Global Salary Benchmarking: The Complete Guide

How to conduct international compensation benchmarking

Follow this four-step guide to learn how to benchmark salaries.

Step 1: Define your global compensation philosophy

Think of your compensation philosophy as the principles you’ll apply to every new hire.
It should answer:

• Why you’re hiring in that location. For example, skills shortage, time zone coverage, language requirements, or expansion plans.

• Whether this is one role or the start of a repeatable hiring motion

• How you’ll approach salary across locations: location-based, location-agnostic (same pay regardless of location), tiered/zoned, or hybrid

• What your market positioning is. Whether you aim to lead, match, or lag the market:

Step 2: Collect localized data

This is where many teams struggle. Good salary benchmarking depends on good inputs. If a source can’t explain where the data came from, how roles are matched, or when it was last updated, tread carefully.

A practical approach is to use a mix of sources so you can cross-check ranges:

1. Reputable compensation surveys and consultancies
   Examples include

   
   Mercer
   

   ,

   
   Aon Radford
   

   ,

   
   Willis Towers Watson
   

   , and

   
   Korn Ferry
   

   .

2. Government or statutory sources
   These are useful for baseline requirements like minimum wage rules, statutory pay items, or mandatory contributions.

3. AI platforms
   AI salary benchmarking tools can help you filter salary data by country, region, role, and industry. But make sure to choose an AI platform that uses verified data.

   
   Gia
   

   is built on a proprietary knowledge base of 100,000+ legally vetted sources and 1,500+ government articles. Get trusted guidance on pay requirements, benefits, and pay equity across 50 countries and all 50 U.S. states to support compliant decision-making.

Step 3: Factor in cost of living and location

City, region, and local labor-market conditions matter.

If you’re aiming to

localize pay

across countries, purchasing power parity (

PPP

) can help you sense-check decisions. PPP is a way to compare currencies by adjusting for the cost-of-living differences between countries. 

If your global compensation philosophy is location-agnostic, you may choose to keep pay fixed when professionals move. With this approach, pay is tied to scope, level, and role impact rather than geography. This approach can reduce frequent re-leveling and recalculations, but it comes with trade-offs. You’ll need:

• A clear internal leveling system 

• A plan for fairness conversations in high-cost locations

• Local compliance checks for required benefits and employer obligations

Step 4: Audit and adjust regularly

Global compensation ranges will shift over time, but regular audits keep offers competitive, protect budget accuracy, and reduce turnover.

Here’s what this looks like in practice:

• Run a full review at least annually.

• Consistently check markets characterized by high inflation, rapid salary movement, or currency volatility.

• Track outcomes, including offer acceptance rates, time-to-fill, and early attrition. 

• Age your data.

If your salary data is out of date, you can age it forward using the salary increase budget you’re working with:

Aged rate = Old rate × (1 + salary increase %)

Example:
If the market rate was USD 80,000, and your reference increase is 3.5%, your aged estimate is USD 80,000 × 1.035 = USD 82,800.

It’s best to only age data 1–2 years and to stay alert to market shifts, supply or demand changes, and any regulatory or CBA changes.

Applying the 4-step process

Now that you’ve learned how to conduct international compensation benchmarking, let’s revisit our hiring scenario with Miguel and Claire:

_{* Disclaimer: The salary rates in this example are for illustrative purposes only. They’re not actual cost estimates for these locations, industry, or role.}

Base salary is only the starting point. When you account for employer burden and required benefits, two identical offers can land at a very different total cost. This changes how you evaluate the best hire.

After you’ve defined and applied the steps above, you can make faster hiring decisions and align offers with local expectations and requirements. Once you have your ideal candidate, let

G-P

handle the rest. 

As a

global employer of record (EOR)

, we make international hiring easy. With us, you can hire, onboard, and pay talent in 180+ countries, without setting up local entities. 

Expert tips for compliant salary benchmarking

A credible benchmark should stand up to scrutiny from candidates, internal stakeholders, and regulators. Use the following practices to strengthen your strategy.

Prioritize local expertise
Pay rules, statutory benefits, and employer-paid costs change by country, so validate your benchmark against local requirements and market norms before you finalize the range. 

Pro tip: If you’re hiring in a new market, tools like Gia can help you validate local requirements and norms. Once you’ve found your ideal candidate, G-P EOR can put your plans into action by giving you a quick and easy way to hire talent, without setting up an entity.