Salary Benchmarking Methodology: Understanding Korn Ferry, Mercer, and Aon Approaches

Effective salary benchmarking is essential for organisations to attract, retain, and motivate top performers. Benchmarking ensures pay decisions are grounded in reliable market data rather than anecdotal or internal comparisons.

Three of the most trusted sources for market remuneration data globally and across Australia, are Korn Ferry, Mercer, and Aon. While their methodologies share common principles, each provider brings unique frameworks, databases, and analytical approaches to support evidence-based reward decisions.

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1. Korn Ferry Methodology

Korn Ferry is known for its Job Evaluation and Grading Framework (Hay Method), which provides a consistent approach to comparing roles across industries and geographies.

Key Methodology Components:

• Job Evaluation:

  Korn Ferry’s Hay Guide Chart–Profile Method evaluates roles using three core factors:

  • Know-How: the knowledge and skills required to perform the role

  • Problem-Solving: the complexity and creativity needed to address challenges

  • Accountability: the level of impact and responsibility for results

    Each role is assigned Hay Points, which determine its internal job size and enable comparison across markets.

• Market Data Calibration:

  Roles are matched to Korn Ferry’s proprietary global database of compensation data. The database covers thousands of roles across sectors and levels, providing robust base salary, total cash, and total remuneration benchmarks.

• Outputs:

  Organisations receive detailed pay reports by job size, industry, and geography. Data can be segmented by percentile (e.g., 25th, median, 75th) and used to build pay ranges or salary bands linked to internal grading structures.

Best For:

Organisations seeking to align internal job evaluation with external market data for a fully integrated grading and pay framework.

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2. Mercer Methodology

Mercer operates one of the world’s largest compensation databases, underpinned by rigorous job matching and market data validation processes. Their approach combines standardised job evaluation with market pricing analysis.

Key Methodology Components:

• Mercer Job Library (IPE Framework):

  Mercer’s International Position Evaluation (IPE) assesses jobs based on factors such as impact, communication, innovation, and knowledge. Each role is assigned an IPE Level, which facilitates comparison across organisations and industries.

• Market Pricing:

  Mercer collects verified pay data from participating organisations annually, adjusting for currency, inflation, and local market conditions. The database is segmented by country, industry, and job family.

• Reports and Insights:

  Mercer provides benchmark data for fixed pay, total cash, and total remuneration. Additional insights include market trends, pay mix analysis, and gender pay comparisons.

Best For:

Multinational organisations seeking consistency across multiple regions or those using Mercer’s broader Talent and Reward solutions for integration with workforce analytics, benefits, and mobility data.

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3. Aon Methodology

Aon (including its Radford surveys and McLagan heritage) focuses on data-driven benchmarking tailored to specific industries such as financial services, technology, and life sciences.

Key Methodology Components:

• Job Matching Framework:

  Aon uses a standard job architecture aligned with its global databases. Jobs are mapped based on function, level, and complexity to ensure accurate peer comparison.

• Data Sources and Validation:

  Aon collects data directly from participating companies, ensuring validation through multiple checks for outliers and consistency. The datasets are refreshed annually, with some industries (e.g., tech) updated more frequently.

• Analytics and Outputs:

  Aon provides percentile-based pay benchmarks and allows custom peer group analysis. Advanced analytics include pay equity diagnostics, incentive prevalence studies, and total rewards strategy modelling.

Best For:

Organisations seeking deep sector-specific insights, especially in competitive or rapidly evolving markets such as technology, professional services, and banking.

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Comparative Overview

Feature / Focus Area	Korn Ferry	Mercer	Aon
Job Evaluation Framework	Hay Guide Chart–Profile Method	International Position Evaluation (IPE)	Standard Job Architecture
Primary Strength	Internal equity + external data	Global consistency + robust data coverage	Industry-specific depth + analytics
Data Frequency	Annual (some updates mid-year)	Annual	Annual / semi-annual (varies by sector)
Output Type	Hay points, pay range calibration	Market percentiles and insights	Peer group analytics, pay equity insights
Best Fit For	Organisations using Hay grading	Global or multi-country organisations	Industry-focused firms (e.g., tech, finance)

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Best Practice Insights for Using Benchmark Data

• Use multiple sources: Cross-reference two or more surveys to validate findings, especially for critical or hard-to-benchmark roles.
• Focus on job content, not titles: Always match roles based on responsibilities and scope, not job titles, to ensure comparability.
• Adjust for internal alignment: Integrate benchmarking outcomes with your internal job architecture or grading framework.
• Revisit annually: Market conditions shift; regular reviews ensure pay remains competitive and aligned with strategic goals.
• Combine data with judgement: Market data is a guide, not a rule — use it alongside business context, performance, and affordability considerations.

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Korn Ferry, Mercer, and Aon represent the gold standard in global remuneration benchmarking. Each offers a distinct methodology, but all provide the data integrity and analytical depth needed to make confident, equitable pay decisions.

By understanding their approaches and leveraging data strategically, HR and reward professionals can ensure their organisation’s pay practices are both competitive in the market and aligned internally — a critical balance in today’s complex talent landscape.