Compensation Benchmarking: A Strategic Guide for HR Executives

Building Competitive, Equitable, and Retentive Pay Structures

As an HR executive, you know that compensation isn’t just about numbers—it’s a critical component of your organization’s talent strategy. Whether you’re addressing employee concerns about pay or losing top talent to competitors, a well-executed compensation benchmarking project can transform how your organization attracts and retains employees.

Here’s what you need to know to approach compensation benchmarking effectively and ensure it supports your business goals.

What is Compensation Benchmarking?

Compensation benchmarking involves comparing your organization’s roles with external market data to determine their market value. By analyzing salary data from multiple reliable sources, you can ensure that your pay structures are competitive and aligned with market trends.

But it’s not just about matching numbers. Effective benchmarking also considers your organization’s compensation philosophy and internal equity, making it as much an art as a science.

Two Approaches: Internal vs. External Benchmarking

The question for many HR leaders is whether to manage the process in-house or bring in a compensation consultant. Let’s break down the considerations for each approach.

Conducting Benchmarking In-House

For organizations with a well-resourced HR team, managing benchmarking internally can be a cost-effective solution. To succeed, you’ll need the following:

1. Reliable Salary Surveys

Investing in at least three credible salary surveys is essential for accurate benchmarking. These can cost anywhere from a few hundred to tens of thousands of dollars, depending on your industry and location. Free online salary data often lacks the precision and credibility required for effective benchmarking.

2. Expertise and Time

Benchmarking is detail-oriented and time-consuming. Experienced compensation professionals spend 15–30 minutes per role, while less experienced individuals face a steep learning curve. Mistakes—like misinterpreting data or selecting incorrect benchmarks—can lead to costly errors in your pay structure.

Key Challenges

• Ensuring your job descriptions are accurate and up-to-date.

• Balancing the time commitment with other HR priorities.

• Interpreting data correctly to avoid overpaying or underpaying employees.

If your team has the tools and expertise, in-house benchmarking may work. Otherwise, outsourcing can provide valuable insights and efficiencies.

The Case for Hiring a Compensation Consultant

When resources are stretched or expertise is limited, working with a compensation consultant offers several advantages:

1. Comprehensive Survey Data and Tools

Consultants have access to extensive, reliable salary surveys across industries, regions, and job levels. They use sophisticated tools to aggregate and analyze data, ensuring accuracy and consistency.

2. Compensation Expertise

Many HR teams lack specialists in compensation. Consultants bring deep expertise, industry knowledge, and a focus on pay strategy. They can identify salary gaps, calculate the cost of adjustments, and provide recommendations for aligning pay with your organizational goals.

3. Actionable Insights

Beyond benchmarking, consultants guide you on implementing changes. For example, they can analyze pay gaps, assess competitiveness, and help communicate adjustments to employees—all while keeping the process aligned with your compensation philosophy.

Potential Challenges

The primary downside to hiring a consultant is that they don’t have institutional knowledge of your workforce. Accurate job descriptions and collaborative input are critical to ensuring a successful project.

Why Benchmarking Matters to HR Leaders

Done well, compensation benchmarking provides significant benefits to HR leaders:

• Enhances Retention: Competitive pay structures help retain top performers.

• Improves Recruitment: Market-aligned salaries attract high-quality talent.

• Controls Costs: Data-driven decisions minimize unnecessary payroll expenses.

• Supports Equity: Transparent structures ensure fairness and legal compliance.

By aligning your pay practices with market trends and organizational goals, you’re investing in a compensation strategy that supports both your workforce and your business outcomes.

Proklamate: Your Partner in Compensation Benchmarking

At Proklamate, we specialize in tailored compensation benchmarking solutions designed to empower HR leaders like you. Our approach goes beyond generic salary reports to deliver actionable insights:

• Geographic-Specific Analysis: Understand pay trends in your local market.

• Job Tenure Analytics: Evaluate pay based on experience and career progression.

• Top Matches for Your Roles: We provide detailed comparisons for the three best-matched positions to ensure accuracy.

Best of all, there are no subscriptions or strings attached—just project-based support when you need it.

We also collaborate with America’s premier HR consulting firms, connecting cutting-edge data with professionals who understand the human side of compensation.

Start the new year with a strategic pay structure that positions your organization for success. Contact Proklamate to learn how we can help you build a competitive and equitable compensation strategy that delivers real results.

The Miraculous Economics of the $5 Rotisserie Chicken: An Ode to a Modern Marvel

Let’s be real. If you asked me to personally bring a rotisserie chicken to market—raise it, care for it, butcher it, pluck it, season it, roast it, package it, and finally deliver it with a golden, crispy finish—I’d probably quote you $1,000. (Yes, per chicken.) But grocery stores, in all their rotisserie wisdom, have somehow cracked the code, offering this fully-cooked marvel for as little as $5 to $7. The big question is: how?

Well, buckle up, because we’re about to dissect the rotisserie chicken industry in all its economical glory. You’ll see how supply chains, economies of scale, and yes, a sprinkle of consumer psychology all help create one of the tastiest bargains in the store.

Step One: Vertical Integration—From Chick to Cluck

Grocery giants like Costco and Walmart sell rotisserie chickens at prices that often undercut raw chicken itself, and it’s not just altruism. Costco, for example, invested $450 million in its own Nebraska poultry plant, giving it end-to-end control over production. This vertical integration is key because they eliminate intermediaries, lower costs, and gain control over every step of the supply chain—from hatching to roasting.

But does it actually make sense to raise chickens this way? For Costco, it’s a resounding yes. By raising nearly 100 million chickens annually, they gain efficiencies that drop per-chicken costs significantly. When you consider that the average wholesale cost of a chicken is around $0.90 per pound (depending on fluctuations in feed and fuel), the basic cost of raw materials isn’t far from the retail price. Costco’s model cuts costs by controlling everything from the feed to the slaughter, giving them an edge over competitors relying on third-party suppliers.

Step Two: Economics of Scale—More Chickens, Lower Costs

Now, the simple math: buying, processing, and cooking millions of chickens means the unit cost goes way down. By operating at this scale, retailers distribute fixed costs like labor, equipment, and processing across each bird, significantly reducing the average per-chicken cost. It’s like your Econ 101 dream scenario, where every doubling of output results in a lower average cost.

Let’s say Costco’s Nebraska plant processes around 2 million birds per week. Dividing out all the fixed costs means that each bird might only cost a few dollars, including processing. The economics are clear: Costco can charge $4.99 per chicken, break even (or make a small margin), and still attract the masses.

Step Three: The “Loss Leader” Strategy—Getting You in the Door

Costco’s rotisserie chickens are a well-known “loss leader.” They might actually lose money on each sale, but the goal is to get you, the customer, into the store. Once you’re there, you’re likely to leave with a lot more than a chicken—a rotisserie chicken is often a gateway purchase to higher-margin items like organic produce, electronics, or that six-pack of artisanal muffins. Statistically, 60% of Costco shoppers pick up additional items beyond what they originally came for.

Think about it: you came for the chicken, but you left with $200 in goods that have 30% profit margins. Suddenly, the $5 chicken looks like a smart investment for Costco.

Step Four: Maximizing Margins with Minimal Prep

The real magic of rotisserie chickens lies in their simplicity. When you buy a ready-to-eat chicken, it saves you from having to roast, season, or clean up afterward. The cost of cooking each chicken is relatively low, especially since grocery stores already operate industrial kitchens to make prepared foods.

At scale, the additional energy to roast a chicken, combined with inexpensive bulk seasoning and automated machinery, results in minimal added cost per bird. And remember, they don’t have to hire a chef to cook your chicken—it’s just seasoned with salt, pepper, and a commercial blend of spices, thrown on a spit, and slow-cooked to perfection.

Step Five: Fun Facts and a Dash of Consumer Psychology

Why $4.99? Research shows consumers are particularly sensitive to “just under” pricing. A chicken priced at $5 might not seem nearly as appealing as $4.99, which has that psychological magic of being “under $5.” Clever, right? And once you see that juicy, golden skin in the store, it’s basically game over. (Also, rotisserie chickens are often placed at the back of the store—another psychological trick to make you walk past all the tempting aisles.)

Bringing it All Home: A Perfect Economic Storm

So, there you have it: the low-cost rotisserie chicken isn’t just the product of clever pricing or economy-of-scale magic. It’s the result of vertically integrated supply chains, strategic pricing, psychological insights, and, yes, a bit of old-fashioned loss-leading. Together, these factors create the $5 rotisserie chicken—a golden, juicy economic wonder that fills bellies and drives millions of dollars in extra revenue for the companies savvy enough to make it happen.

It’s a miracle of modern economics: no shortcuts, just strategic moves by companies that know how to work the system to bring an unlikely product to market—cheap, delicious, and irresistible.

Early Voting as a Bellwether for Presidential Elections: Predictive Power or Misleading Metric?

In every presidential election cycle, early voting data emerges as one of the most anticipated indicators for predicting voter turnout and potential outcomes. The 2020 election, for example, saw record-breaking early voting numbers, with over 100 million ballots cast before Election Day—accounting for nearly 73% of total ballots, according to the U.S. Elections Project. This surge led many political analysts and media outlets to suggest early voting was a reliable bellwether for the final election results. But as we analyze the data, it’s worth questioning: how useful is early voting as a predictor of presidential outcomes?

The Growing Impact of Early Voting

Over recent decades, early voting has surged in popularity. In 2004, only about 20% of votes were cast early; by 2020, that number had jumped to over 60%, according to Pew Research. This trend aligns with changing voter preferences for convenience and, more recently, pandemic-related concerns. Michael McDonald, a political scientist and director of the U.S. Elections Project, suggests that high early voting numbers can indicate high voter engagement, as “voters don’t typically turn out in large numbers early unless they are highly motivated to vote.”

However, early voting statistics don’t always tell us much about who voters support. Some early voters are from one party, while others represent the opposition, and motivations for voting early can vary greatly. As a result, interpreting early vote numbers without more granular data can lead to misleading conclusions.

Early Voting’s Limited Predictive Value

For economists and statisticians, early voting data poses challenges. Early voting rates alone don’t capture key factors such as voter sentiment shifts, turnout rates of late deciders, or even the partisan breakdown of election day voters. These uncertainties mean early voting numbers aren’t foolproof indicators of final results. Political analyst Nate Silver cautions that “while high early voting turnout can signal enthusiasm, it doesn’t clarify which side benefits, since both Democrats and Republicans increasingly vote early.”

One example highlighting early voting’s limits as a bellwether is the 2016 election. Many analysts interpreted high early voting among Democrats as a positive sign for Hillary Clinton. However, late-deciding voters ultimately swayed the election in Donald Trump’s favor. Similarly, in 2020, record-breaking early voting favored Democratic candidates initially, yet many states saw a surge of same-day votes for Republican candidates, illustrating how Election Day dynamics can swing results unexpectedly.

What Can Early Voting Tell Us?

Despite these limitations, early voting data can provide insights, especially when coupled with other indicators. For instance, in battleground states, early voting trends can reveal the level of voter engagement and even predict which demographics are turning out in larger numbers. For example, in Texas in 2020, unprecedented early voting turnout in traditionally low-voting counties suggested high engagement among young and minority voters, offering clues about changing electoral dynamics.

While economists can use early voting data to analyze voter engagement levels and demographic shifts, caution should be exercised in over-relying on it as a predictive tool. As David Wasserman of the Cook Political Report notes, “Early voting is a great snapshot of who is excited to vote early, but it’s only part of the bigger picture.”

Key Takeaways for Analysts and Economists

For students of economics and political science, early voting data provides a rich case study in the complexities of election forecasting. Like any economic indicator, early voting trends should be analyzed in context. When viewed alongside variables like voter sentiment, historical turnout data, and election day patterns, early voting can offer meaningful insights into voter behavior. However, relying on early voting alone as a bellwether for election outcomes can lead to significant misinterpretations.

In sum, while early voting provides valuable data on voter engagement and trends, it is not always a reliable predictor of election results. Understanding its limitations is essential, especially for those analyzing voter behavior and predicting electoral outcomes. As with any data set, early voting numbers are most useful when viewed as one piece of a larger, more complex electoral puzzle.