Research Project: Benchmarking Practices

Posted November 18, 2025

In Compensation Management, Executive Compensation, General News, Salaries & Incentives

Staying Competitive: Employer Compensation Philosophy, Strategy & Benchmarking

A clear and well-implemented compensation philosophy is increasingly important in today’s competitive labour market. Yet while most employers recognize its value, the extent to which these philosophies and strategies are formalized, communicated, and aligned with business objectives varies considerably.

To explore how Canadian organizations are approaching compensation governance, benchmarking, pay positioning, communication, and the impacts of external pressures such as inflation and pay transparency, WCBC conducted the Employer Compensation Philosophy, Strategy & Benchmarking Survey in October 2025, with participation from 133 employers.

The results offer a current snapshot of practices across sectors and highlight where employers are focusing their efforts to improve alignment, consistency, and employee understanding.

Group of people meeting with technology and paperwork. Close up of digital tablet and laptop computer with market analysis data on the screen. The documents have financial or marketing figures, graphs and charts on them. Multi ethnic group including Caucasian, latin and African American

Here are some of the highlights:

- - Formalization is growing, but not universal.
    Most organizations have a documented compensation philosophy (58%) and strategy (57%), though smaller employers remain less likely to formalize their approach. The absence of structure is typically due to prioritization or resourcing rather than lack of intent.
  - Market competitiveness remains the dominant driver.
    Most philosophies emphasize market positioning, internal equity, and total rewards, with fewer prioritizing pay-for-performance or tenure-based principles.
  - Communication is inconsistent.
    While many organizations share their philosophy broadly, fewer communicate their strategy or ensure employees fully understand how pay decisions are made. More than half are actively working to improve employee understanding.
  - Market data use is nearly universal.
    Benchmarking is central to compensation management, with most organizations referencing multiple sources—particularly industry-specific surveys. However, job matching and data relevance remain persistent challenges.

- - Technology use is limited.
    Manual processes and spreadsheets dominate compensation administration. Only a minority use integrated compensation management systems or automation tools, and cost and integration complexity remain key barriers.
  - External pressures drive selective responses.
    Inflation, cost of living, and economic performance are the leading external drivers of pay adjustments. Most organizations respond through measured adjustments to salary structures or targeted pay changes rather than broad-based increases.
  - Change is measured and pragmatic.
    Most employers expect incremental refinements rather than major shifts in their compensation approach over the next year. Planned changes primarily target base pay structures, benchmarking, and benefits offerings, with limited consideration of non-traditional pay models.

Why Participate in Future Research?

Organizations that participate in WCBC’s surveys gain exclusive access to the full results—detailed data that can inform your HR strategy, benchmark your practices, and support evidence-based decision-making. By contributing to our research, you not only shape the conversation—you gain insights that help you lead it.

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