Salary Benchmarking is an Important Consideration in Setting Competitive Pay

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Salary benchmarking is a process by which managers match internal jobs and their descriptions to similar jobs and descriptions in a salary survey or other source of market pay data to identify the market pay rate for each position. As one of the MHA’s Endorsed Business Partners (EBPs), Salary.com offers pricing intelligence and strategic solutions to workforce challenges.

In a typical year, annual salary benchmarking helps ensure that an organization’s internal pay rates remain competitive within local pay markets. In 2021, salary benchmarking takes on a new level of importance as organizations have been impacted enormously by the COVID-19 pandemic and undergone major shifts in employment and pay rates. These shifts have not been the same across every industry or job type, so it’s critical to plan benchmarking initiatives using the most current compensation data from trusted sources.

When pricing a new position, it's important to understand not only the key attributes of the positions being considered, but also the best source for the data necessary to conduct an accurate market assessment and salary comparison. The first step in this process is to define the internal position, documenting the key job requirements and attributes in a job description. Then select a relevant data source for the business and compare the jobs and job descriptions there to find the best match for the job being priced. This is critical to an effective salary benchmarking exercise.

MHA members are eligible for discounted prices for Salary.com’s trusted human-resource-sourced data. Special offers from Salary.com allow MHA members to stay competitive and set pay appropriately while being fiscally responsible.

Visit the MHA EBP webpage to learn more about available member resources. Questions regarding the EBP program should be directed to Peter Schonfeld at the MHA.