Salary market analysis: Reconciling your pay-data sources in a pay review

Pay benchmarking and market analysis is now the biggest use of artificial intelligence (AI) in reward. Across the reward teams surveyed for HR Datahub's Pay Planning Report 2026, 79% said AI was already affecting their work. Faster data is welcome, but it mostly puts more numbers on the table, and they rarely agree.

For most roles you'll have three figures: the survey median, what live job adverts offer and what you already pay. Managing pay budgets was the top HR priority for 2026, named by 36% of organisations in the Pay Planning Report 2026, so whichever figure you pick comes straight out of that pot.

Here's how I run a salary market analysis to land on one number I can defend.

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Salary market analysis at a glance

• A salary market analysis reconciles salary surveys, live job-advert data and internal pay into one defensible figure per role.
• Pay-data sources disagree because they differ in recency, sample and how closely they match the role.
• In a reconciliation table, each pay-data source is weighted on recency, sample and role match before the figures are combined.
• Live job-advert data is the strongest signal for scarce and fast-moving roles, while published salary surveys give a steadier read for established roles.
• A dated record of sources, weights and reasoning lets a pay figure stand up to challenge.

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What is a salary market analysis?

A salary market analysis compares what you pay for a role with what the external market pays, using one or more pay-data sources, and turns them into a recommended figure or range. UK employers usually run one before the annual pay review, while next year's budget is being set.

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Why your survey, market and internal numbers disagree

Your three pay figures disagree because each one measures something different. A survey reports what employers paid when it gathered the data, live job adverts show what employers are offering today, and your internal figure reflects decisions you made in past pay rounds. Timing, sample and role match explain most of the gap.

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Your sources are out of date

Two of your three sources are out of date by the time you use them. A salary survey collects its figures months before release and internal pay dates from each person's last pay decision, while job-advert data refreshes daily.

As I often put it, salary surveys benchmark what was, and we benchmark what is.

Our guide to the pros and cons of salary surveys covers where a survey still earns its place.

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Your samples are too small or skewed

Each source's sample can be too small or skewed to price your role. A survey median reflects the sectors and company sizes that took part, while live market data only sees roles being recruited for, so it can skew towards higher-turnover jobs.

Your internal figure usually has the smallest sample, sometimes just a handful of people, so one outlier hire can drag the whole number.

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Your roles don't match their titles

Your roles often don't match the job titles you're comparing them with, because titles vary widely between employers. A "payroll manager" in one survey might run a team of six, while the same title on an advert covers a one-person function.

We've added job levelling to HR Datahub to help with this. The downside is that it depends on the quality of each job posting, and it doesn't weigh your organisational context the way a formal job evaluation does.

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A salary market analysis framework for one defensible number

A salary market analysis gives you one number you can defend by weighting each conflicting source on its evidence. I use three steps: weight each source, lay the results out in a reconciliation table, then settle on a single figure and record why.

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Step 1: Weight each source

Give each source a weight out of 100 on recency, sample and role match, cutting it sharply if it fails one badly.

The key difference is how fast the role's market moves. For a stable operational role, like a warehouse team leader with plenty of local candidates, the survey can carry the most weight. For a scarce or fast-moving role, live market data should lead.

Our guide on how to conduct salary benchmarking covers gathering the data itself.

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Step 2: Build the reconciliation table

A reconciliation table puts every source and its weight on one page, so anyone reviewing the decision can follow your working. These example weights suit a stable, well-matched role:

Multiply each figure by its weight and add the results.

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Step 3: Settle on one figure

I test the weighted figure against three questions: can we hire at this number, does it sit sensibly against the roles either side, and can the budget carry it?

If any answer is no, move the figure and write down why. Our guide to building a competitive compensation strategy covers the wider pay policy behind those calls.

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Worked example, three numbers into one defensible figure

This worked example runs a salary market analysis on one role, a senior payroll specialist in Birmingham, and lands at £50,000. The numbers are round and illustrative, and each source's weight reflects how recent it is and how well it matches the role.

Here's how I'd weigh up the three sources:

• Published salary survey, £45,000, weighted at 25%: The survey's payroll category mixes junior and senior roles, so it's a loose match.
• Live market data, £52,000, weighted at 45%: Recent adverts match on duties and location, and two vacancies have sat open for months.
• Internal midpoint for the grade, £48,000, weighted at 30%: It matches closely, but the grade is two years old.
• Weighted figure, £49,050: That's £11,250 plus £23,400 plus £14,400.
• Final figure, £50,000: Rounded up for the open vacancies and kept below the team leader's £51,000.

It's a tricky one: £50,000 is within £2,000 of the adverts, which should be enough to fill both vacancies. Both reasons go in a note under the table.

On scarcer roles, the gaps run wider:

I had a case involving a senior digital performance role in the UK where survey median sat around £58,000, live market pricing was landing closer to £72,000 to £78,000, and our internal benchmark for comparable team level sat at £54,000. [...] I landed at £68,000 because it sat at the point where we could hire credibly without breaking internal pay logic."

Dieter Blom, Director at Versys Media

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Which salary benchmarks answer which question

Each salary benchmark answers a different question, so the right weighting in a salary market analysis depends on what you need to know. Surveys are strong on how pay has moved; where they fall down is the market rate salary for a specific, hard-to-fill role here and now.

The upside of live market data is how current it is. The downside is that advertised pay can differ from what the successful candidate accepts, and we don't hold actual employee pay data. Our view is built on more than 40 million UK job postings, as our features page sets out. In a larger enterprise, I'd treat it as one input of three, as I've done here. Plenty of small and mid-sized employers do fine with a single source, and ours is often enough on its own.

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Making your salary market analysis defensible

A salary market analysis is defensible when someone else can trace the final figure back to its sources by reading your file. That means filing the reconciliation table, each source's date, your weights and the reason for any pay premium at the time you decide.

You'll need that record when someone questions a pay difference, and in my experience someone always does. The Advisory, Conciliation and Arbitration Service (Acas) sets out the risk in its guidance on equal pay law. An employer might have to prove that a person's qualifications and skills are crucial for the job, and that it struggled to hire and keep people in it.

A dated market read, alongside your own vacancy history, gives you written evidence to point to. Pay transparency puts more of your figures on show too: 52% of employers surveyed for the Pay Planning Report 2026 were already publishing pay ranges.

"I'd write that reasoning down at the time, because six months later, the number might still be there, but everyone may have forgotten why it was chosen."

Deepak Shukla, Founder & CEO of Pearl Lemon Placements

Our guide to pay equity covers checking those figures for gaps across your structure.

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Common pitfalls in a salary market analysis

Most reconciliation problems in a salary market analysis come from how you use the sources, and you can catch each one before a figure goes to sign-off. Here are the three I check for in every pay review, with a quick fix for each:

1. Averaging the three numbers. A straight average gives a loose survey match the same pull as an exact internal one. Weight first.
2. Matching on job title alone. Two roles with one title can sit a grade apart, so check duties, team size and reporting line first.
3. Letting the newest number win by default. A thin set of adverts for a niche role can swing widely, so check how many adverts sit behind the figure.

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Frequently asked questions about salary market analysis

Is a salary market analysis the same as a compensation analysis?

A salary market analysis and a compensation analysis overlap, but they differ in scope. Compensation analysis is the more common US term and often covers total reward, including bonuses and benefits, or an internal pay equity review. A salary market analysis focuses on base pay against the external market, and for most roles base pay is still king.

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What is the salary review process?

The salary review process is the yearly cycle in which an employer sets its pay budget and decides pay increases for the year ahead. A salary market analysis feeds its market-data stage, giving each role an evidenced figure before individual awards are agreed.

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How often should you run a salary market analysis?

Run a salary market analysis at least once a year, before setting your pay review budget. For scarce or fast-moving roles, check live market data every quarter or whenever a vacancy stays open longer than you'd expect, as advertised pay for those roles can change a lot within a year.

At HR Datahub, our live pay evidence is updated daily from more than 40 million UK job postings. That means a quarterly check reflects current market reality, not last year's assumptions.

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Put the market read at the centre of your next pay review

Before your next pay review, build the reconciliation table for your hardest-to-fill or high-risk roles first and agree the weights with finance early. Start with one role: all three numbers, the weights and the reasoning on a single page. With that page on file, the figure is yours to defend.

Those figures then feed into the rest of your pay review process. Once a figure is agreed, our guide to salary adjustments covers putting the change through for each person.

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