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Salary Benchmarking for Recruitment and Retention

What is salary benchmarking?

Salary benchmarking, also referred to as compensation benchmarking, is a process where companies compare their job titles, job descriptions, and pay ranges to similar jobs at other companies in order to identify the market rate for each position. Utilizing benchmark salary data ensures companies are able to attract and retain talent with competitive salaries.

Benefits of Salary Benchmarking:

Understand how to evaluate internal pay scales

Respond to economic factors influencing wages

Enhance employee engagement and retention

Attract candidates with the right skills and experience

Beat the competition with competitive pay rates

4 questions to answer when creating a salary benchmarking plan:

1. Does your company perform regular assessments for employee skills and development?

2. What standard is in place to ensure HR is meeting state and federal regulations?

3. How long has it been since your company has aligned salaries to market standards?

4. Who are the top companies I’m competing against and what are their pay scales?

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What information do you need to begin compensation benchmarking at your organization?

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Understand pay rates in your market.

Access market data to see where your pay rates stack up. Government data and advertised wage data give you a holistic look at compensation throughout your markets. If your pay rate falls in a lower percentile, consider raising your wages in order to find top talent and hire them quickly.

Track wage trends over time for your roles.

In the midst of a global talent shortage, wage growth is happening across industries. To stay competitive, companies need to track how wages are changing to be sure their wages continue to attract top talent. Based on historical trends, see if you’ve remained competitive in the market.

Identify competitor pay rates.

Benchmark your salary rates against competitors' to attract and retain talent. Compare your internal positions and internal job descriptions with similar jobs on the market. Hone in on advertised pay rates for your industry's competitors as well as other companies who are posting for the same talent.

Benchmark talent availability at your price points.

Pay rate will determine the talent you have access to. When you understand the supply of talent available at a given wage rate for each position, you can advertise wages to access the experienced and skilled talent you need.

Customer Success Story

JB Hunt, a large trucking and logistics company

needed a way to capture current recruiting wages efficiently within their markets. In order to stay an industry leader, they required bid perspective and pay accuracy. With Lightcast’s expert guidance, they saw success in recruiting by changing their pay bands. JB Hunt was able to successfully hire 18,000 new truck drivers in 2022 with a 50% retention rate (far out-pacing the industry average turnover of 102%).

Read the Case Study

Lightcast is helping businesses create competitive salaries.

A national dental company

used Lightcast compensation data to fill 75% of open jobs in a tough market, making almost 1,000 hires in a single year by relocating talent and updating compensation based on local data.

A multinational tree care and landscaping company

needed insight into competitor compensation rates. They connected with Lightcast experts to get a deeper understanding of salary analysis. Digging into niche markets, they were able to use Lightcast Occupation Taxonomy to cluster “like” roles for their compensation study.

See what you can do with Lightcast.

Get a free sample report with the latest compensation data.

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Find the Right Solution

API

Integrate Lightcast compensation data into your hiring system and strategy to find the right talent at the right price.

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Software Solutions

Use actionable wage data to inform talent acquisition strategies, optimize job postings, and target the right markets.

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Workforce Consulting

Optimize your compensation benchmarking process with custom data sets, personalized analysis, and targeted recommendations.

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Salary benchmarking data allows human resource professionals to create competitive salaries to attract and retain talent.

Companies who measure their wage rates against market data will attract higher quality candidates. Continuously monitoring internal wage rates is just as important to retaining workers in a tight labor market. Companies need to make sure the salary range for their specific roles align with market standards to ensure they don’t lose valuable talent to their competition. Understanding the latest wage and workforce trends is a crucial part of a competitive compensation strategy. In order to make the right compensation decisions, you need salary benchmarking tools with the right data.

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Solutions for Salary Benchmarking

Understand what other companies are paying for similar jobs.

Access current advertised salaries being offered by companies who are competing for the same talent to offer competitive salaries.

Apply skills and experience levels to salary decisions.

Every skill has value attached. Specific skill sets along with required experience and other qualifications inform wage observations.

Compare salaries relating to specific job titles in multiple markets.

Compare internal wages for the same job title across regions to set expectations when entering a new market or figure out why you might be struggling in a current one.

Consider historical salary information based on geographic location.

Historical wage trends provide helpful context for evaluating prevailing wages and provide additional guidance for strategic location decisions.

Learn more about salary benchmarking.

Schedule a time to talk with a member of our team. We'd love to show you how Lightcast can help you make informed compensation decisions.

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