Job Benchmarking Definition

by | Published on May 10, 2023 | Last Updated on Sep 3, 2023 | Academy

Top Compensation Providers

The freshest salary benchmarking data by industry, location, and revenue size.

Job Benchmarking Definition


Employers use job benchmarking as a tool to compare their existing job roles with similar positions in the market. This comparison helps them determine if they are offering competitive salaries and benefits and identify areas of improvement or growth opportunities.

By understanding what other organizations are doing in terms of employee compensation, job descriptions, skills, career paths, training programs, and more, employers can ensure that they remain competitive within their industry and improve their hiring process. In this blog article, we will discuss the definition and process of job benchmarking and how it can be used to benefit your organization.

Benchmark Jobs definition

A benchmark job is defined as one that has a consistent and fairly standard set of responsibilities from one organization to another and for which data from reliable salary surveys is available from top compensation survey providers. This ensures valid, consistent, and reliable data which can be used for benchmark jobs.

Non benchmark Jobs definition

Non benchmark jobs refer to positions that are obscure, and/or not regularly surveyed by compensation survey providers. These non benchmark jobs may be unique to specific jobs or include specialized positions in the organization or industry. Additionally, they may be positions with conflicting duties. As a result, these non benchmark jobs may not have comparable positions in published surveys, hence accurate benchmark job matching cannot be done.

How to classify a benchmark job

To classify a benchmark job, data is gathered from salary surveys, such as the ones at SalaryCube, to determine the median salary for the benchmark position. The benchmark job is then “slotted” into the pay grade with a salary grade midpoint that is closest to the median salary the same position reported in the survey. It is important to use salary data that best matches your own organization’s employee demographics when benchmarking.

For example, if your company is in the manufacturing industry, located in New York, and has a revenue level of under 100 million, you would want to compare the median salary from the survey data that matches the same demographics of your company. Tools such as SalaryCube’s salary benchmarking platform, allow you to easily extract comparable information to your company.

Job Benchmark Defintion blog

How Organizations Benchmark Roles

Job benchmarking, or salary benchmarking, enables organizations to examine and compare their job roles with similar positions in the marketplace. This helps employers identify areas they could improve on and also makes sure they are offering competitive salaries and benefits. Organizations can utilize various tools, such as survey data collected from platforms like SalaryCube, to gain insight into the median salary for a given benchmark job title or role. This data can then be used to compare the organization’s position against similar positions in the labor market.

Organizations can also use online resources such as Glassdoor and LinkedIn for a basic level of research, but these resources are not as robust as using a comprehensive salary survey. Additionally, organizations can choose to conduct their own benchmark job research or review internal records to gain a better understanding of how their pay compares with other companies and organizations in their industry.

The importance of good job descriptions and job titles

Good job descriptions and job titles are an important part of salary benchmarking. Each job description should provide comprehensive information about the duties and responsibilities of a position, as well as factors such as the skill set required to perform the job effectively. This information is essential to accurately benchmark a role against similar positions in the marketplace.

Having an accurate job description allows employers to compare their roles with jobs at other organizations more fairly and accurately. The job description should be updated regularly, as changes in the organization or market can affect how a role is benchmarked. This will help the organization remain consistent when comparing specific jobs over time and help interpersonal communication between management and employees about their pay structure and salary ranges.

The problem with outdated job descriptions and job titles

Outdated job descriptions and job titles pose a problem for organizations looking to accurately benchmark their roles against competitors. While an outdated job description may provide some insight into the responsibilities, skills, and tasks of a role, it fails to capture the evolving nature of the workforce and industry trends. An outdated job description is likely to be incomplete or inaccurate, leading to incorrect salary comparisons or position mismatches. An outdated job title can cause a misalignment of benchmark jobs.

Organizations should regularly update their descriptions and titles to ensure they are still accurate and reflective of role changes or shifts in industry trends. This process will help organizations get a more accurate and complete picture of how their positions compare to similar roles and benchmark jobs in the marketplace.

Final thoughts

Job benchmarking is a powerful tool for organizations to compare their roles with similar positions in the marketplace. By leveraging salary data from platforms like SalaryCube, employers and hiring managers can gain insight into median salaries and use this information to accurately benchmark jobs against competitors and improve their hiring process. Additionally, job descriptions must be updated regularly as changes in the organization or market trends may affect how a role should be defined or classified when being compared.

One of the main issues with relying on free salary data is that it may not be as accurate or up-to-date as more comprehensive data collected from tools such as SalaryCube. Free salary data often lack details on job titles, responsibilities, experience requirements, and other important criteria necessary to provide an accurate comparison. Additionally, free salary information may also be biased toward certain groups, companies, or industries, which can lead to incorrect salary estimates.

Organizations need to use comprehensive salary data when benchmarking jobs, to ensure they have an accurate and complete understanding of the marketplace. By combining this information with accurate job descriptions and qualifications, employers can make sure their roles are competitively benchmarked against similar roles in their industry.

It’s also important for managers to remember that the goal of the job benchmarking process is not just to compare salaries, but also to understand the value and worth of a role or position within an organization. This understanding can allow employers to create more rewarding and equitable compensation structures while making sure they remain competitive in their industry.

By understanding how their roles and skills compare to similar positions in the marketplace, employers can create strategies to ensure they are competitively positioned and have the right people in place to succeed and achieve their organizational goals.