Compensation benchmarking tools: why they matter & how data can save the day

Research projected that salaries would outpace inflation in 2024 — but things didn’t shake out that way.* During the first half of the year, salary budgets declined worldwide. Rising costs, recession fears, and inflationary pressures have led many companies to reassess their compensation plans and make “thoughtful range adjustments.”** 

So much market turbulence shows why creating a fixed compensation strategy is challenging — and why having accurate data is crucial. That’s one reason we’re so proud of our ongoing partnership with Mercer, the leading provider of compensation benchmarking information. Mercer data equips our customers with the insights they need to evaluate employee benefits packages and ensure salaries are fair, reflect market trends, and remain competitive. This collaboration supercharges Leapsome’s Compensation module, giving our users an edge for making informed and strategic pay decisions.

* SHRM, 2023

** WTW, 2024

👀 See our partnership with Mercer in action

Take a quick Leapsome product tour and discover how Mercer’s benchmarking data can transform your compensation strategy.

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How benchmarking can elevate your compensation strategy

‍Salary benchmarking compares your company’s pay rates to current market values, accounting for factors like location, cost of living, experience, and job responsibilities. 

Without data-informed benchmarking practices, it’s hard to know if you’re offering compensation packages that are fair and motivating. And if you’re tasked with designing a more effective employee retention policy, benchmarking is a process you shouldn’t neglect.

That’s why Mercer’s compensation data is now integrated into Leapsome’s platform, creating a powerhouse for more data-informed compensation planning. All Leapsome admins can access HR job function benchmarks; access to other roles’ salary benchmarks is available to Compensation module customers as an add-on. These are regularly updated to ensure the data is current and relevant.

Our alliance with Mercer goes beyond numbers; it’s about value, fairness, and strategic growth. With Leapsome and Mercer, you can:

• Refine strategy — Leapsome Compensation, coupled with Mercer’s benchmarking, provides a richer context for strategic pay decisions and financial planning, propelling business growth.
  
  
• Attract and retain top talent — Detailed benchmarking data helps companies offer competitive salary packages that support recruiting and retention while maintaining financial stability.
  
  
• Streamline processes — Our integrated approach simplifies complex compensation processes, increasing efficiency and accuracy for HR teams, as well as allowing them to adjust compensation based on evolving market conditions and dynamics.
  
  
• Drive equity and fairness — In accordance with pay equity and transparency laws, our detailed benchmarks support companies in making fair pay decisions, reinforcing our commitment to fostering diversity, equity, and inclusion in workplaces.
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• ‍Foster a positive company culture — Continuous salary benchmarking contributes to employee engagement and satisfaction while establishing a culture of transparency, fairness, and trust.

“In the current environment, attracting and retaining talent is more vital than ever, and compensation benchmarking forms a crucial part of companies’ overall people strategy.

We see a fantastic opportunity to support Leapsome’s objective to drive employee development, productivity, and engagement by making aspects of our leading compensation data available directly within Leapsome’s immersive digital platform.”

‍— Michael Nash, Commercial Leader, Channel Partnerships (Europe) at Mercer

Examples of how different industries use compensation benchmarks

Companies rely on different benchmark practices depending on the circumstances — for example, to offer higher pay when employees meet specific goals or KPIs or to allow for a higher degree of salary negotiation during the hiring process.

Here are a few industry-specific benchmarking examples to illustrate the above:

• Sales — Sales compensation typically includes base pay and variable compensation intended to motivate sales representatives to meet and exceed sales quotas. Employers may calculate an employee’s base pay based on current market averages across competitors and experience levels.

• HR professionals — Employers may use data like the cost of living and market research to determine base salary benchmarks for HR professionals. They’ll also offer additional incentive pay tied to specific HR-related goals. For example, companies may offer bonuses to entire HR teams that work to increase employee engagement by a specific percentage.

• Software developers — Software engineering is one of the few industries that may practice collaborative benchmarking, where trade associations or consumer groups collect and publish member data and share it in industry-specific publications. Companies can then refer to those publications for specific salary and benchmarking information to adjust their internal packages.
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Pushing boundaries in people enablement

At Leapsome, our mission is to drive HR excellence and high-performing teams. We believe in promoting growth with tools that foster development, engagement, and productivity. Our collaboration with Mercer is another step on this journey, ensuring that compensation is not just an HR task but a strategic tool for success.

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Leapsome users can access HR benchmarks for free to understand the power of data and how it can transform organizations. The Leapsome platform is designed to serve forward-thinking businesses like yours. Dive deeper into the features, or if you’d like to explore how Leapsome can revolutionize your people processes, let’s chat.

‍💪 Want to see Mercer compensation benchmarking in action?

Leapsome’s compensation framework, powered by Mercer data, supports you in creating a fair and strategic compensation structure at your organization.

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