Finding and hiring talented software developers, engineers, analysts, and other tech professionals is a challenge on its own — and is made even more complicated when you contemplate salaries. This is where salary benchmarking is a valuable strategy for hiring tech companies. Salary benchmarking is a process of comparing employee salaries and compensation with market data to determine fair and competitive pay rates for your employees.
The process of salary benchmarking is even more critical when you make the decision to hire remote tech talent in different parts of the world. Global salary benchmarking can help you better understand how to pay remote tech teams fairly and build a talented team with competitive salaries and without breaking the bank.
Truss is here to help you and your tech company build a talented team of developers, engineers, and analysts that can help your company succeed. Truss provides tech companies with a global hiring platform that will help find, recruit, hire, onboard, and manage remote teams — to include helping you determine fair salaries and compensation for new employees.
Contact Truss today to learn more about our global hiring and Employer of Record services!
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Key Strategies for Global Salary Benchmarking
In many ways — global salary benchmarking is a more complex comparison of salaries — but when it is applied to a tech startup searching for new talent, it allows tech companies to be more competitive when trying to attract top-tier talent in hiring markets. Tech companies can implement global salary benchmarking strategies to determine fair compensation and pay for talented employees. There are three primary approaches to global salary benchmarking that companies can use — Location-Based Pay, Global-Based Pay, and a Hybrid Model — that each provide a different strategy to determine fair compensation.
Here is a closer look at the different approaches to global salary benchmarking:
Location-Based Pay Benchmarking
The location-based pay approach to global salary benchmarking examines fair compensation by looking at the cost of living and local market pay rates in the country where the remote employee lives and works — which can be impacted by whether an employee lives in a major city and tech hub or a smaller town. This strategy typically involves tiered compensation rates with a goal of balancing fair pay with local hiring costs. A location-based benchmarking approach can lead to internal pay disparities and frustration based on the specific locations where remote employees lived.
Global-Based Pay Benchmarking
A global-based approach to salary benchmarking — often referred to as role-based benchmarking — is another approach for U.S.-based tech companies that hire remote employees in emerging markets like Central Asia or Eastern Europe. This strategy standardizes salary levels across multiple locations based on where a central office is located or global pay rates. This benefits tech companies by simplifying the payroll and attracting top-tier talent — but it can be a more expensive approach to building a workforce and disrupt pay scales in local economies.
Hybrid Pay Benchmarking
This approach to global salary benchmarking implements elements of both location-based benchmarking and global-based benchmarking to provide fair compensation for remote tech employees. The strategy typically involves implementing localized pay benchmarks in high-cost areas and offering competitive salaries for remote employees that fill a specific role — often taking the higher salary between location- and job-based salary benchmarks. Annual salaries with this approach are often augmented by salary bonuses and equity for distinct regions.
5 Steps to Implement Global Salary Benchmarking
U.S.-based tech companies that choose to implement global salary benchmarking to ensure remote employees are paid fairly will need to take the right steps to implement this comprehensive strategy. Here is a closer look at the steps your tech company will need to take to implement global salary benchmarking:
- Define Your Compensation Strategy: Tech companies must first establish if they want to pay remote employees at, above, or below the standard market rate based on financial limitations, and must determine if they want to use global, regional, or local salaries as the benchmark.
- Collect Market Salary Data: The next step is to collect and analyze market salary data based on compensation surveys, government data, and information provided by local industry experts that can provide accurate salary data.
- Create Salary Bands: When you have analyzed the salary data, it is important to create salary bands that take cost–of-living adjustments, location-based pay differentials, bonuses, and benefits into account.
- Communicate Compensation Strategy: When you have established a pay scale and salary bands, it is important to communicate the strategy with HR departments, managers, and recruiting agencies.
- Review Salaries: It is important to monitor tech markets and economic conditions after you have established salary bands and benchmarks. Review market conditions annually or when the business changes to ensure your salaries remain competitive.
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Hire Remote Workers at Competitive Salaries with Truss
Global salary benchmarking is a viable strategy used by tech companies to ensure remote tech workers are paid fairly — but it can be a complicated process. Truss provides tech companies with an end-to-end global hiring platform that will help you find, recruit, onboard, and manage a remote workforce in different parts of the world.
Team Truss has years of experience finding and recruiting talented developers, engineers, and analysts in emerging markets like Central Asia and Eastern Europe — and we will use that experience to find you the talent you need at competitive salaries. When tech companies provide Truss with a list of skill and salary requirements, we will find potential candidates that match your criteria, and when you have found the perfect candidate, Truss will handle onboarding and payroll management. Truss can also act as your Employer of Record in Central Asia to ensure you remain compliant with local labor laws.
Contact Truss today to find out more about the Truss global hiring platform!
