# What is a Compensation Benchmark?

A compensation benchmark compares salaries to external data. SMEs use it to stay competitive and fair.

Source: https://faqtic.co/glossary/compensation-benchmark

## Why it Matters for SMEs

- Ensures fairness
- Attracts talent
- Supports retention

## Example in Practice

HR logs benchmark data in Factorial.

## Frequently Asked Questions

### Why benchmark?

To avoid under/overpaying.

### How often?

Yearly or market shifts.

### Data sources?

Surveys, job ads, recruiters.

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