries, and company sizes. Organizations use these insights to adjust compensation strategies, identify pay gaps, and make informed budgeting decisions.
Effective compensation benchmarking supports fair pay practices, enhances employer competitiveness, reduces turnover risk, and ensures compliance with pay equity regulations while managing compensation costs strategically.
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