Salary benchmarking is the process of comparing your organization’s compensation practices to those of similar organizations in your industry or region. Learn more about how to develop equitable compensation strategies by conducting salary benchmarking, creating compensation structures, and developing and implementing compensation philosophies that promote pay transparency and equity.
Salary Benchmarking for Nonprofits
Salary benchmarking is the process of comparing your organization’s compensation practices to those of similar organizations in your industry or region. This process helps ensure that your nonprofit offers competitive salaries, which can contribute to improved employee retention and satisfaction. At a high level, the steps to conduct salary benchmarking include:
- Identify relevant salary surveys and data sources that focus on nonprofits or your specific sector.
- Select comparable job roles within your organization, taking into account factors such as related experience, education, responsibilities, and lived experiences.
- Analyze and compare the collected data to identify any significant pay discrepancies or gaps.
- Adjust salaries and compensation packages accordingly to address any disparities and ensure competitiveness in the market.
Creating Compensation Structures
Developing a well-defined compensation structure can help your nonprofit maintain pay equity and transparency. A clear compensation structure accomplishes these four goals:
- Defines salary ranges and pay grades based on job roles and responsibilities.
- Considers factors such as experience, education, and location in determining pay.
- Ensures that compensation is consistently applied across the organization, preventing pay disparities.
- Allows for regular reviews and adjustments to maintain market competitiveness and compliance with relevant laws and regulations.
Your compensation structure should operationalize the compensation philosophy that serves as your guiding framework for making compensation decisions. The philosophy should be easy for managers and employees to internalize and align with your organization’s values, goals, and mission.
At Positively Partners, we are committed to helping nonprofits, schools, and social impact organizations develop and implement equitable compensation strategies that promote pay transparency and equity. Our team of experienced consultants can guide you through the process of salary benchmarking, creating compensation structures, and developing a compensation philosophy tailored to your organization’s unique needs.
You can learn more about our services online or by contacting us at compensation@positivelypartners.org.
