A few weeks ago I was speaking with the HR Director of a small upper-tier municipality about the comparator organizations listed in their compensation policy.
As she reviewed the list, she paused at one name.
“I can understand most of these,” she said, sounding both puzzled and slightly frustrated. “But this one stands out. It’s on the other side of the province. It doesn’t offer the same municipal services we do, and it’s not even roughly the same size as our municipality.”
She looked at it again and said, “I have no idea how that one got on our list.”
For those of us who work in municipal compensation, this situation is probably familiar.
Comparator lists often remain in place for years — or even decades — without being revisited in a meaningful way. Over time, organizations forget why certain municipalities were added in the first place.
And sometimes the explanation is less strategic than we might hope.
Occasionally a comparator was included simply because the consultant conducting a review had recently worked with that municipality and still had access to their compensation data. It was convenient — not necessarily a good match.
While understandable at the time, decisions made for convenience can gradually undermine the purpose of compensation benchmarking.
Why Comparator Organizations Matter
Before deciding which municipalities belong on a comparator list, it is worth stepping back and revisiting a basic question:
Why do we use comparators at all?
Municipalities benchmark compensation in order to remain competitive in attracting and retaining talent.
At the same time, public-sector compensation decisions must be made responsibly. Municipal salaries are funded by taxpayers, and organizations must balance competitiveness with affordability.
Comparator selection therefore becomes a strategic decision. Choosing the right organizations helps ensure municipalities can recruit and retain the people they need without inadvertently driving compensation levels higher than necessary.
Follow the Talent: Let Labour Markets Guide Comparator Selection
The most effective way to select comparator municipalities is to consider a simple question:
Where do our employees come from, and where might they leave to go?
These labour market realities should guide comparator selection.
For smaller municipalities, talent often moves primarily between neighbouring communities. In these cases, local municipalities typically form the core comparator group.
For larger organizations, however, labour markets become more complex.
Front-line staff may still be recruited locally. Mid-level management might come from across a broader regional area. Senior leaders are often recruited from across the province — or sometimes nationally.
When this happens, a single comparator list may not accurately reflect the labour markets for all roles within the organization.
Not All Jobs Compete in the Same Labour Market
Another important factor is that different roles compete in different labour markets.
Many municipal positions are unique to the public sector. Roles such as by-law officers, municipal clerks, and certain public works functions are most appropriately compared with similar roles in other municipalities providing comparable services.
However, many other municipal roles exist across both the public and private sectors.
Positions in areas such as IT, Finance, HR, Legal, Procurement, Planning, Engineering, and Project Management all operate within broader labour markets.
In these areas, municipalities may be competing directly with private-sector employers for talent. If comparator groups include only other municipalities, organizations may overlook external market pressures that influence recruitment and retention.
This does not mean municipalities should necessarily match private-sector pay levels. But it does mean relevant market data should be considered when evaluating competitiveness.
Size and Complexity Matter
Municipalities that appear similar at first glance can differ significantly in terms of operational complexity.
Population size, infrastructure responsibilities, service delivery models, and organizational scale all influence the types of roles required within an organization.
A municipality operating transit systems, utilities, or complex infrastructure programs may require very different technical expertise than one providing a narrower range of services.
Comparator selection should therefore consider not only geography but also organizational size, scope, and complexity.
One Comparator List May Not Be Enough
Many municipalities rely on a single comparator list applied across all roles.
While administratively simple, this approach may not reflect the realities of modern labour markets.
Larger municipalities often benefit from segmented comparator strategies where different roles are benchmarked against different groups of organizations.
For example:
- Front-line roles may be compared primarily with neighbouring municipalities.
- Management roles may draw comparators from across a broader regional labour market.
- Executive roles may be benchmarked against larger municipalities across the province.
- Specialized technical roles may require comparators that reflect niche labour markets.
This approach better reflects where talent is actually sourced — and where it might be lost.
Avoiding the “Set It and Forget It” Trap
Comparator lists sometimes become static elements of compensation policy. Once established, they remain unchanged for many years.
But labour markets evolve.
Municipalities grow, service responsibilities change, and recruitment patterns shift. A comparator list that made sense ten years ago may not reflect the labour market realities of today.
For that reason, comparator lists should be reviewed periodically as part of broader compensation strategy discussions.
Key questions to consider include:
- Do these organizations still resemble us in size and service scope?
- Are we recruiting employees from these municipalities?
- Are we losing employees to them?
- Do they still represent the labour market we compete in?
If the answers are unclear, it may be time to revisit the comparator strategy.
Building a Compensation Comparator Strategy That Holds Up Over Time
Comparator selection should ultimately be a deliberate strategic exercise — not an administrative one.
The goal is not to assemble a list that is historically familiar or easy to access. The goal is to understand the labour markets in which the municipality competes for talent.
When comparator organizations are chosen thoughtfully, benchmarking becomes a valuable tool that supports both talent attraction and fiscal responsibility.
When they are chosen casually — or left unchanged out of convenience — benchmarking can produce misleading signals that gradually distort compensation decisions.
For municipal HR leaders, maintaining an effective comparator strategy is therefore more than a technical task.
It is an important part of ensuring that compensation policies support both workforce sustainability and responsible stewardship of public resources.
