Simplify Strategic Compensation Decisions for Your Customers With Salary Benchmarking
As organizations of all sizes face inflation, economic uncertainty, and a competitive labor market, every dollar counts. Organizations need to know that they’re paying fairly and competitively. That’s where salary benchmarking comes in.
As organizations of all industries and sizes face inflation, economic uncertainty, and a competitive labor market, every dollar counts. And to make the most of their greatest expense—their people—organizations need to know that they’re paying fairly and competitively. That’s where salary benchmarking comes in.
Your customers know that they don’t just need more data; they need better data. The right salary benchmarks can be transformative, and more and more, they’re looking to their HCM software vendor to provide it.
What is salary benchmarking, and why do your customers want it?
Salary benchmarking is a process of matching internal job descriptions and pay ranges to those from similar jobs in other organizations. Also known as compensation benchmarking, it allows organizations to identify competitive pay ranges, promote pay equity, and comply with pay transparency laws.
A recent study by the National Bureau of Economic Research found that salary benchmarks are used by the vast majority—87.6%—of HR professionals who set compensation at medium and large companies. These salary benchmarks range from employee-sourced websites like Glassdoor, LinkedIn, and Salary.com to self-built analysis of data from sources like the U.S. Bureau of Labor Statistics and SHRM’s Compensation Data Center to vendor–supplied data and analysis tools.
Despite the name, salary isn’t the only variable taken into account. Salary benchmarking looks at job description and compensation alongside company size, location, industry, and required education level. This leads to the kind of fine-tuned insight that organizations can use when requisitioning a new role, hiring a replacement, performing annual reviews, offering raises and promotions, and restructuring.
Organizations can ensure they’re offering employees a salary that is competitive and in line with expectations, which is essential to attracting and retaining high performers. And they can keep an eye on pay equity by using data instead of gut feelings to set pay.
What makes salary benchmarking so difficult?
Creating reliable, actionable benchmarking is no easy feat. It requires the seamless intersection of high-quality data, accurate categorization, and technical upkeep.
First, the data available for benchmarking is often self-reported or gathered through annual surveys, which can make it inaccurate and stale. Without enough volume and recency to inspire confidence, benchmarking data can’t be used to make crucial decisions around compensation. A years-old, too-wide salary range doesn’t help anyone, so reliable, timely, and abundant data is essential.
Categorization is the second challenge, and it’s a thorny one. Did you know there are 40,000 ways to say “software developer”? And depending on the different levels and grades of the position in question, the salary can vary widely. Add in a few more variables—location, industry, B2B or B2C—and the problem only becomes more complex.
Lastly, there’s the technical challenge of aggregating and anonymizing an ongoing feed of data, while ensuring it’s accurate and representative. For software vendors, this adds another task that draws time and attention from the essential work of their solutions.
Salary benchmarking is a continuous, resource-intensive project for software vendors and organizations alike, but it yields major benefits for those that get it right.
How can you make salary benchmarking easier for your customers with Visier?
Your customers can find their own data, build a salary database, and analyze it themselves. There are dozens of articles online ready to help them. But the project requires specialized skills and significant resources—including the hours of time that they’ll be spending tinkering away, outside your solution.
You can make it easier, without diverting resources from your own projects. Visier provides a Salary Benchmarks API that aggregates millions of employee records and allows organizations to compare their compensation data to benchmarking data. Your customers can drill down to filter by various dimensions for more context and answer their burning questions—all within your solution.
Data comes from Visier’s proprietary sources and covers 17 million actual labor records from companies of varying sizes and industries. This includes 9.25 million employees from 15,000 organizations and 500 million distinct salary ranges distributed across five dimensions: industry, company size, location, standard occupation, and career level.
Customers can filter each metric by 10 key dimensions without any constraints, and with 28 industries, 2 company sizes, 650 U.S. locations, roughly 3,000 standard occupations, and 6 career levels, they can pinpoint salary ranges with ease.
Benchmark data is devalued unless it’s updated regularly. Our competitors rely on surveys that need to be completed yearly; even if they offer monthly refreshes, the majority of the contributions are stale. Visier offers quarterly updates from continuous data feeds to keep your customers in touch with sudden market changes.
Don’t let your customers muddle through with flimsy, outdated data when Visier Salary Benchmarks API can make it easy for both of you.
Ready to learn more?
Visier’s Salary Benchmarks API can take the guesswork out of helping your customers make strategic decisions on compensation. For more information, visit https://welcome.visier.com/salary-benchmarks/.
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On the Outsmart blog, we write about workforce-related topics like what makes a good manager, how to reduce employee turnover, and reskilling employees. We also report on trending topics like ESG and EU CSRD requirements and preparing for a recession, and advise on HR best practices like how to create a strategic compensation strategy, metrics every CHRO should track, and connecting people data to business data. But if you really want to know the bread and butter of Visier, read our post about the benefits of people analytics.