How to Do a Simple Compensation Analysis (Even If You’re a Small Business)

Hiring the right talent is tough enough—offering the right compensation shouldn’t be a mystery! Here’s a quick, clear guide to help you make sure your pay is in line with industry standards and your business size.

1. Define the Role Clearly

• Write a detailed job description. Include responsibilities, required skills, and experience.

• Identify the job level. Is this entry, mid, or senior-level?

2. Gather Compensation Data

• Use free online tools:

  • Salary.com

  • Payscale

  • Glassdoor

• Check industry reports: Many associations (like SHRM) publish annual compensation guides.

• Consider your region: Salaries can vary a lot by location, even for remote roles.

3. Benchmark Against Similar Businesses

• Look for companies of similar size and industry.

  • Smaller businesses may pay a bit less than large corporations, but can compete with perks, flexibility, or growth opportunities.

• Note the average, low, and high range for the role.

  • Example: If the average for a Marketing Manager is $70k, but small companies pay $60–$65k, that’s your range.

4. Factor In Your Total Compensation Package

• Include benefits: Health insurance, PTO, remote work, bonuses, learning stipends, etc.

• Highlight unique perks: Flexible hours, wellness programs, or professional development.

5. Decide on Your Offer

• Start with your budget.

• Aim for the middle or upper end of your range if you need top talent or hard-to-find skills.

• Be transparent: Let candidates know how you arrived at your offer.

6. Review and Adjust Regularly

• Review compensation annually.

• Stay up-to-date: Industry standards shift, especially in fast-moving fields like tech.

Quick Example

Let’s say you’re hiring a Customer Success Manager for a 25-person SaaS startup in Seattle:

• Job boards show: $65k–$85k for similar roles.

• Small business average: $68k.

• Your budget: Up to $70k, plus remote work and a learning stipend.

• Your offer: $68k base + benefits + remote flexibility.

Final Tips

• Document your process: If you ever get questions, you’ll have data to back up your decisions.

• Ask for feedback: Candidates and current employees can help you stay competitive.

Need help with compensation analysis or want a custom report for your business? Let’s chat! Opus HR Solutions can help you take the guesswork out of pay.