You find the perfect candidate.
They’ve aced every interview, impressed your team, and are about to sign on.
Then it happens.
You send the offer, they see the number, and suddenly they’re “thinking about it.” Before you know it, they’ve taken another job.
This is what happens without salary benchmarking. You can’t just guess at compensation and hope it works.
You need data and strategy to understand competitive pay.
Let’s look at how to attract and keep top talent without losing them to better offers.
What is salary benchmarking?
Employee compensation plays a critical role in talent retention, with 63% of employees citing pay-related concerns as a primary reason for leaving their jobs.
The financial impact of turnover is significant—replacing a single entry-level employee earning $20,000 annually can cost between $6,000 and $10,000 in recruitment, training, and lost productivity.
Salary benchmarking ensures that organizations offer competitive compensation by systematically researching and comparing salaries across industries, job roles, and locations.
Without this process, businesses risk either underpaying skilled professionals—making it difficult to attract and retain top talent—or overcompensating for roles, leading to unnecessary financial strain.
Think of salary benchmarking as the equivalent of researching market prices before making a major purchase.
Just as no one would buy a high-value item without checking its market value, companies should not set salaries arbitrarily.
Without benchmarking, businesses may unknowingly overpay for junior positions or undercompensate high-performing employees, resulting in disengagement and attrition.
Salary benchmarking is beneficial and essential for organizations seeking to attract, retain, and motivate top talent.
1. They stay competitive
A competitive compensation package is essential for attracting qualified candidates.
When competitors offer superior remuneration, top talent gravitates toward those opportunities.
Comprehensive salary benchmarking ensures your organization remains competitive in the talent marketplace, preventing the loss of exceptional candidates due to outdated or uncompetitive compensation structures.
2. They keep pay fair
Internal compensation equity is critical for maintaining organizational morale and trust.
When employees discover significant disparities in compensation for similar roles and responsibilities, it can create tension and diminish workplace satisfaction.
Strategic salary benchmarking helps organizations establish consistent compensation practices, ensuring equitable pay structures across comparable positions.
This approach minimizes potential workplace conflicts, fosters a culture of transparency, and strengthens employee trust in organizational leadership.
3. They avoid losing people over salary dissatisfaction
Inadequate compensation significantly impacts retention, with 44% of organizations experiencing talent loss due to non-competitive salary offerings.
While employees generally prefer stability, those who perceive themselves as undercompensated are more likely to pursue alternative employment opportunities.
Comprehensive salary benchmarking enables organizations to establish appropriate compensation levels that enhance employee satisfaction and engagement, thereby reducing voluntary turnover.
At its core, salary benchmarking is about getting pay right, not too high, not too low, but just right.
What makes salary benchmarking important?
1. Attracts top talent
Outdated compensation structures significantly reduce the attractiveness of job postings in today’s competitive market.
When candidates see substantial gaps between your salary offerings and industry standards—especially when competitors offer higher compensation and better benefits—your ability to attract qualified talent diminishes considerably.
Compensation remains a decisive factor in candidate decision-making.
While organizational culture, engaging projects, and mission are important, they rarely overcome below-market compensation offers.
Today’s job seekers conduct thorough research and employ strategic negotiation tactics when evaluating opportunities.
Organizations offering substandard compensation will consistently lose high-caliber candidates to competitors with more competitive packages.
2. Reduces employee turnover
While workplace culture and management quality significantly impact retention, inadequate compensation remains a primary driver of employee turnover.
Organizations may invest in attractive amenities and team-building initiatives, but competitive compensation is fundamental to employee satisfaction.
Salary benchmarking ensures your compensation structure aligns with current market standards rather than perceived competitiveness.
When employees receive fair market-rate compensation, their engagement and productivity increase, and they demonstrate greater organizational commitment.
Preventable turnover due to compensation disparities represents a significant yet avoidable cost to organizations committed to talent retention.
3. Promotes pay equity
Compensation disparities between colleagues in similar positions create immediate tension and diminish workplace morale.
When employees discover significant pay inequities, the resulting discomfort undermines team cohesion and organizational trust.
These situations, while uncomfortable, are entirely preventable through systematic salary benchmarking.
Effective compensation analysis ensures equitable remuneration for employees with comparable roles, experience levels, and responsibilities.
Beyond the immediate impact on employee sentiment, unaddressed pay disparities present significant risks including potential legal liabilities, increased turnover rates, and reduced employee engagement.
Contemporary employees consider fair compensation a fundamental expectation rather than a privilege.
Organizations failing to maintain equitable compensation structures risk losing valuable talent to competitors who prioritize transparent and fair remuneration practices.
Ultimately, compensation equity serves as a cornerstone of employee retention, motivation, and sustained organizational performance.
4. Boosts company reputation
Employee dissatisfaction with compensation quickly becomes public knowledge through workplace review platforms and professional networks.
Underpaid employees share their negative experiences through critical online reviews and direct communication with potential candidates, damaging your employer brand.
In today’s information-rich recruitment environment, candidates thoroughly research potential employers before application, often avoiding organizations with reputations for inadequate compensation.
Companies recognized for fair compensation attract candidates more effectively and experience lower turnover rates than those known for substandard pay practices.
Negative compensation reputations are difficult to overcome once established in the talent marketplace.
5. Helps to budget more effectively
Let’s break it down.
Say you’re hiring for a key role.
You have two choices:-
- Offer a salary way below market rate. Congratulations! You’ve just saved the company some cash… and also ensured that no top candidate will accept the offer. Back to square one.
- Throw an absurdly high number at the candidate just to secure them. Great! You’ve hired someone amazing… but now your payroll budget is bleeding money, and existing employees are wondering why their paychecks don’t match.
Neither of these options is ideal and salary benchmarking helps you avoid both.
By knowing exactly what the market is paying for a role, companies can:-
- Set competitive yet sustainable salaries: So they attract top talent without overpaying.
- Ensure internal pay consistency: So employees don’t start comparing salaries like it’s an episode of Shark Tank.
Allocate budgets strategically: So payroll doesn’t become an unpredictable mess of underpaid employees and overpaid panic-hires.
6. Prevents legal and compliance issues
Inadequate compensation practices present significant legal risks for organizations.
Wage disputes, pay discrimination allegations, and labor law violations result in costly litigation and substantial reputational damage.
Public legal proceedings regarding compensation inequities create particularly damaging publicity that can significantly impact employer brand perception.
Effective salary benchmarking serves as a preventative measure against legal exposure by ensuring compensation practices align with industry standards, regulatory requirements, and equity expectations.
Organizations with inconsistent salary structures face increased vulnerability to discrimination claims, particularly when compensation disparities correlate with protected characteristics.
Compensation practices that fail to meet minimum wage requirements or other statutory obligations expose organizations to regulatory penalties and enforcement actions.
Conversely, organizations implementing comprehensive salary benchmarking maintain regulatory compliance, market competitiveness, and legal risk mitigation simultaneously.
7. Encourages employee productivity and satisfaction
Perceived compensation inequities among employees performing similar roles significantly impact workplace engagement and retention.
Employee perceptions of fair compensation directly correlate with their sense of organizational value and recognition.
When professionals receive market-competitive compensation, they demonstrate higher levels of engagement and commitment rather than allocating time and attention to external employment opportunities.
Employees experiencing compensation dissatisfaction often exhibit diminished engagement and productivity long before their formal departure from the organization.
This disengagement represents a substantial operational cost through reduced productivity and eventual replacement expenses when retention efforts fail.
Still think winging it is an option? Your competitors don’t.
Organizations that implement effective salary benchmarking strategically position themselves as preferred employers within the talent marketplace.
These companies consistently attract high-caliber candidates, maintain stronger employee engagement, and develop reputations as desirable workplaces among professional networks.
Conversely, organizations neglecting comprehensive compensation analysis frequently experience elevated turnover rates, creating perpetual recruitment cycles as employees regularly seek better opportunities elsewhere.
These companies often advertise “competitive compensation” while offering remuneration packages that fail to meet market expectations.
The strategic implications are clear: organizations can either implement structured compensation practices based on reliable market data or accept the unpredictable consequences of unplanned compensation approaches.
Meanwhile, industry competitors are not relying on chance—they are conducting systematic analysis to ensure their compensation structures effectively attract and retain valuable talent.
Factors that influence salary benchmarking
Salary benchmarking isn’t as simple as typing “How much does a software engineer make?” into Google and running with the first number you see.
If it were that easy, HR teams wouldn’t spend hours analyzing pay data, and job seekers wouldn’t be side-eyeing their offers wondering if they’re getting shortchanged.
1. Industry trends matter
Marketing managers earn significantly more at Silicon Valley tech startups than at independent bookstores.
This compensation gap reflects industry standards rather than skill differences.
Technology, finance, and healthcare sectors offer higher salaries due to greater resources and intense talent competition.
Non-profit, education, and arts organizations compensate with meaningful work, flexibility, and specialized benefits rather than competitive salaries.
Industry compensation trends evolve rapidly, with AI and cybersecurity specialists now commanding premium salaries previously associated with software developers.
Effective benchmarking must consider both job requirements and industry context when establishing compensation structures.
2. Location can make or break a paycheck
Location significantly influences compensation structures for identical positions across different regions.
A software developer receives substantially different compensation for the same role in New York City versus Kansas due to regional economic factors.
This disparity reflects varying costs for essentials like housing, groceries, transportation, and daily expenses across different geographic markets.
Organizations incorporate these regional economic differences when establishing compensation structures to ensure employee purchasing power remains relatively consistent despite location variations.
High compensation in expensive metropolitan areas often provides less disposable income than moderate salaries in regions with lower living costs.
Remote work has complicated traditional location-based compensation models, creating strategic questions about appropriate salary determination.
Some organizations implement location-adjusted compensation, reducing salaries when employees relocate from high-cost to lower-cost regions.
Other employers maintain consistent compensation regardless of employee location, while many organizations continue developing hybrid approaches to address this evolving challenge.
Geographic considerations represent a critical variable in effective salary benchmarking.
3. Company size and resources play a big role
Early-stage ventures generally cannot match the comprehensive compensation packages offered by established technology corporations.
Startups typically lack resources for significant financial incentives such as substantial signing bonuses, premium benefits, or extensive workplace amenities.
This compensation disparity, however, does not eliminate smaller organizations from talent competition.
Emerging companies develop alternative compensation strategies focusing on equity participation, scheduling flexibility, location independence, accelerated advancement opportunities, and meaningful participation in organizational decision-making.
While large corporations leverage financial resources to provide premium compensation packages and extensive benefits, they often present structural challenges including organizational complexity, limited advancement velocity, and reduced individual influence on company direction.
Smaller organizations compensate for lower base compensation through non-monetary incentives including workplace flexibility, entrepreneurial culture, and potential equity appreciation.
4. Experience and skills
Compensation offers vary significantly based on candidate qualifications and experience levels.
Entry-level professionals with recent educational credentials and limited practical experience receive substantially different compensation packages than seasoned professionals with extensive industry experience.
Experience value is measured by demonstrated impact rather than duration alone, with professionals who have established records of problem-solving, leadership, and revenue generation commanding premium compensation.
Specialized skills significantly influence compensation structures, particularly those with limited availability in the talent marketplace.
Professionals possessing rare technical capabilities, advanced specialized credentials, or high-demand certifications can negotiate substantially higher compensation.
Effective salary benchmarking incorporates both experience depth and specialized skill assessment when establishing appropriate compensation levels.
5. Market demand
Ever wonder why some roles come with jaw-dropping salaries while others don’t quite hit the same numbers?
It all comes down to demand.
When a profession is booming, salaries naturally rise because companies are competing for top talent.
Think about data scientists, AI engineers, and cybersecurity experts: these professionals are in such high demand that businesses are rolling out competitive offers, complete with impressive salaries, bonuses, and perks to attract the best of the best.
It’s not just about hiring, it’s about securing talent in a highly competitive market.
And just like fashion trends, the most sought-after roles change over time.
One year, UX designers are the talk of the industry; the next, blockchain developers are the ones getting all the attention.
As new technologies and business needs evolve, so do salary trends.
Of course, when demand for a role stabilizes, so do salaries.
If more professionals enter the field or the need for a certain skill set shifts, pay scales adjust accordingly.
That’s why salary benchmarking is crucial.
It ensures businesses stay informed and competitive while helping professionals understand the true market value of their expertise.
At the end of the day, companies will always invest in the skills that drive their business forward, and salary benchmarking helps them do just that.
Salary benchmarking isn’t some plug-and-play equation where you punch in a job title and instantly get the perfect number.
It’s a strategic balancing act.
Industry trends, location, company size, experience, and market demand all come into play, shaping what’s fair and competitive.
Get it wrong, and you risk watching top talent slip through your fingers, accepting better offers elsewhere.
But get it right?
You’ll have a motivated, engaged workforce that actually wants to stick around.
Because they know they’re valued, not just with words, but with a paycheck that reflects their worth.
How to start with salary benchmarking
Salary benchmarking might sound like something that requires a PhD in Data Science and an unhealthy love for spreadsheets, but trust us, it doesn’t have to be that complicated.
You don’t need to turn into a full-time number cruncher or hire an elite squad of compensation analysts to get it right.
Think of it like planning a vacation.
You wouldn’t just guess how much flights, hotels, and food will cost.
You’d check prices, compare deals, and make sure you’re not overpaying (or setting yourself up for a nasty surprise).
Salary benchmarking works the same way.
You’re gathering intel to ensure your company’s paychecks aren’t out of sync with reality.
With the right approach, you can find fair, competitive salaries without spending hours lost in a maze of data.
No stress, no guesswork.
Just a clear roadmap to getting compensation right.
Let’s break it down, step by step.
Step 1: Identify key roles
Before you dive headfirst into benchmarking every single role- from your summer intern to the CEO, take a step back.
Not all roles need the same level of attention, and trying to analyze everything at once is a one-way ticket to data overload.
Instead, focus on the positions that matter most to your business.
Here’s how to prioritize like a pro:-
- Start with high-impact roles: Some jobs keep the lights on. Your sales reps are bringing in revenue, your engineers are building the product, and your customer service team is keeping clients happy. If these roles aren’t compensated competitively, your entire business feels the heat.
- Watch out for high-turnover positions: If a role has more ex-employees than current ones, something’s off. Sure, it could be management or culture, but low pay is often the silent dealbreaker. Benchmarking helps you see if competitors are offering a better deal, and if it’s time to adjust.
- Struggling to hire? Check niche roles: Some positions are harder to fill than your shopping cart on payday. If hiring for certain skills feels like searching for a unicorn, there’s a chance your salary isn’t hitting market expectations. Benchmarking lets you see if you’re offering enough to attract (and keep) top talent.
- Don’t let leadership fly under the radar: Salary benchmarking isn’t just about entry-level and mid-tier roles. Losing a top executive because a competitor swooped in with a better offer? That’s a disaster. Ensuring competitive leadership pay is all about protecting the company’s long-term success.
Step 2: Gather market data
Now comes the fun part: digging into the numbers.
And no, this isn’t about randomly guessing what to pay and hoping for the best.
To benchmark salaries like a pro, you need real data and not just “My cousin’s friend said software engineers make six figures” kind of intel.
So, where do you find it?
Industry reports, salary surveys, and platforms where professionals spill the details on their pay.
Whether it’s employee-reported data, government statistics, or insights straight from recruiters, the goal is to get a clear, accurate picture of what competitive pay really looks like.
The good news?
There are plenty of tools out there that do the heavy lifting for you.
But remember: Don’t rely on just one source.
Cross-check your data, look for patterns, and make sure you’re getting the full picture before setting those salary numbers.
Step 3: Compare salaries
Alright, you’ve gathered all that juicy salary data—now what?
Time to connect the dots and see where you stand.
Start by looking at the median salaries for each role in your industry and location.
This helps you gauge where your company’s pay sits in the grand scheme of things.
Are you offering competitive rates, or are your employees secretly side-eyeing their paychecks?
Here’s what to watch for:-
- If you’re way below market rates: Don’t be shocked when employees start quietly updating their LinkedIn profiles. Underpaying means you’ll struggle to attract (and keep) top talent. People talk, and salary transparency is a thing now.
- If you’re paying way above market rates: First of all, congrats! You’re either a fantastic employer or, uh, maybe overpaying without realizing it. While paying well is great for attracting top talent, you don’t want to blow your budget unnecessarily, especially if there are other ways to provide value (hello, perks and benefits).
- If you’re right in the sweet spot: Gold star for you! A competitive salary means you’re keeping employees happy while staying financially sustainable. Now, just make sure to review salaries regularly so you don’t fall behind the market trends.
Step 4: Factor in perks and benefits
Salary is a huge part of the equation, but it’s not the only thing that matters.
If you can’t match a competitor’s base salary dollar-for-dollar, don’t panic!
You’ve got other ways to make your offer irresistible.
Here’s how you can sweeten the deal without just throwing money at it:-
- Bonuses & profit-sharing: Because who doesn’t love a little extra cash? Performance-based bonuses or profit-sharing programs give employees skin in the game and make them feel invested in the company’s success.
- Stock options & equity: A great long-term incentive. Employees with a stake in the company are working for their own future. Plus, it’s a great way for startups to compete with big corporations.
- Flexible work policies: Salary is important, but work-life balance is priceless. Remote work, flexible hours, or even a four-day workweek can be a game-changer for candidates who value freedom over a slightly higher paycheck.
- Extra PTO & wellness perks: Burnout is real, and employees will leave if they feel overworked and underappreciated. Offering more vacation days, mental health support, gym memberships, or wellness stipends shows that you actually care about their well-being and not just their productivity.
If you can’t win the salary battle, win the perks battle.
Because sometimes, an extra week of vacation or the ability to work in pajamas trumps a slightly bigger paycheck.
Step 5: Adjust, implement, and stay flexible
Following comprehensive salary analysis and market research, implementing strategic compensation adjustments becomes the critical next step.
Begin by recalibrating compensation structures to align with current market rates.
Address identified underpayment situations promptly to prevent retention issues and employee dissatisfaction.
For positions where current compensation exceeds market rates, evaluate whether these premium rates represent intentional strategic decisions or opportunities for future adjustment.
When budget constraints limit immediate compensation adjustments, develop alternative retention strategies focusing on non-monetary benefits.
These may include workplace flexibility options, enhanced paid leave policies, employee wellness initiatives, and professional development opportunities that provide value without significant financial impact.
Recognize that compensation benchmarking requires ongoing attention rather than periodic implementation.
Market conditions evolve continuously, with skill valuations and compensation standards shifting in response to economic and industry developments.
Maintain current compensation data through regular market analysis to ensure sustained competitiveness.
Effective salary benchmarking supports multiple organizational objectives: enhanced employee satisfaction, streamlined recruitment processes, and market competitiveness.
Top 7 salary benchmarking tools
There are plenty of tools out there designed to make the process of salary benchmarking smooth, simple, and (dare we say) even enjoyable.
Instead of drowning in spreadsheets and manually piecing together market data, these platforms provide real-time, data-backed insights to help you make smarter compensation decisions.
1. PayScale
Think of PayScale as your go-to for real-world salary insights.
It gathers data from employees and employers alike, giving you a holistic view of salary trends across industries, job levels, and locations.
Whether you’re a startup or a Fortune 500 company, PayScale helps ensure your pay is competitive.
2. Glassdoor
Glassdoor, the place where employees spill all the tea about their workplaces, including their salaries.
This employee-reported data is great for getting an insider’s look at what companies are actually paying for specific roles.
Plus, you get salary trends over time and comparisons by experience level.
3. Salary.com
If you like your salary research with extra customization, Salary.com is the way to go.
It offers unique data filters so you can break down salaries by industry, company size, and even benefits.
Whether you want hyper-specific pay data for a niche role or need an overview of industry standards, Salary.com helps you slice and dice the numbers like a pro.
It’s the perfect tool for those who love a deep dive into salary benchmarking.
4. Bureau of labor statistics
If you want rock-solid, no-nonsense salary data, the Bureau of Labor Statistics (BLS) is your best bet.
This is where you’ll find government-approved, heavily researched pay trends across industries, job titles, and regions.
Sure, it may not have the flashy UI of newer tools, but when it comes to accuracy, BLS is as reliable as it gets.
Think of it as the no-frills, all-facts kind of salary benchmarking tool, perfect for HR pros who love data-backed decisions.
5. Indeed
Salary benchmarking can get complicated, but ZipRecruiter keeps it simple.
It compiles salary data into easy-to-digest reports, making it perfect for HR pros who want quick insights without getting lost in endless spreadsheets.
If you need fast, reliable, and easy-to-understand salary comparisons, ZipRecruiter’s got you covered, because sometimes, less data clutter means better decision-making.
Turning salary data into actionable insights
So, you’ve gathered all the salary benchmarking data.
Now it’s time to turn those numbers into clear, easy-to-digest reports that actually help shape your compensation strategy.
Sure, you could go old-school and use Excel to crunch the numbers, but let’s be honest, that’s a one-way ticket to frustration.
Manually plugging in data, double-checking formulas, and cross-referencing numbers across multiple spreadsheets? Big risk.
Compensation management software can take all your salary data, organize it in one place, and create advanced reports without the headache.
- HiBob: Think of it as your all-in-one command center for salary data. No more jumping between a million spreadsheets, just clear, organized insights at your fingertips.
- Workday Compensation: Big company, big data? No problem. Workday dives deep into salary trends and automates compensation planning like a pro.
- SAP SuccessFactors Compensation: Helps you balance competitive pay with budget constraints, so you can reward employees without breaking the bank.
- CompXL: If your company is scaling fast and needs ultra-customizable salary planning, this tool gives you the flexibility to fine-tune every detail.
- Decusoft Compose: Managing complex pay structures, bonuses, and equity plans? Decusoft handles the nitty-gritty so you don’t have to.
- Carta Total Compensation: A must-have for startups and tech companies juggling salaries, bonuses, and stock options—because paying in just “future potential” won’t cut it.
State-by-state salary variations (U.S region)
When benchmarking salaries for US expansion, state-specific factors are crucial in determining appropriate compensation levels.
These variations go beyond simple cost-of-living adjustments and reflect complex economic ecosystems within each state. Key factors influencing state-level salary variations include:
- State tax structures: No-income-tax states like Texas, Florida, and Washington allow for lower gross salaries while maintaining competitive take-home pay. High-tax states like California and New York require higher base salaries to offset increased tax burdens.
- Local labor markets: Competitive markets with high demand for talent, such as California’s tech sector or Massachusetts’ biotech industry, drive salaries upward.
- Industry concentrations: Specific industries dominate certain states, affecting salary levels accordingly (e.g., finance in New York, aerospace in Washington).
- Regulatory environments: State-specific employment laws, minimum wage requirements, and mandatory benefits significantly impact total compensation costs.
Here’s a comprehensive comparison of average salary adjustments needed relative to the national baseline:
| State | % Adjustment from National Baseline | Cost of Living Index |
| California | +25-40% | 151.7 |
| New York | +20-35% | 148.2 |
| Massachusetts | +15-25% | 131.6 |
| Washington | +15-25% | 110.7 |
| New Jersey | +15-25% | 115.2 |
| Colorado | +10-20% | 105.6 |
| Oregon | +10-20% | 130.1 |
| Texas | +5-15% | 91.5 |
| Florida | +5-15% | 97.9 |
| Virginia | +5-15% | 101.8 |
| Illinois | +5-10% | 94.5 |
| Minnesota | +5-10% | 97.2 |
| North Carolina | 0-10% | 94.9 |
| Arizona | 0-10% | 102.2 |
| Utah | 0-10% | 98.4 |
| Ohio | -5-5% | 90.8 |
| Michigan | -5-5% | 89.6 |
(Source: US Bureau of Labor Statistics)
Understanding regional variations in the U.S job market
As we discussed earlier, salary expectations vary across different regions due to cost of living, industry presence, and talent availability.
Below is a breakdown of major US job market regions and their respective salary trends for your idea.
Coastal Tech Hubs (San Francisco Bay Area, Seattle, New York City)
- Tech salaries exceed national averages by 40-60%.
- Non-tech positions see 25-35% higher compensation.
- Seattle: Compensation 25-35% above national averages, lower cost of living than SF.
Northeast Corridor (Boston to Washington DC)
- NYC financial sector salaries: 30-45% above national average.
- Boston biotech and healthcare salaries: 20-30% above national average.
- Washington DC tech corridor: 15-25% above national average.
Southern Tech Hubs (Austin, Miami, Raleigh-Durham, Nashville)
- Austin: Tech salaries 15-20% above national averages.
- Miami: Finance and tech 10-15% premiums.
- Raleigh-Durham: Biotech salaries 5-15% above national averages.
Midwest Tech Centers (Chicago, Minneapolis, Detroit, Columbus)
- Chicago: Fintech salaries 10-20% above national averages.
- Minneapolis-St. Paul: Healthcare salaries 5-15% above.
- Detroit: Autonomous vehicle tech salaries 5-10% above.
Mountain Region Tech Hubs (Denver, Salt Lake City, Phoenix)
- Denver: Tech salaries 10-20% above national averages.
- Salt Lake City: 5-15% above national averages.
- Phoenix: Salaries at or slightly above national averages.
Position-Specific Salary Benchmarks
US salaries vary significantly by role, industry, and experience level. Below are benchmarks across key functional areas.
Executive Leadership (Medium-Sized Companies)
| Role | Base Salary Range | Target Bonus | Expected Equity |
| CEO | $150,000 – $300,000 | 30-60% | 4.0-12.0% |
| CFO | $130,000 – $260,000 | 20-40% | 2.0-5.0% |
| COO | $125,000 – $250,000 | 20-40% | 2.0-5.0% |
| CTO | $140,000 – $275,000 | 25-45% | 2.0-6.0% |
Technology Roles (Software Engineering)
| Level | Base Salary Range | Bonus | Equity |
| Entry Level | $70,000 – $100,000 | 0-10% | 0-0.01% |
| Mid-Level | $100,000 – $150,000 | 10-15% | 0.01-0.05% |
| Senior Level | $150,000 – $250,000 | 15-20% | 0.05-0.1% |
| Principal/Staff | $200,000 – $400,000 | 20-25% | 0.1-0.3% |
Business & Operations Roles (Marketing & Sales)
| Marketing Role | Base Salary | Bonus | Equity |
| Marketing Associate | $60,000 – $80,000 | 5-10% | 0-0.01% |
| Marketing Manager | $80,000 – $120,000 | 10-15% | 0.01-0.05% |
| VP of Marketing | $200,000 – $350,000 | 25-40% | 0.3-1.0% |
| Sales Role | Base Salary | Commission | Equity |
| Sales Rep | $45,000 – $60,000 | 30-50% | 0-0.01% |
| Account Exec | $60,000 – $100,000 | 50-100% | 0.01-0.05% |
| VP of Sales | $200,000 – $350,000 | 50-100% | 0.5-2.0% |
These salary benchmarks provide a comprehensive snapshot of the US job market, ensuring companies make informed compensation decisions based on industry trends, location factors, and competitive positioning.
Final thoughts
Salary benchmarking is a strategic move that ensures your company stays competitive, fair, and appealing to top talent.
Let’s face it, today’s job market is like a buffet of options for job seekers.
If your salary offerings are off, they’ll move on faster than you can say “compensation review.”
In a world where employees are more selective than ever, offering the right salary is a must.
It’s about striking that perfect balance between attracting talent and keeping your budget in check.
So, benchmark smartly, pay wisely, and trust us.
Your employees will stick around and future hires will be lining up.
Because when the numbers work for everyone, it’s a win-win.
Frequently asked questions (FAQs)
1. How often should companies update their salary benchmarking data?
Salary benchmarking should be reviewed at least once a year to ensure compensation remains competitive with industry standards.
However, companies in fast-changing industries like technology or finance may need biannual reviews to keep up with evolving salary trends and talent demand.
2. What are the biggest mistakes companies make in salary benchmarking?
Some of the most common mistakes include:
- Using outdated salary data leading to below-market offers.
- Ignoring regional differences that affect competitiveness in specific locations.
- Overlooking total compensation, such as benefits, bonuses, and equity, instead of focusing solely on base salary.
- Failing to align pay with internal structures, which can create pay gaps and retention issues.
3. How does salary benchmarking impact pay transparency laws?
With more states introducing pay transparency laws, salary benchmarking ensures compliance by providing justifiable salary ranges for job postings.
Companies that accurately benchmark salaries can avoid legal risks, build trust with employees, and attract candidates who appreciate clear compensation expectations.
