How to Find Data for Salary Benchmarking: 3 Options to Choose From

June 10, 2024
.
4
min read

Share

Table of contents

Author

If your salaries aren’t aligned with the market, you’ll see big problems with attracting and retaining talent. After all, today’s employees are more and more aware of their worth — and they’re not likely to stick around if they know they can get more elsewhere. 

The solution? Salary benchmarking. By comparing your salaries with the market median for each role, you can ensure your pay is fair and competitive — and keep top talent around for longer. 

But there’s one problem: you need accurate, up-to-date information on the salaries other companies are paying. In this article, we’ll talk through three tools you can use to find data for salary benchmarking — including Figures. 

Why bother with salary benchmarking?

Salary benchmarking isn’t just a boring HR exercise. In fact, it could be crucial to your business’s success. Because if you’re not conducting salary benchmarking, you still have to decide what to pay your employees. 

At best, that might mean relying on the expertise of your hiring managers, recruiters and leaders. But, while these people surely have valuable insights to share, no one can keep up with the constantly changing market salaries for hundreds of different roles. 

In many companies, the reality comes down to pure guesswork. And if you guess wrong, there can be serious consequences for your business, either in terms of overspending if you pay too much, or talent attraction and retention if you pay too little. 

And there’s another important factor too: pay equity. When your salaries are purely based on intuition, there’s a huge potential for bias. Over time, this can widen your gender pay gap and worsen other forms of pay inequity. 

With the EU pay transparency directive just around the corner, your pay practices are about to get a lot more public — and you can’t afford to get it wrong. Salary benchmarking is essential if you want to ensure your compensation is fair, competitive and compliant. 

Where to find salary benchmarking data 

To conduct salary benchmarking, you need data. And you need to be sure that data is accurate, up-to-date and relevant to your organisation. Ideally, it should come in a digestible, accessible format that’s easy to understand. 

The old-fashioned way to get your hands on this data is to pay for a salary survey conducted by a big consulting firm like Mercer or Willis Towers Watson. You could also try and muddle through with self-reported data from sites like Glassdoor or Indeed. Or, you could use a tool like Figures for real-time access to accurate market data — plus the tools you need to filter, sort and understand it. 

We’ll talk through those three options in a bit more detail below — though there are no prizes for guessing which one is our favourite. 

{{cta}}

Option #1: User-generated data 

E.g. Glassdoor, Indeed, Reed, Levels.fyi

Many online job boards now allow employees to submit their own salaries, which they then turn into an average for each role and location. In theory, you could use this salary data to benchmark your salaries. 

However, while this can be a useful starting point when it comes to understanding the market rate for certain roles, this data is really intended to help jobseekers work out if their salary expectations are realistic. 

That means it’s not a good resource for a company-wide salary benchmarking exercise, for a few reasons: 

  • Self-reported data might be inaccurate: Since these websites don’t usually verify the salaries that users submit, there’s no real way of knowing whether they’re accurate. Plus, there’s a lack of consistency in what elements of pay are reported. Some employees might input only their base pay, while others include things like bonuses and commissions. 
  • Averages hide the real numbers: Sites like Glassdoor and Indeed typically provide you with an average figure representing all the salaries they’ve collected for each role. This is a useful starting point, but it should be treated with caution since outliers can significantly skew the results. For effective salary benchmarking, you’ll need access to the full range and the market median, not just the average for all employees. 
  • Averages incorporate historical data: The salaries displayed on these sites are usually an average of all figures that have ever been submitted for each role — meaning that the numbers you see include data that could be years out of date. This means the average is unlikely to be accurate to today’s market — particularly for fast-moving roles.  
  • Not specific enough for nuanced comparison: When benchmarking salaries you need to make sure that you’re comparing like for like. That usually means only benchmarking against companies of the same size, funding stage and location as yours. It may also mean comparing within your industry, or with other companies you’re competing against for talent. However, sites like Indeed and Glassdoor typically only give you an average salary for each role across all companies — which isn’t very useful.

Option #2: Salary survey reports 

E.g. Mercer, Radford, Willis Towers Watson

The traditional way to source data for salary benchmarking is to purchase it from big consulting firms like Mercer and Radford. These companies carry out annual surveys that ask a range of companies for details about their compensation structures. They then validate, aggregate and anonymise the data, and companies can buy it in the form of a searchable spreadsheet. 

This is a much more sound method than relying on self-reported data, as the information has been verified and cleaned up to make sure it’s consistent and accurate. It’s generally broken down by percentiles, which makes it easier to benchmark your salaries against comparable companies. 

However, there are also some major downsides to this approach: 

  • It’s expensive: Salary survey reports tend to be the most expensive option when it comes to salary data. The companies that provide them have been around for a while, after all — and they can afford to charge big bucks. You may also have to pay extra if you want to access additional datasets, like data for different industries. 
  • Data might not be relevant: Again, a key part of salary benchmarking is ensuring you’re comparing your salaries with those at comparable companies. But the consultancies that run these surveys tend to attract very large organisations, which means the results are skewed towards the enterprise level. If you’re a start-up or mid-sized company, the data might not be relevant to your situation. 
  • Data is outdated by the time you see it: The biggest problem with relying on salary surveys for benchmarking data is that they only provide a snapshot of what salaries looked like at the moment the survey was completed. And, since this data takes several months to collect, sort, clean and aggregate, it will already be well out of date by the time you’re looking at it. This can be a big problem in fast-moving industries where salaries evolve quickly. 
  • Data is difficult to handle: When you buy a salary survey, you usually receive it in the form of a spreadsheet. And we’re talking about a LOT of data here… so that means a lot of cells, columns and rows to sift through. For anyone who’s not an Excel expert, this can be tricky to make sense of. 
  • Requires survey participation: Companies that want to access survey data are often required to participate in the survey itself. While this isn’t necessarily a problem (sharing is caring, after all), it does mean preparing and submitting a lot of data and ensuring your job levelling structure is in line with the survey’s requirements. For smaller companies, this can be very labour-intensive.

Option #3: Modern salary benchmarking solutions 

E.g. Figures! 

So, if self-reported data is unreliable and salary surveys are expensive and outdated, what’s the alternative? Figures, of course! Figures is a compensation management platform that makes benchmarking salaries against 1000+ European companies quick and easy. 

Here are some of the advantages of using Figures for salary benchmarking: 

  • Real-time, relevant data: At Figures, we’re all about sharing. Our data is collected through our clients’ HRIS systems, and is updated daily — so it’s about as close to ‘real-time’ as you can get. 
  • Intuitive, user-friendly platform: With Figures, there’s no more grappling with unwieldy, complex spreadsheets. Our platform is designed for anyone to use — even if you’re not an Excel whiz. 
  • Tailored results for fair comparison: When you benchmark salaries with Figures, you can filter results by industry, location, job level and more, to make sure you’re always comparing apples with apples. Want to know how it works? You can play around with a mock-up of our app here.  
  • Insights and analytics: Figures does more than just provide salary benchmarking data. It can also give you valuable insights and analytics that ensure every decision is driven by data, not guesswork. 
  • Full visibility over your compensation structures: You can use Figures to see a global overview of all of your employees, or zoom in on specific teams, departments or individuals. Figures will highlight those employees whose pay is below market so you can correct it. 

{{cta}}

Not just a salary benchmarking tool

At Figures, we’re proud of our salary benchmarking capabilities, but that’s not all we can do. Figures is a comprehensive suite of compensation management tools, rolled together into one user-friendly platform. 

You can use Figures to benchmark your salaries, yes. But you can also create salary bands for your whole organisation in no time, and even manage your entire compensation review process through our platform. 

Essentially, Figures gives you everything you need to ensure your compensation structures are fair, consistent, equitable and competitive.

Join the Compversation

Subscribe to the most read bi-monthly newsletter by the French Comp & Ben

Work email
Thank you! Our team will get back to you shortly!
Oops! Something went wrong while submitting the form.
Discover our product

Build a fair compensation strategy with our all-in-one compensation platform

Get started
Error text
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Related posts

Illustration Blogpost
Compensation

How to Support Employee Financial Wellness

In this article, we’ll discuss some of the practical resources you can put in place to help your employees, plus the effects that widespread financial stress can have on an organisation. 
Read more
Illustration Blogpost
EU Pay Transparency

The State of Pay Transparency in Germany in 2024

Read on to find out about the current state of pay equity and transparency in Germany, including the laws that employers have to follow. We’ll also share some insights from our friends at Personio.
Read more
Illustration Blogpost
Compensation

How to Find Data for Salary Benchmarking: 3 Options to Choose From

By comparing your salaries with the market median for each role, you can ensure your pay is fair and competitive — and keep top talent around for longer. 
Read more