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In today’s competitive job market, attracting and retaining top talent is more challenging than ever. Compensation Analysts are under increasing pressure to design and manage competitive compensation packages that align with market trends. A salary benchmarking tool is as necessary a tool for a compensation analyst as a hammer is for a carpenter and choosing the right one must be done with great consideration. 

This article will provide an overview of when it makes sense for your organization to consider adding a salary benchmarking tool, what problems it will solve, what benefits it will provide, and a list of questions to ask while you are doing your research. 

The Role of Data in HR Decision-Making

The days of making compensation decisions based on gut feeling or outdated surveys are long gone. HR professionals are expected to make decisions that are based on both external market analysis as well as evaluations of internal equity. 

The right salary benchmarking tool can enable the compensation professional by providing greater access to a range of salary surveys, internal equity information, and in CompTool’s case, real-time market data from Squirrel, our database of millions of job-postings with employer-reported pay ranges. Using a tool to support the data-driven approach not only adds credibility to your compensation practices but also ensures that you’re offering competitive salaries and maintaining internal equity.

Benefits of Automating Salary Benchmarking

Manual benchmarking processes using multiple excel spreadsheets are not only time-consuming but also prone to errors. An automated tool, such as CompTool, streamlines numerous processes, allowing the compensation team to focus on other strategic tasks.

Here are some benefits of automating salary benchmarking tools:

  • Efficiency: Automated tools can quickly analyze large datasets, providing insights in a fraction of the time it would take to do it manually. 
  • Consolidated Data:  Salary benchmarking tools consolidate all your salary surveys in a single searchable database.
  • Accuracy: Compensation benchmarking tools minimize the risk of human error and create a more consistent approach which creates more reliable results.
  • Reporting: Communicating data in a meaningful has become far more important for HR and compensation teams.  Salary benchmarking tools will include several pre-built and customizable reports consolidating many datasets into one, allowing quick and customizable reporting. Many tools offer customizable reports that allow you to analyze the data in a way that’s most relevant to your organization.

Key Considerations

User Experience

The user interface and overall experience are critical factors in the effectiveness of any software tool. Look for a salary benchmarking tool that is intuitive and easy to navigate. A steep learning curve can slow down your HR operations and lead to errors. Additionally, customization options can be beneficial, allowing you to tailor the tool to your organization’s specific needs.

Key points to consider and questions to ask during a demo:

  • Does the salary benchmarking tool appear straightforward and easy to use?
  • If you had a demo, did the demo company accurately represent your Company’s dataset? 
    • Are the grades similarly organized? 
    • How many employees were in the demo company? 
    • Were the surveys similar to your own?
    • Was the demo company in a similar or relevant industry?
  • What kind of support will you receive? Will it be to work with someone with general knowledge of compensation, or do you need a full on compensation consultant?

Integration Capabilities

In today’s interconnected business environment, the ability to integrate with other systems is crucial. Check whether the salary benchmarking tool can seamlessly integrate with your existing Human Resource Information System (HRIS) or other software you use for HR management. API availability can also be a significant advantage, enabling you to connect the tool with custom solutions or third-party services.

Key points to consider and questions to ask during a demo:

  • What HRIS systems does your software integrate with?
  • Is there a cost to integrate with an HRIS?  Is there a fee for not integrating (this may include a cost for manual data loads.)
  • Does integration with an HRIS impact the implementation timeline?
  • How often should the data be updated?  Are there any additional costs based on how frequent the data refreshes?
  • Are there any security concerns to be aware of for integration?

Reporting and Analytics

The primary purpose of a salary benchmarking tool is to provide actionable insights. Therefore, robust reporting and analytics features are a must. Look for tools that offer a variety of report types, from simple summaries to detailed analyses. The ability to customize these reports can also be beneficial, allowing you to focus on the metrics that matter most to your organization.

Key points to consider and questions to ask during a demo:

  • How do the reports compare to our current reports?
  • Who has access to reports in the compensation benchmarking software?
  • Are the reports customizable?  To what extent?
  • What format are the reports in when they are exported, and what kind of additional formatting would you need to do to put the reports into a pivot table?
  • How would our stakeholders respond to these reports?
    • Executives?
    • Line Managers?
    • HR Business Partners?
    • Finance Partners?


As your organization grows, your HR software needs will evolve. Choose a salary benchmarking tool that can scale with you. Whether you’re adding more employees, expanding to new locations, or diversifying your business, the tool should be flexible enough to accommodate these changes without requiring a complete overhaul.

Key points to consider and questions to ask during a demo:

  • Where are we in our current compensation management and how will a Salary Benchmarking Tool help?  Do you have structures?  Salary surveys?  Benchmarking? 
  • Does your salary benchmarking software company have resources that can help you grow?  Do they provide consulting, and what is included?


Understanding what is involved during the implementation phase is a must during your due diligence phase.  You should consider what your timeline is, the resources you have available and the level of support that you may receive.  The implementation may not be too challenging, but you will need to ensure you have resources available to make such a project doable.  Implementation will require support from both the vendor’s team and your internal implementation team – whether it’s an entire HR Technology team or just a team of one.  Getting the data over may be straightforward and easy, but we recommend asking a number of questions during the demo and applying a healthy dose of skepticism if it sounds too easy. 

Key points to consider and questions to ask during a demo:

  • What is the typical implementation timeline?
  • Who should be involved (from the Company-side) during the implementation process?
  • Can our old matches be loaded into the tool?
  • Do you integrate with our HRIS?
  • How do we load our salary surveys?

Ongoing Support and Maintenance

Once your salary benchmarking tool is set up, you must maintain the data.  We find that most companies update their data on a monthly basis, but you may require a different cadence.  Understanding how to keep your system updated and how to ensure that your daily usage can be supported by the right people is important.  One of the biggest reasons we hear people are leaving their current compensation benchmarking service is because of customer support and service.  Understanding the ongoing service model is worth asking during the demo. 

Key points to consider and questions to ask during a demo:

  • Who is our Account Executive going to be?
  • What is the Account Executive’s background? 
  • How log have they been with the Company?
  • On average, how often do Account Executives change clients?
  • How do we update salary surveys?

Compliance and Security

Last but not least, ensure that the salary benchmarking tool you choose complies with relevant laws and regulations concerning data protection and privacy. Look for features like encryption, two-factor authentication, and regular security audits. Compliance certifications can also be a good indicator of a tool’s reliability in this area.  For any reputable software company, compliance and security should be of utmost importance. 

If any of the bullet points, below, are not answered in the affirmative, consider a new software provider.  Given the importance of security, any provider that does not meet at these points below is not prioritizing your data security. 

Bare minimum security requirements:

  • Do the companies have a current SOC 2 Type II report?
  • Has the company conducted penetration testing and remediated any findings?
  • Can the salary benchmarking software support Single-Sign-On?
  • Are they compliant with privacy laws around the world, or minimally in the countries you operate in?  GDPR?  CCPA? 
  • Do they have a Data Privacy Agreement?

Your security team will likely play a role during the procurement process to review the salary benchmarking software company’s security posture.  This may be done through a vendor questionnaire or interview.  Involving your IT security department early on in the process is recommended. 

Budget and Pricing

Salary benchmarking tools often come with various pricing models, including subscription-based, one-time fees, or tiered pricing based on the number of employees or data points. Understanding these models is essential to making an informed decision. Make sure to consider not just the upfront costs but also the long-term financial implications.

Multi-Year Agreements

Most compensation benchmarking tools will provide discounts for long-term commitments.  This is a common practice for SaaS companies and is something you should evaluate during your discovery process.  CompTool, for example, provides a 30% discount for 3-year agreements. 

Hidden Costs

Be wary of hidden costs that may not be immediately apparent. Over the years, in talking to new clients, we’ve found that there are a lot of surprising hidden fees out there that you may not think to ask.  These could include charges for additional features, data updates, or customer support.  It is recommended that you ask, specifically, about any hidden fees that there may be.  A great way to get this information is to ask your sales representative what fees their customers have the most negative reaction to or what other potential charges and fees that there may be as your organization changes over time and adds employees or salary surveys. 

Though not a comprehensive list, we recommend asking your sales representative to address these points in the proposal:

  • What is the total price?
  • What are the discounts for a multi-year agreement?
  • Can any additional discounts be provided for full payment, up front?
  • How much is charged for additional salary survey file loads?
  • How many users are included and how much are additional users?
  • What is the additional charge if we add more employees?
  • What is the charge for a dedicated Account Executive?
  • Is there an implementation fee?
  • How much will the contract increase after the initial service term if we renew?
  • How much more will we be required to pay if we need to add new salary surveys?

There are no Silly Questions

Choosing the right software can create significant efficiencies and allow your Compensation Team to optimize their efficiencies, gain better buy-in and trust from the business, and elevate the reporting.  Choosing the wrong salary benchmarking company, at best, can be a waste of time and money, but at worse can expose your organization to risks of fair and competitive pay, as well as compliance and privacy laws. Using the questions in this article can provide a healthy starting point to your evaluation process.

Download Our Buyer’s Guide

At CompTool, we’ve spent a lot of time as Compensation Analysts and a lot of time in systems. Download our list of questions that you should consider asking during your evaluation process of market pricing tools.


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