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Compensation

Salary Benchmarking

Comparing internal salaries against market rates for equivalent roles.

Full Definition

Salary benchmarking is the process of comparing an organization's salary levels for specific roles against external market data — to ensure pay is competitive enough to attract and retain talent without overpaying. Benchmarking uses salary surveys, market data providers (e.g. Mercer, Willis Towers Watson), and industry reports to establish the market median and percentile ranges. HR teams use benchmarking data to inform pay reviews, set salary bands, and identify roles where pay is lagging the market.

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