Benchmark Better: Smarter Ways to Evaluate Pay

TL;DR:

• Relying on outdated salary data can lead to financial losses and heightened compliance risks.
• Crowdsourced salary platforms often fall short, lacking the accuracy employers need.
• Modern benchmarking tools provide precise, job-specific, and verified compensation data.
• PREmployer empowers businesses to make confident, smarter decisions around compensation.

Why Salary Benchmarking Matters

In 2025, salary benchmarking matters more than ever before—because employees are more informed than ever before. From checking pay ranges using AI-powered search tools to browsing job listings on Indeed and Glassdoor, workers are increasingly informed and unafraid to ask tough questions about salary equity, fair compensation, and pay transparency laws.

Poor salary benchmarking creates problems that compound over time. When you rely on inaccurate or incomplete salary data, you risk several costly outcomes:

• Overpaying and margin pressure: Inflated salary data can lead to compensation packages that exceed market rates, putting strain on your budget without improving retention or performance.
• Underpaying and high turnover: More commonly, crowdsourced sites underrepresent true market value, leading to below-market offers that drive away quality candidates and current employees.
• Risk of pay equity complaints: Inconsistent compensation practices based on unreliable data can create disparities that expose your business to legal challenges and damage your workplace culture.

The stakes are higher because information travels faster. A single Glassdoor review or LinkedIn post about unfair compensation can reach hundreds of potential candidates and current employees within hours. Your compensation strategy needs to be defensible, transparent, and based on solid data.

Why Employers Shouldn't Use LinkedIn for Salary Benchmarking

Employers shouldn't use LinkedIn for salary benchmarking because its data is often unreliable and based on flawed collection methods. Platforms like LinkedIn and Indeed rely on crowdsourced, unverified estimates from users who may not have accurate information about total compensation packages. Additionally, some users might inflate or deflate salary figures for personal reasons.

The bigger problem is context. A "Marketing Manager" title can mean vastly different things depending on company size, industry, geographic location, and scope of responsibility. Popular salary sites rarely account for these critical variables with enough precision.

These platforms focus heavily on base salary while overlooking the total compensation picture. Benefits, retirement contributions, bonuses, and paid time off can add 20-30% to a position's true cost and value (according to the Bureau of Labor Statistics).

Smarter Alternatives for Salary Benchmarking

Benchmarking compensation requires a methodical, multi-source approach. It’s no longer about a quick Google search—HR teams and business leaders now rely on specialized tools and verified data to stay competitive. Here’s how to approach it effectively:

Use Multiple Reliable Data Sources

Start by combining insights from at least three to five trusted resources. Each provides a unique perspective, allowing for a more comprehensive analysis. Consider using:

• SHRM salary databases
• PayScale's employer tools
• Glassdoor for Employers
• Salary.com's CompAnalyst platform
• Bureau of Labor Statistics (BLS) data

These sources ensure you work with verified, job-specific information, rather than relying on incomplete or outdated data.

Adjust for Key Variables

Compensation is influenced by several critical factors, including:

• Geographic location: Pay rates vary based on the cost of living and local demand.
• Company size: A customer service representative at a 50-person company won’t have the same market value as one at a 500-person organization.
• Industry sector: Different industries operate on vastly different pay scales.
• Role complexity: Responsibilities and required qualifications impact compensation levels.

Tailoring your benchmarks to these variables provides a clearer, more accurate picture of market rates.

Factor in Total Compensation

Don’t just focus on base salary—consider the full package. This includes:

• Health insurance
• Retirement contributions or matching
• Paid time off (PTO)
• Performance-based bonuses

Calculating total compensation can help you better understand how your offers stack up and create competitive packages, even if your base salary is on the lower end.

How PRemployer Can Help

Compensation benchmarking isn’t just research—it’s a strategic cornerstone of effective people management. At PRemployer, we provide business owners with the reliable data and expert insights to make confident, informed decisions about employee compensation.

• Market-Based Pay Analysis: We evaluate your current pay structures against local market trends, factoring in your industry, company size, and specific role requirements to ensure competitiveness.
• Balancing Profitability and Retention: For long-term success, align your compensation strategies with business profitability targets and employee retention goals.
• Comprehensive HR Solutions: From payroll management and benefits administration to compliance support, we help you navigate all aspects of competitive compensation.
• Recruitment Expertise: Through Personnel Resources, we offer tailored recruiting support to help you fill roles with top talent at competitive market rates.
• Strategic Compensation Guidance: Partner with us for ongoing expert advice on refining pay structures, defining role levels, and designing total compensation packages that drive growth.

Our approach is to deliver practical, customized solutions that align with your business.

Take Action For Smarter Compensation

Accurate compensation benchmarking isn’t just about fair pay—it’s about making smart decisions to support your business goals while attracting and keeping talent.

Using reliable data instead of crowdsourced estimates reduces compliance risk, boosts employee satisfaction, and maximizes your compensation budget.

Need help reviewing your pay structure? Let’s talk. Our team can help you assess roles, retention goals, and market expectations to benchmark better for long-term success.