2024 saw some challenging times for businesses with the strain being felt with the budget announcements, resulting in many businesses having to re-engineer the forecast based on attributing costs such as NI. This most certainly played a part with salary benchmarking or annual salary increases.
Based on employers not being able to offer the usual increase of salary, created some movement in the market for candidates weighing up their career choices and many considering an external move to chase the pay rise.
Across sectors, competition is heating up for the top talent, and businesses must make job offers that meet candidate expectations. Salary benchmarking in the current climate is more important than ever. So how can benchmarking salaries help employers ensure they are offering fair wages that match workers’ skills, experience and competitors offerings.
Money remains the main motivator when moving jobs.
42% of professionals outlined ‘salary’ as their most valued factor when looking to move roles. Unsurprising, but important to remember when making offers.
Don’t disregard flexibility.
52% of professionals outlined ‘1 or 2 days’ in the office as their preference of working patterns. Has the way we work changed irreversibly? According to a Linkedin Study in 2025 82% of businesses will have a hybrid work model which is said to be key to retain staff alongside the salary benefits.
Benchmarking – why is it essential to get salary right?
It is not enough to simply create a job spec and hope that the right person applies for the role. To attract and retain the top talent, employers must carefully consider the recruitment landscape and candidate expectations — especially regarding salary.
Salary is often the first thing someone will look at when considering a new job. In fact, an analysis of job adverts on Reed.co.uk found that nearly 50% of UK professionals are dissatisfied with their pay, ensuring your salary offerings are competitive is critical for retention and recruitment success.
However, not forgetting that employers should be analysing their competitors and adjusting their offers accordingly throughout the year to ensure they are offering a reasonable and appealing deal, particularly during periods of economic disruption when salary can be the deciding factor for candidates.
What is involved in a successful salary benchmarking strategy?
Salary will always remain important to candidates — especially in today’s economy. With the rising cost of living and many people feeling the pinch, the best candidates are unlikely to stick around for a lowball wage. As a result, 44% of employers have responded to recruitment difficulties by raising pay.
However, without assessing industry averages, employers may as well be plucking numbers from thin air. A thorough salary benchmarking strategy can help employers ensure job offers align with industry and candidate expectations.
Outline a benchmark plan
A basic salary benchmark framework involves defining the internal role (including job requirements and attributes), sourcing relevant salary data and then comparing the most similar internal and external job descriptions to find an accurate average.
This process can take a long time, so employers should determine a timeline, budget and long and short-term goals for their salary benchmarking project before getting started.
Use a salary benchmarking tool
Several free salary benchmarking software tools are available online that analyse generic information on pay, location and industry. These tools can help compare junior positions and roles that are more common in the workplace.
However, for more senior roles, there are likely to be fewer employees to compare. In this case, it may be necessary to conduct more bespoke research to identify appropriate competitors and comparisons.
Salary benchmarking can also minimise counter offers whereby at the time of annual appraisals, employees can understand, but perhaps not accept, that their salary is comparable to the market. This shows the employee that the business is keeping up to date with market trends and helps with engagement and staff retention.
Salary Survey
Howett Thorpe recently conducted an in-depth analysis of the market trends for salaries and the benchmarks for 2025, within the finance sector, accounting and business support sectors in our salary survey for 2025. The survey revealed the benchmark salaries that companies should be working towards this year.
You can access our salary survey here
Enlist the support of a recruitment professional
Despite its practical applications, setting up a salary benchmark system can drain internal company resources. And whilst free tools can help provide some valuable insights, they may overlook the all-important human element of recruitment.
By outsourcing salary benchmarking to a recruitment consultancy firm like Howett Thorpe, businesses can ensure they gain the most accurate and relevant market data supported by in-depth industry knowledge and recruitment expertise.
Does your organisation need advice on setting the right salary offers in the current job landscape? Contact our team of business support and financial recruitment specialists at 01252 718777 or email farnham@howett-thorpe.co.uk to find out how we can help.