Salary Benchmarking: How to Set Pay That Attracts the Right People

Job titles in India are inconsistent. One company's "accounts executive" handles GST returns and Tally entries; another's only does data entry. Benchmarking titles alone will mislead you, so compare responsibilities.

Write down the core tasks, required skills, experience level, location, shift and any special requirement such as a two-wheeler, language skills or night work. These factors change the market rate significantly, so you need to match like with like.

Seniority is also tricky. Five years at a small shop may not equal five years at a larger chain. Benchmark against what the person will actually do in your organisation, and adjust for the level of independence and responsibility you expect.

• Main tasks and tools (for example Tally, Excel, CRM, forklift)
• Years of experience you actually need
• City and specific area, since pay differs within a metro
• Shift pattern, weekly off and overtime expectations
• Extras: two-wheeler, field travel, regional language, certifications

You do not need an expensive survey to get a reasonable picture. Combine several free sources and look for a consistent range rather than one exact figure.

Look at live job posts for the same role in your city on job portals, including BetterJobs and Google Jobs listings. Note the salaries stated and whether they are in-hand or CTC. Ask candidates during screening calls what they currently earn and what they expect; after a dozen calls you will see a clear pattern. Talk to peers in your industry association or trader network.

1. 1Collect 15–25 comparable job posts for your role and city
2. 2Record the stated pay, and mark whether it is in-hand or CTC
3. 3Add current and expected salary from your recent candidate calls
4. 4Remove extreme outliers at the very top and bottom
5. 5Note the low, middle and high points of what remains

A common mistake is comparing your CTC with a competitor's in-hand figure. Front-line candidates usually think in terms of in-hand pay, while white-collar candidates often talk in CTC. Always convert to the same basis.

CTC typically includes employer PF contribution, possibly employer ESI, gratuity provision, bonus and allowances. In-hand pay is what reaches the bank after employee PF, employee ESI, professional tax and TDS where applicable. Our explainer on CTC vs in-hand salary breaks this down. Statutory contribution rules can change, so confirm current rates with your payroll provider or a professional.

Once you have a range, choose your position deliberately. Paying at the middle of the market is a reasonable default for most roles. Paying towards the top can make sense for hard-to-fill roles or where turnover is very costly, like experienced machine operators or skilled developers.

Paying below the middle can work only if you offer something candidates value: fixed day shifts, a location close to residential areas, strong training or quick promotions. Be honest with yourself about whether those advantages are real.

Whatever you choose, write it down. A one-line pay philosophy such as "we aim to pay at or slightly above the local market midpoint, and review every six months" keeps managers consistent and gives you something honest to tell candidates and staff.

A salary band is a minimum, midpoint and maximum for each role level. Bands stop you from making random offers to whoever negotiates hardest, which creates resentment when colleagues compare notes on WhatsApp.

Start simple. For a role like customer support executive in a metro, you might set rough illustrative bands such as fresher, 1–3 years and team lead, each with its own range. The figures should come from your own research, and they will vary by city and industry.

• Entry level: for freshers and those learning the role
• Experienced: fully independent, meets targets consistently
• Senior or lead: trains others, handles escalations
• Keep a 20–40% spread within each band for growth

Candidates compare the whole package, especially in front-line roles. Petrol allowance for field staff, meals or canteen access, attendance bonus, overtime paid properly, accommodation for migrant workers and festival bonus can all tip a decision.

List these clearly in your job post and offer. A candidate choosing between ₹16,000 with free lunch and travel allowance versus ₹17,000 with nothing may well pick your offer, but only if they know about it. Also check that your pay meets the applicable state minimum wage for the skill category; rules are revised periodically, so verify the latest notification.

External benchmarking can reveal that new hires would earn more than loyal staff already doing the same job. This is one of the quickest ways to lose good people. Before you raise offers for new joiners, check where current employees sit in the new band.

If existing staff are below the new minimum, plan a correction, even if it is phased over a couple of months. Explain changes clearly. People accept a lot when they see the system is consistent.

Markets move, especially in fast-growing cities and during festive peaks. Review your bands every six months, and immediately if you notice warning signs.

Signals that your pay is off include fewer applicants than before, many candidates declining at the offer stage, high no-shows on joining day, and exits where people mention a better salary elsewhere. When you are ready to hire with your new bands, compare BetterJobs plans and pricing and start with the free plan.

Even with good bands, you will meet strong candidates whose expectations sit above your maximum. The worst response is to stretch the band for one person in secret; it usually becomes public within months and upsets the existing team. Instead, decide in advance how you will handle these cases.

First, check whether the candidate is really a fit for a higher level. Someone asking for a senior salary may genuinely have senior skills, in which case place them in the higher band with matching responsibilities. If they do not, explain your range calmly and point to the non-cash advantages: fixed shifts, training, faster review after probation or a shorter commute.

Second, consider a structured path rather than a bigger starting figure. Offering a review after three or six months with a defined increase if agreed targets are met lets a confident candidate prove their value while protecting fairness. Put the condition in writing in the offer so there is no confusion later.

Third, track how often this happens. If many good candidates are asking for more than your band, your benchmark is probably out of date. That is valuable data, and a sign that it is time to revise the band for everyone, including current employees.

1. 1Confirm whether the candidate's skills match a higher level
2. 2If yes, move them to that band with matching responsibilities
3. 3If not, explain the range and the full package honestly
4. 4Offer a written, target-linked review at three or six months
5. 5Log every such case and revisit the band if it keeps happening