Compensation Strategy & Salary Structure Design

Compensation Strategy That Holds Up Under Scrutiny

Most mid-market companies have salary ranges. What they lack is a system connecting those ranges to market data, internal equity, business strategy, and defensible logic.

That is not a small gap. It is the difference between pay decisions that feel right and pay decisions you can explain to a board, a regulator, or an employee who asks why their offer came in where it did.

The Barksdale Group designs compensation strategies and salary structures for organizations with 200 to 2,000 employees. We use real survey data, regression-based modeling, and AI-augmented tools to build infrastructure that works after we leave.

What Compensation Strategy Consulting Actually Involves

A compensation strategy is the documented framework that guides every pay decision your organization makes. It answers four questions:

1. Where do we want to pay relative to market? This is your target percentile. Most organizations target the 50th percentile (market median) for base pay, but that is not always the right answer. A PE-backed company in acquisition mode may need P60-P75 for critical roles. A nonprofit may target P40 base with a strong benefits package to make up the gap.
2. What data sources anchor our market view? Compensation surveys from publishers like Mercer, Radford, Payscale, and Western Management Group provide the market reference points. The quality of your strategy depends on the quality of your matches and the rigor of your aging and blending methodology. See our salary benchmarking practice for details.
3. How do we balance internal equity with external competitiveness? Every organization faces tension between paying market rates and maintaining fair relationships between jobs internally. A salary structure formalizes this balance through grade assignments, range spreads, and midpoint progressions.
4. What is our pay mix philosophy? How much of total compensation comes from base salary versus short-term incentives versus long-term incentives? This varies dramatically by industry, level, and ownership structure. A government contractor's pay mix looks nothing like a tech startup's.

Our Approach to Salary Structure Design

We build salary structures using regression-based methodology, not arbitrary rounding.

Market Pricing. We match your jobs to published compensation surveys, evaluate match quality, age data to a common effective date, and blend multiple sources into composite market rates. Every match is documented with a quality rating so you can see exactly where your numbers come from. Full details on our salary benchmarking page.

Structure Modeling. We plot your market data against job grades and run regression analysis to establish a best-fit market line. From that line, we derive grade midpoints and apply range spreads (typically 40-60% for professional roles, 20-30% for hourly roles). The result is a structure where every range is mathematically connected to market data, not a manager's gut feeling.

What this looks like in practice: For a 500-employee PE-backed services company, we built a 16-grade structure using regression on 62 benchmark jobs from three survey sources. The regression produced an R-squared of 0.94. Before the engagement, the company had 47 unique salary ranges set by individual negotiation over five years. After the engagement, every range was traceable to documented market data with a clear midpoint progression of 10% between grades.

Compa-Ratio and Range Penetration Analysis. Once the structure exists, we analyze where every employee sits relative to their range. This reveals compression, inversion, and outlier issues that need attention before the structure goes live.

Costing and Implementation Modeling. We model the cost of moving employees into the new structure under multiple scenarios: immediate correction, phased correction over 2-3 merit cycles, or targeted adjustments for the highest-risk cases first. You see the dollar impact before committing.

Who This Is For

This service is built for organizations at an inflection point:

• You are growing past 200 employees and ad hoc pay decisions are creating internal equity problems
• A PE firm acquired you and the operating partner wants defensible compensation infrastructure within 90 days
• Your salary ranges have not been updated in 2+ years and you are losing candidates
• You need to post salary ranges to comply with state pay transparency laws but your current ranges are unreliable
• Your DCAA auditor flagged your compensation practices and you need a defensible structure for government contract billing

What You Get

• Compensation philosophy statement reviewed and approved by your leadership team
• Market pricing workbook with documented survey matches, aging factors, and composite rates for every benchmarked job
• Salary structure model in Excel with formulas (not hardcoded numbers) for grade midpoints, ranges, and progression rates
• Employee placement analysis showing compa-ratios, range penetration, and red/green circle identification for your full population
• Implementation cost model with phased correction scenarios tied to your merit budget

Why The Barksdale Group

This work is led by a practitioner who has built salary structures at Mercer, Korn Ferry Hay Group, SullivanCotter, and multiple PE-backed defense contractors. Not a generalist HR consultant. Not a junior analyst supervised by a partner who shows up for the kickoff and the final presentation.

We use AI-augmented tools that compress delivery timelines without sacrificing analytical rigor. The mechanical data processing that typically extends traditional engagement timelines is handled by AI tooling. You pay for expertise and output, not overhead. Learn about our AI-powered compensation tools.