Compensation Benchmarking: How to Compare Salaries with the Market

Benchmarking salaries against the market is the foundation of comp strategy. Data sources, how to read them, and mistakes that lead to bad decisions.

HR teams that answer "what does the market pay for this role?" based on gut feel or a recruiter network give answers that are neither accurate nor defensible. Systematic Compensation Benchmarking, using structured market salary survey data, gives accurate answers and supports important comp decisions. In the candidate-driven market of 2026, where top talent has competing offers, good benchmarking is a tool for preventing attrition.

3 Types of Benchmark Data Sources

Data sources used in Thailand:

Main Sources

1. Paid surveys from consulting firms such as Mercer, WTW and AON for deep data
2. Free sources such as JobsDB reports and LinkedIn Salary Insights for guidance
3. Network and recruiter intelligence for deeper context

Triangulating 2 to 3 sources gives the picture closest to reality. Relying on a single source is often biased by how that source collects its data.

Reading a Salary Survey

Survey reports look complex at first; understanding the framework helps you read them quickly.

Components to Look At

• P10, P25, P50, P75 and P90 for each level
• Base salary vs total compensation including variable pay
• Sample size for each data point
• Industries and company sizes covered
• Geography that matches your company
• Data collection date and inflation adjustment

Looking only at the median is not enough. You need to look at the range to understand how wide the variability in the market is.

Matching Roles to the Survey

Matching your company's jobs to benchmark jobs:

Matching Framework

• Compare the job description in the survey with your own
• Map levels accurately, not by job title
• Scope of work, reporting line and number of direct reports
• Closest industry segment
• Comparable company stage and size

Mismatching makes benchmark figures worthless. Investing time to map roles the first time pays off over the long term.

A good benchmark doesn't tell you what to pay; it tells you where the market is. What you pay is a strategic decision.

Setting Your Pay Position

Once you know the market, you must decide where to sit.

Positioning Options

1. Lead the market at P65 to P75 for scarce skills
2. Match the market at P50 for standard roles
3. Lag the market at P25 to P40, with other attractive benefits
4. Pay for performance: low base plus high variable

The position you choose depends on business strategy, not a strategy in a vacuum. Large tech companies tend to lead the market in critical fields, mid-sized companies usually match, and early-stage startups often lag on base but add equity.

Using Benchmarks in Decision-making

Using the data in real processes:

Main Use Cases

• Designing salary bands for your structure
• Annual comp adjustments in merit reviews
• Responding honestly to counteroffers
• Setting offers for new candidates
• Promotions with pay that suits the level
• Company-wide pay equity audits

Having benchmark data updated annually gives every decision a baseline.

Auditing Yourself After Benchmarking

What to do once the comparison is done:

Internal Audit

• Identify people who are underpaid relative to the market
• Break down gaps by department, level and gender
• Calculate the cost of closing the gaps
• Plan a roadmap to adjust over 2 to 3 merit cycles
• Communicate with managers to manage expectations

Finding large gaps in underrepresented groups is a risk that must be managed proactively. Read Pay Transparency.

Connecting with Comp Strategy

Benchmarking is an input to your entire comp strategy.

It connects with Designing a Salary Structure, which uses benchmarks as its foundation, and Variable Pay Design, which completes total rewards.

Setting up Benefits Employees Want complements benchmarked compensation.

Browse comp specialist courses in Plants.work Learn or talk to a mentor who works in comp on the Mentors page. In short, good compensation benchmarking is the foundation of defensible people decisions. Those who invest in data retain people better and save budget.