en

Services

The UK's leading employers trust us to deliver fast, efficient talent solutions that are tailored to their exact requirements. Browse our range of bespoke services and resources.

Read more
Jobs

Let our industry specialists listen to your aspirations and present your story to the most esteemed organisations in the UK, as we collaborate to write the next chapter of your successful career.

See all jobs
Candidates

Together, we’ll map out career-defining, life-changing pathways to achieve your career ambitions. Browse our range of services, advice, and resources.

Learn more
Services

The UK's leading employers trust us to deliver fast, efficient talent solutions that are tailored to their exact requirements. Browse our range of bespoke services and resources.

Read more
About Robert Walters UK

Since our establishment in 1985, our belief remains the same: Building strong relationships with people is vital in a successful partnership.

Learn more

Work for us

Our people are the difference. Hear stories from our people to learn more about a career at Robert Walters UK

Learn more

Why is it important to salary benchmark?

Want to know about some of the key advantages of salary benchmarking?

Companies often come to us wondering whether their senior executives’ remuneration packages are in line with those offered by other organisations of similar size. Few employers routinely have access to this information, and gaining it can be challenging.


Why is it so important for companies to know this?

In some cases, they don’t want to risk losing their top executives to offers of better pay packages from competitors. In others, they want to be able to prove to their shareholders in black and white that their senior staff provide value for money.


With variations in pay potentially being the difference between retaining or losing highly valued directors and keeping shareholders happy, salary benchmarking can be vitally important to the success of an organisation.

 

Where to start when benchmarking?

Listed businesses have remuneration committees in place for exactly this purpose but, without any guidance of the compensation packages offered by other organisations, it can be difficult to know where to start. Salary surveys can be useful for benchmarking at more junior levels, particularly with the significant volume of data that can be generated when comparing pay for roles that are relatively common in the marketplace. However, at the most senior level – where there are simply fewer roles to compare and we typically see a huge variation in the make-up of compensation and benefits packages – these are not as useful.

What is salary benchmarking?

Salary benchmarking can help companies to overcome these issues. Crucially, this is a much more focused and detailed process than a traditional salary survey. Benchmarking gives a complete breakdown of the compensation package allowing companies to compare salary and benefits available within specific sectors and named companies. So, overall it is a much more exact science.

How is it possible to get this information?

For listed businesses, the majority of it is available publicly within annual company reports. However, organisations will typically not have the required resources to trawl through large volumes of these reports to obtain the meaningful results and analysis this information can provide. Enlisting a third party, such as Robert Walters, to carry out this work can therefore save a lot of time and effort. Additionally, the report is impartial meaning the results produced are completely reliable and accurate.

With variations in pay potentially being the difference between retaining or losing highly valued directors and keeping shareholders happy, salary benchmarking can be vitally important to the success of an organisation. 

What information does salary benchmarking allow businesses to obtain?

Typically, it will provide a list by company size, sector and revenue which details the package earned in terms of the value of the basic salary, cash bonus, share bonus, long term incentive plan (LTIPs) and pension of the position in question (be it CEO, COO, CFO or FD).

What are the advantages of salary benchmarking?

The advantages of this are numerous. Firstly, pay varies widely depending on sector.  In research we recently completed, for example, two specific businesses from within the scientific & instruments and manufacturing industries, with similar revenues, paid their CEOs basic salaries of £288,000 and £175,000 respectively. Salary benchmarking allows organisations to get an idea of these differences, while at the same time finding out pay levels typical in their own sector.

Secondly, the value of different components of the package can differ greatly depending on the employer. Salary benchmarking considers all aspects of remuneration to ensure it gives an accurate reflection of the take-home package. As an example, LTIPs are generally offered to senior directors to ensure they stay with or grow the company in the short, medium or long-term.

Typically, they provide the opportunity to buy shares at a certain price but, as part of the deal, forbid executives from selling them for a set period of time – usually at least three years. As LTIPs routinely include share options and share prices change daily, they are the hardest part of the package to benchmark. However, our salary benchmarking approach – which includes an analysis on the frequency that the LTIPs are granted – ensures these are taken account of in the final results.

Thirdly, and most importantly, salary benchmarking allows companies to make comparisons of these figures between a large number of other businesses. As part of the analysis, for example, the research can determine the overall mean, as well as lower and upper quartiles, of the value of each component of directors’ overall compensation packages. These then give a clear indication of how their directors’ pay compares with the market.

Overall, salary benchmarking gives an impartial and accurate idea of pay information to help businesses make informed and effective remuneration decisions, while at the same time accounting for variations that need to be considered.

Learn more about our bespoke compensation and benefits benchmarking service

Share this article

Related content

Submit a vacancy
Salary survey
Hiring advice
Get in touch

Find out more by contacting one of our specialist recruitment consultants

Related articles

View All

5 ways to use data to drive your talent strategy in 2024

In the dynamic landscape of 2024, harnessing the power of data is crucial to developing and implementing a successful talent strategy. Here are five key ways to leverage data and hiring intelligence to drive your talent strategy forward. 1. Understand the Jobs Market Stay ahead of competition In the

Read More

Stay Ahead: 5 Key Trends Shaping Public Sector Recruitment

Staying up to date on the latest trends in public-sector recruitment is crucial when creating an effective talent strategy. In this article, we delve into the key trends impacting recruitment in the public sector and answer the questions organisations should be asking to successfully attract and ret

Read More

Attracting the right talent: meeting demands through job offering

There has been a notable shift in career priorities within the last 12 months - arguably as a result of the ‘millennial impact.’ As a result, candidates are placing more importance on the softer benefits related to their career. In fact, being valued within a company (25%) and work-life balance (17%

Read More

I'm Robert Walters Are you?

Come join our global team of creative thinkers, problem solvers and game changers. We offer accelerated career progression, a dynamic culture and expert training.