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Compensation and benefits are often named the top things candidates prioritize when considering a new job. This can feel daunting for hiring teams that know they can’t compete with larger, better funded, or more profitable organizations.
But the truth is, competitive compensation looks different for every organization. What matters is offering pay and benefits that align with your company culture and attract the right talent for your team. Think of it as finding your compensation sweet spot rather than trying to match every offer on the market.
Let’s explore what makes pay and benefits competitive, how to benchmark your offerings, and how to communicate them effectively to candidates.
Why competitive pay and benefits matter
Your compensation strategy directly impacts your ability to build a skilled team — from attracting the right talent to retaining them.
Attract talent
Candidates research your company before applying — and they want to know what you can offer in exchange for their skills and expertise.
About 74% of candidates look for salary information, while 70% specifically search for benefits details during their research process. The information you share can have a notable impact on your talent pipeline; 70% of job seekers cite competitive salary and benefits as a key motivator to apply. These numbers tell a clear story: you may be missing out on a significant portion of the talent pool if your compensation falls short.
Clear, competitive compensation packages make it easier for qualified candidates to self-select, reducing friction in the hiring process and saving everyone time.
Increase offer acceptance rate
Strong compensation packages improve your odds of landing candidates after you’ve invested time in interviewing and evaluation. About 56% of team members would consider another job offer for better pay, with most requiring at least a 10% salary increase to make a move. Understanding these benchmarks helps you position offers that candidates will accept.
When candidates withdraw from the hiring process, pay and benefits rank among the top reasons. Research on candidate ghosting shows that 42% cite higher pay as something that would prevent them from withdrawing, while 38% point to better benefits. Another 41% say better pay transparency would keep them engaged in your process.
Benefits matter just as much as base salary in acceptance decisions. About 40% of team members would leave their current employer for better benefits elsewhere, even with no salary increase. You can increase the likelihood candidates will say yes to your offer when your total compensation package addresses what they value most.
Retain talent
Pay influences why team members stay with your organization long-term. Research shows that 48% of team members who remain with their current employer point to pay as a top motivator for staying, while 41% cite job security and 36% mention health benefits.
According to data on why team members voluntarily leave their companies, 16% cite pay and benefits as their primary reason for departure. While this percentage might seem modest, it represents preventable turnover when you maintain competitive compensation.
Benefits play a significant role in retention decisions. About 54% of team members stay with their employers because of their benefit packages. When team members have more choice in their benefits, 82% intend to remain with their employers. This suggests that flexibility and personalization in benefits offerings strengthen retention as much as the benefits themselves.
How to benchmark competitive pay
Competitive pay isn’t about offering the highest compensation — it’s about finding what works for your organization and the people you want to work there.
Start by collecting market data. It’s a best practice to multi-source your salary data to get a better understanding of current market pay rates.
Data sources may include:
Factor in key variables that should influence a competitive pay range, such as:
What makes benefits competitive
Skilled candidates expect a comprehensive package that supports their whole lives.
Nearly two-thirds (62%) of employed adults say that it’s extremely important to them to have a job that offers paid time off. About half (51%) said health insurance was extremely important, 44% cited the importance of a retirement program, and 43% reported that paid family and medical leave mattered.
The new essentials
Some benefits have shifted from “nice to have” to “must have” in recent years.
These include:
Communicating competitive pay and benefits
You can offer outstanding compensation, but if candidates don’t understand it, you’ll lose them to organizations that communicate more clearly.
Getting job postings right
Transparency in job postings builds trust from the first interaction and helps candidates self-select.
This can boost qualified applications and keep candidates engaged. Job posts with benefits sections that focus on compensation see 25% higher apply rates compared to those highlighting generic benefits. And research on candidate ghosting reveals that 41% of job seekers say better pay transparency would prevent them from withdrawing from the process.
When writing job postings, include:
Avoid overpromising. If you mention “unlimited PTO,” clarify what that means in practice. If you highlight “competitive benefits,” specify which ones and why they matter.
Building transparency throughout hiring
Compensation conversations shouldn’t wait until the offer stage. Progressive organizations discuss pay throughout the hiring process to align on expectations. This saves everyone time and builds candidate confidence in your process.
Share your compensation philosophy with candidates. Explain how you determine pay, what influences raises and promotions, and how you ensure equity. This transparency can differentiate you from competitors.
Using your ATS for consistency
Structured workflows in your applicant tracking system help maintain consistency and compliance.
Consider building:
These systems prevent inconsistent messaging and protect you from compliance issues. They also speed up your hiring process by eliminating back-and-forth about compensation details.
Following up with transparency
After extending a verbal offer, provide clear documentation of total compensation. Break down base salary, bonus potential, equity value, benefits costs, and unique perks. Many candidates undervalue benefits because they don’t understand their true cost or value.
A comprehensive compensation summary might include:
This level of detail helps candidates make informed decisions and reduces buyer’s remorse after acceptance.
Final thoughts on competitive pay and benefits
Competitive pay and benefits don’t mean offering the highest salary in your market. They mean providing compensation that aligns with your company values, meets candidate expectations, and supports your team members’ whole lives.
Start by understanding what candidates in your market truly value. Benchmark your compensation against relevant competitors. Build a benefits package that reflects your culture and priorities. Then communicate everything clearly and consistently.
Your compensation strategy is never finished. Market conditions shift, candidate priorities evolve, and your own business needs change. Review your offerings at least annually, stay connected to market trends, and keep listening to what your team members tell you matters most.
The organizations that win on talent aren’t always those with the biggest budgets. They’re the ones that understand their unique value proposition and communicate it authentically to the right candidates. That’s what truly competitive pay and benefits look like.
