In today’s business climate, competitive salary benchmarking isn’t just a hiring tactic — it’s a strategic lever for growth, retention, and operational efficiency. For C-suite leaders, HR teams, and operations managers alike, well-executed salary benchmarking and analysis is critical to ensuring your pay structures support both financial goals and workforce sustainability.
At Hoops, we empower businesses with data-driven market insights to make informed compensation decisions. In this guide, we’ll walk you through 7 essential steps to master salary benchmarking and strengthen your workforce planning strategy. Whether you’re hiring for a new role, adjusting existing salaries, or planning for long-term workforce growth, these steps will give you clarity and confidence.
What is Salary Benchmarking and Why is it Important
Salary benchmarking involves analyzing your organization’s pay rates against market standards for similar roles, industries, and regions. It’s the answer to questions like:
- Are we paying enough to attract and retain talent?
- Are we aligning compensation with evolving market demands?
- Are we risking profitability or turnover due to misaligned pay?
The stakes are high. A Pew Research Center study found that 63% of employees who quit their jobs cited low pay as a reason, while 43% pointed to inadequate benefits such as lack of health insurance or paid time off. Conversely, overpaying without benchmarking can erode margins and restrict growth. Strategic salary analysis ensures you strike the right balance — protecting profitability while building a resilient workforce.
Step 1: Define Clear Compensation Goals
Before gathering data, clarify your purpose. Are you benchmarking salaries for a new hire, planning raises to retain key talent, or conducting a full workforce review? Setting clear goals prevents wasted effort and ensures your analysis is focused and actionable.
When conducting a full workforce review, companies often prioritize high-impact roles first. For example, an Emerging Middle-Market (EMM) company in facilities management might begin by benchmarking skilled trades positions like HVAC technicians before expanding to leadership roles.
Once your objectives are defined, outline the key parameters for your analysis:
- Scope (specific roles, departments, or full workforce)
- Regions (local, regional, national)
- Experience levels (entry, mid, senior)
- Inclusion of benefits (salary vs. total rewards)
💡 Pro Tip: Use salary benchmarking tools like Hoops’ Market Insights Reports to streamline this process. Our AI-powered reports provide real-time data on salary ranges, benefits, and hiring difficulty tailored to your industry and location, saving you hours of research.
Step 2: Source Reliable Compensation Data
The backbone of any good salary benchmarking tool is data—but not just any data. You need credible, up-to-date sources to ensure accuracy. Rely on a mix of government, industry, and self-reported data for a comprehensive view:
- Government Data: The U.S. Bureau of Labor Statistics (BLS) offers mean hourly wages by region and occupation. For instance, BLS data shows HVAC technicians in Dallas-Fort Worth earn an average of $27.83/hour, with top earners at $39.65/hour.
- Industry Reports: Platforms like SHRM or Payscale provide detailed compensation benchmarks for specific roles and industries.
- Self-Reported Data: Sites like Glassdoor and Indeed offer real-time salary insights from employees, though they may vary in accuracy.
- Competitor Job Postings: Analyze local competitors’ job listings to see what they’re offering. For example, our analysis of HVAC technician roles in Dallas revealed hourly rates ranging from $20 to $55, depending on experience and certifications.
💡 Pro Tip: Cross-reference multiple sources to account for variations. Self-reported data might skew higher or lower than government stats, so use a weighted approach for accuracy.
Step 3: Segment by Role, Experience, and Location
Not all roles are created equal, and neither are their salary expectations. Break down your analysis by:
- Role: Different job titles (e.g., “Field Service HVAC Technician” vs. “HVAC Apprentice”) have distinct pay ranges. Our Dallas data shows senior HVAC technicians earn up to $50/hour, while apprentices start at $15-$20/hour.
- Experience: Entry-level, mid-career, and senior professionals command different rates. For instance, HVAC technicians with 5-7 years of experience in Dallas earn $35-$45/hour, while those with 10+ years can exceed $50/hour.
- Location: Cost of living varies significantly. Dallas has a cost of living index of 101.6 (slightly above the national average), compared to Plano’s 109.3. Adjust salaries to reflect local economics.
This segmentation ensures your pay is competitive for the specific talent you’re targeting. Hoops’ salary benchmarking tools simplify this by providing granular data, like suggested salary ranges ($72,800-$93,600 annually for a Dallas HVAC technician) and cost-of-living adjustments.
💡 Pro Tip: Consider certifications or skills that impact pay (e.g., EPA or 608 Certification for HVAC roles, which can narrow the talent pool by 20% but justify higher wages).
Step 4: Benchmark Benefits and Total Rewards
Salaries are only part of the equation. Benefits—health insurance, 401(k) matches, PTO, and professional development—play a massive role in attracting and retaining talent. A good salary benchmarking process should include a benefits comparison to ensure your total rewards package stands out.
Include comparisons for:
- Health, dental, and vision insurance
- 401(k) matching
- PTO policies
- Training and certification reimbursement
- Wellness stipends, flexible scheduling, and bonus programs
For example, our Market Insights Reports for Dallas HVAC technicians suggest offering comprehensive health insurance, 3 weeks of PTO, and certification reimbursement to match top employers. Some competitors sweeten the deal with sign-on bonuses or company vehicles, especially for roles requiring travel.
💡 Pro Tip: Highlight unique perks in job postings, like flexible scheduling or wellness stipends, to differentiate your offer. Hoops can help you identify trending benefits in your industry to stay competitive
Step 5: Analyze Competitor Compensation Strategies and Market Trends
- Review salary ranges, bonus structures, and benefits offered by local companies — whether direct competitors or not — that are targeting the same talent you need to hire and retain.
- Track market shifts like pay transparency laws, rising demand for specific certifications, and economic pressures on compensation.
Hoops’ Market Insights’ salary benchmarking tool delivers competitor comparisons and trend analysis, helping you anticipate shifts and adjust your strategy proactively.
💡 Pro Tip: Don’t just match competitors—find ways to stand out, like offering career progression paths (e.g., from HVAC apprentice to manager) to appeal to ambitious candidates.
Step 6: Ensure Pay Equity and Legal Compliance
Competitive pay is not just about attracting talent — it’s also about mitigating legal risk and ensuring compliance with evolving state and local laws.
- Conduct a comprehensive audit of your internal pay practices to ensure equitable compensation across genders, ethnicities, and regions.
- Stay up-to-date with current pay transparency and wage disclosure laws, which vary by state and continue to expand.
A study from the National Bureau of Economic Research found that organizations that neglect salary benchmarking risk 40% larger pay gaps for low-skill roles and 14.6% gaps for high-skill roles — both of which can impact retention and expose you to legal risks. (For a full breakdown of the latest pay transparency laws by state as of March 2025, read our recent blog here.)
As part of your compliance efforts, review internal compensation against market benchmarks. Are entry-level technicians paid equitably compared to industry standards? Are senior roles aligned appropriately based on experience and skills? Proactive salary audits not only support compliance but also strengthen trust, retention, and employer brand equity.
💡 Pro Tip: Hoops supports clients with market salary benchmarking and compliance-focused strategies to help reduce risk and build a culture of fairness.
Step 7: Turn Insights into Strategic Action
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Adjust Salaries: Raise pay for under-market roles to reduce turnover. For example, if your HVAC technicians earn $25/hour but the market rate is $35-$45/hour, consider incremental increases.
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Enhance Benefits: Add high-value perks geared toward the role’s demographics, like 401(k) matches or training programs, to boost retention without inflating salaries.
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Optimize Job Postings: Include salary ranges in listings to comply with transparency laws and attract candidates. Our data shows that clear salary ranges increase applicant quality by 20%+.
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Plan for Growth: Align compensation with workforce planning goals, ensuring scalability as you hire or expand.
The Bigger Picture: Salary Benchmarking as a Workforce Growth Strategy
Salary benchmarking isn’t just about today’s hires—it’s about building a sustainable workforce for tomorrow. By aligning pay with market standards, you reduce the true cost of unfilled positions (like lost productivity and recruitment expenses) and create a culture that retains top talent. It’s a key pillar of workforce planning, ensuring your compensation strategy supports long-term growth.
At Hoops, we help organizations move from reactive hiring to strategic workforce planning. Our AI-powered Market Insights Reports (salary benchmarking tools) deliver:
- Real-time salary and benefits benchmarks
- Competitor and similar job insights
- Current market trends that could impact your role
- Hiring difficulty assessments
- Actionable guidance for building sustainable, scalable teams
Whether you’re an EMM company scaling rapidly, a growing SMB, or an established enterprise, Hoops provides the clarity and tools to build winning compensation strategies.
Ready to build a compensation strategy that drives growth? Explore how Hoops’ salary benchmarking tools can simplify your workforce planning efforts →
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