To attract top talents, it is essential to offer an attractive compensation and benefits package. A fair and competitive salary not only makes you an appealing employer but also strengthens your position in salary negotiations during the hiring process. But how can an appropriate salary be determined? Our experienced HR consultants recommend the use of salary benchmarking and provide practical examples for its application.

Thomas Hoffmann, Director for the Hamburg, and Berlin offices, explains, "To determine a market-competitive salary for employees, companies often rely on salary benchmarking. This process incorporates both internal company data and industry-wide information. Traditionally, companies use public data from job boards and consult compensation and HR specialists."

But what if you could utilize labour market data tailored to your individual situation and industry to create a truly competitive compensation and benefits package?

Harnessing the Power of Data

With a wealth of software and tools available, external salary benchmarking has become much easier. For instance, Robert Walters publishes its annual salary survey, providing a comprehensive overview of salaries for hundreds of positions in over 30 countries. This survey not only offers insights into current salaries but also forecasts upcoming hiring trends in various sectors.

However, companies often desire more specific data. "In a competitive job market where candidates hold more sway, salary is increasingly at the forefront of talent acquisition. Building on the insights from our salary study, we've elevated salary benchmarking to the next level. Our market research team combines our own recruitment data with data from job boards and other external sources to create even more detailed salary benchmarking reports. These reports offer comprehensive analyses with salary and contract data for desired positions in various industries," continues Thomas Hoffmann.

Benchmarking in Practice

Thomas Hoffmann underscores his experiences with a practical example: "Specifically, we received a request from an international service company. To fill various positions within the company, they wanted to understand the market and local salaries in different countries. The Market Intelligence team extracted data from our systems based on placements from the past few months. After removing outliers, the lower and upper salary ranges from the 25th to the 75th percentile were determined, and the data was prepared accordingly. This helped the company make the right decisions for filling the open positions."

Thomas Hartenfels, Senior Director South and Head of the Robert Walters Japan Desk in Düsseldorf, provides another example of how comprehensive salary benchmarking can help attract talents in a new international market: "My client, a Japanese pharmaceutical company, wanted to fill two positions but struggled to compare its compensation and benefits packages to German market standards due to the unique nature of the roles. Therefore, our Market Intelligence Team conducted an analysis based on over a million individual data points from our salary database. This analysis was transformed into a detailed report that included not only compensation based on years of experience but also company pension plans, company car allowances, bonus schemes, and much more. Armed with this information, the company could tailor its compensation and benefits to the local market and attract the desired talents."

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If you aim to diversify your workforce, expand your team, or relocate a business function, our data-driven approach can advance your hiring strategy. Are you curious about how our market analyses for talent acquisition can help you make more informed decisions? Request a market research report today.