Salary benchmarking is one of the most important steps your company will take when hiring new employees.With 90% of Canadian hiring managers reporting difficulty finding skilled talent, the best way to recruit top hires is to ensure your starting salaries remain competitive with the salaries of other firms in your industry and geographic area.The same goes for retention – if you want to keep your top performers, you’ll need to continuously adjust their salaries alongside your new recruits.So how to determine an employee’s salary? Let’s take a deeper look by answering some frequently asked questions about salary benchmarking Canada-based employers should know the answer to.
This depends on the size of the firm. In small businesses it's often the owner, or a dedicated manager wearing multiple hats, deciding how to determine an employee’s salary.By contrast, medium-sized businesses will typically have a dedicated HR staff member or team leverage specialized tools such as employee engagement interviews, the 2025 Canada Salary Guide From Robert Half, and our Salary Calculator tool when researching how to determine salary benchmarks.Large organizations, meanwhile, often employ entire compensation and benefits departments armed with sophisticated analytics software to fine-tune their salary benchmarking across multiple roles and regions.
Establishing how to determine salary benchmarks doesn’t just help with hiring – it can fortify your company’s retention efforts too.Money remains a significant factor in employees’ overall job satisfaction: According to the 2025 Canada Salary Guide From Robert Half, 51% of Canadian professionals feel underpaid, and if they don’t receive a raise this year one third – 33% – plan to look for a new role. Among professionals already seeking out new opportunities, 60% are looking for a higher salary.Whether your company has established a salary benchmarking strategy or not, your employees are conducting their own research. As they gain experience — and meet or exceed expectations — they’ll want to feel your company is compensating them appropriately.A regular compensation evaluation strategy can also uncover other important information, such as whether you’re overpaying for certain positions.Looking for additional insights into the current Canadian hiring market? Check out our blog on 2025 Canada Salary Trends: What Employers Need to Know.
Regardless of your company’s size or the tools used, regular employee engagement surveys or interviews are an excellent place to start, as they can be used to not only measure your business’s current performance, but gather ideas for improvement. If employees are not comfortable answering questions in person, using a third-party platform that anonymizes feedback can be an option too.The 2025 Canada Salary Guide From Robert Half and its Salary Calculator tool are also great resources for Canadian employers learning how to determine an employee’s salary, filled with compensation information and insights into the latest hiring trends. (So, too, is our Demand for Skilled Talent report, which we update regularly.). You might also check out online job boards for positions in your industry and region.Anecdotal information can be valuable too. When team members depart your organization, conduct an exit interview to gauge whether or not they felt fairly compensated. Consider that feedback when determining the salary level you will advertise for the open role.Robert Half follows a rigorous, multistep process to ensure our data accurately reflects the marketplace, incorporating exclusive survey data, salary information for professionals we’ve matched with employers across Canada, and a review of current and expected demand for each position, talent supply, and other market conditions using state-of-the-art large language models.Want more details about the methodology behind our Salary Guide research? See this post.
When considering how to determine an employee’s salary, establishing a fair base pay is essential. But wages aren’t the only thing to weigh in your overall salary benchmarking strategy. More companies are assessing their employee benefits and perks, vacation time, retirement savings plan matches and bonuses to land and keep valued staff.According to research for the 2025 Canada Salary Guide From Robert Half, the top three benefits valued by Canadian professionals are paid time off (cited by 69% of respondents), a retirement savings plan (53%), and health insurance (46%). Their top three perks, meanwhile, are flexible work schedules (65%), remote work options (53%), and a tie between employee discounts and wellness perks (both 34%).Remember that job duties can also evolve and expand significantly over time. Establish compensation for each role in a range rather than a specific amount so that you can factor in these variables.
Learning how to determine an employee’s salary is not a one and done process. Not only do salaries for a particular role change over time, based on the incumbent’s experience level, but the market value of some jobs can also change quickly — especially in this era of rapid technological innovation. Businesses’ growing adoption of new technologies enhances job expectations and, in some cases, creates entirely new professions.Many of the jobs needed in the future workplace will require professionals to have broader skill sets, which will, in turn, demand higher levels of compensation. As employees develop more expertise with cloud systems, automation and artificial intelligence (AI), for example, they will become increasingly more valuable because they can provide greater efficiencies, deeper insights and easier access to company resources for remote workers.The depth of technological knowledge required will vary from department to department in a company. While your business may not need to hire an AI specialist such as a programmer or engineer, for example, you may need to recruit a finance professional who has worked with AI and can identify AI use cases for the business.In fact, more than half – 51% – of hiring managers responding to research for the 2025 Canada Salary Guide From Robert Half say that advancements in AI and automation have already reshaped the most in-demand skills in Canada. Many of these span specializations and include:Project and program managementStrategy and executionResearch and analysisFinancial modelingCybersecurityCompliance and risk managementAs an employer, you’ll want to pay close attention to how jobs are evolving in response to technological change. You can also schedule a compensation evaluation when setting salaries for new positions you’d like to add to your team, including these emerging roles with new skill sets.The pay evaluation process at your firm should be ongoing but never routine, and always requires focused effort and thoughtful research. Remember also that evaluations of some jobs at your company may indicate that a role, though important, doesn’t need a full-time occupant. Adopting a flexible staffing strategy with the use of highly skilled contract professionals can allow you to tap specialized resources for these tasks without the cost of hiring a permanent employee.Robert Half offers a range of talent solutions to meet your staffing needs. Learn more about our services here.
