Global Employment Benchmarking Free Report: Understanding True Compensation Costs

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Working with global clients around the world gives us a unique perspective on global employment, allowing us to benchmark employment attributes between countries, continents, and industries. That is why we created a report that reveals benchmarking for total employment costs around the world based on an annual salary of $100,000 USD.

We analyzed the costs between different regions, here are some of the insights we found:

  1. Geographical Variation in Total Employment Costs: A $100K salary doesn’t mean the same thing everywhere. When it comes to total employment costs, countries in the EMEA region exhibit a diverse range of figures beyond the base salary.
  2. Hidden Costs Beyond Base Salary: The headline figure of a $100K salary is just the tip of the iceberg. Factors such as social security, health insurance, and pension contributions significantly influence the overall employment cost.
  3. The Complexity of Employment Cost Breakdown: Each country has its unique structure of employment-related contributions. Whether it’s the UK’s emphasis on Social Security or Germany’s health insurance contributions, understanding these nuances is crucial for businesses and employees alike.

Here is the total employment costs for 9 countries. Get a free copy of our 100K benchmark report

Salary benchmarking is the process of comparing one company’s job descriptions and pay ranges to similar jobs in other organizations. The goal of benchmarking is to understand the average salary for a position in order to retain employees and attract talent.

Why is salary benchmarking important?

In an era where professionals increasingly value global mobility, compensation benchmarking plays a pivotal role in not only attracting talent from a broader spectrum of applicants but also in facilitating entry into new markets. Moreover, the significance of salary benchmarking extends beyond just competitive compensation; it becomes a cornerstone when organizations are dedicated to diversity, equity, and inclusion (DEI) initiatives.

For instance, a study highlighted that pay transparency can augment the likelihood of women securing positions in occupations with wages above the median by 5%, thereby helping to bridge the gender wage gap. Furthermore, despite only 32% of employees, as per Gartner’s findings, believing that their compensation is fair, a transparent salary structure guarantees that individuals in identical roles aren’t subjected to pay discrepancies. This transparency is also instrumental in combatting racial disparities in wages.

As reported by The Department of Labor, black women, in the previous year, earned approximately 88% of what their white counterparts received. Such disparities can be mitigated when companies maintain openness about their compensation structures, reducing the potential for racial discrimination in pay.

What is a salary benchmarking process?

Salary benchmarking is a method where internal compensation data is collected and juxtaposed against salaries for analogous roles in other organizations. HR and People Operations teams utilize this approach to ensure that they provide competitive remuneration, encompassing both salaries and benefits, thereby helping in talent retention.

In the same manner that companies perform performance review calibrations to maintain consistent and fair evaluations of their employees, salary benchmarking is carried out to guarantee equitable compensation across the board.

How to implement a beneficial salary benchmarking system

Implementing an effective salary benchmarking system is integral for companies to ensure competitive and fair compensation for their employees. Here’s a step-by-step guide to establishing such a system:

  1. Draft a Comprehensive Plan: Begin by designing a thorough salary benchmarking plan. This plan should detail both long-term and short-term objectives, set out a clear timeline, allocate a budget, list required resources, and state the overall purpose.
    This foundational plan provides compensation managers with a structured approach to set competitive salary benchmarks for every job role. While the plan acts as a guiding principle, remember that it can be adjusted over time to accommodate changing business needs or industry standards.
  2. Establish Clear Job Descriptions: Before diving into salary benchmarking, ensure that each role within the company has a clear and detailed job description. Job titles can vary across organizations, even for similar roles, making descriptions critical for identifying equivalent positions.
    For instance, a company may have roles labeled “Sales Managers” and “Customer Success Engineers.” Despite the differing titles, their responsibilities might overlap significantly. As a guideline, HR professionals should, as suggested by, compare roles that share a resemblance in at least 80% of their duties and requirements.
  3. Select Reliable Data Sources: The validity of your salary benchmarking relies heavily on the quality of the data you use. It’s essential to draw from trusted data sources with a robust benchmarking methodology. Potential sources can range from domestic and international surveys to consolidated data provided by employers. Some businesses also consider data from employee-driven crowdsourcing platforms to enhance their insights.
  4. Adopt Your Compensation Philosophy as a Guideline: A company’s compensation philosophy is a reflection of its values, budget, and approach towards employee remuneration. By juxtaposing this philosophy with external salary benchmarks, compensation managers can formulate salaries that are not only competitive but also resonate with the company’s ethos.
    Consistently applying a well-defined compensation philosophy can enhance a company’s reputation and improve overall employee satisfaction.

By diligently following these steps, companies can set the groundwork for a salary benchmarking system that is both accurate and aligned with their organizational values.

A step-by-step guide to conducting salary benchmarking

To create accurate benchmarks, companies can follow a few basic steps:

Step 1: Identify the purpose and necessary resources

When conducting salary research, it’s helpful to think about both short and long-term goals for a focused strategy. For example, a short-term goal may be to create a standard salary for content writing positions within the marketing team for various experience levels, while long-term goals may be to retain talent.

Then once businesses have a clear goal in mind, they can narrow down which resources they’ll need and a budget after collecting market insights.

Step 2: Gather data

The next step is gathering the right data. Companies can start by listing every position within the organization.

The main areas to focus on include:

  • Main responsibilities and roles
  • Whether the person is on a managerial or process management track
  • The seniority level (including qualifications and experience)
  • The location (especially if the company has a global workforce, it may not make sense to pay someone living in New York City the same as an employee working out of Lima)

When examining what salaries look like in specific industries and locations, companies can utilize sources such as Glassdoor, Reed, Indeed, information from their employee Net Promoter Score (eNPS) and employee engagement surveys, as well as government labor market data.
To remain competitive and attract and retain talent in a specific market, businesses can focus on data in the median of the market. Analyze the collected data to pinpoint gaps between your organization’s salaries and the market rates for similar positions.

Step 3: Address any gaps

Create a plan to correct any gaps in salary to ensure your company offers competitive and fair compensation. That may mean adjusting the salaries of certain positions, developing salary ranges, or implementing other strategies, such as incentives that compete with market rates.

Step 4: Be transparent with employees about the process and salaries.

After defining the compensation strategy, be transparent about the outcome to employees and applicants. Explain what the business can offer and why, providing opportunities for potential hires and employees to give feedback. Clearly communicate the potential growth paths, working conditions, and market rates so professionals understand the reasoning behind your offerings.

Step 5: Periodically repeat the process

While benchmarking, monitor the process and results to work out any kinks. Then, repeat the process quarterly or bi-annuall to make sure the company stays aligned with market or economic trends.


What is a salary benchmarking tool

Salary benchmarking tools are software or online platforms that help companies gather, analyze, and utilize data regarding salaries of similar positions within an industry. One example of a salary benchmarking tool is Papaya’s center of excellence where businesses can get up-to-date advice on whether their compensation and benefits are competitive with market standards or trends.

What is job benchmarking?

Job benchmarking is the practice of comparing your organization’s job descriptions and responsibilities to similar roles in different companies. One of the primary goals with job benchmarking is to optimize job descriptions and effectively hire the right people for the position. By defining a role, companies can clarify the needed qualifications and appropriate salary for each position, helping them optimize the hiring process.

What are three characteristics of a benchmark job?

A benchmark job will have the following characteristics:

  • A well-defined description that’s relatively matches similar jobs
  • Commonality with most of the firms within the industry
  • Held by many professionals

A benchmark job has a standard set of responsibilities from one organization to another. To identify a benchmark job, companies must gather data from reliable sources to determine common job attributes.

What is the difference between job evaluation and benchmarking?

A job evaluation process helps determine the value of a job compared to other jobs within an organization. It provides a hierarchy of roles that’s fair and free from discrimination.
Benchmarking helps companies compare their job roles to those in other companies from similar or competitive industries.