Hiring in a new location usually starts with a deceptively simple question: what will it actually cost?
Truthfully, that question gets complicated fast.
You likely compare a few possible markets or try to build a reliable forecast for a specific city. One looks cheaper on salary. Another has stronger talent availability.
But Finance wants to know what each option will actually cost.
That’s where salary comparisons stop being enough.
To forecast hiring costs as accurately as possible, you need:
This guide shows you how as we dig into:
Start by estimating the expected cost per hire to forecast hiring costs in a new market accurately, then multiply that by the number of people you plan to hire.
Your cost per hire should include:
Keep in mind, equity can need particular attention here.
Many countries have tax-efficient schemes or structures for employee equity, such as EMI in the UK. So you’ll need to understand which approach makes sense locally, as this can materially affect both company and employee costs.
From there, calculate your basic forecast this way:
Expected cost per hire × planned headcount = estimated hiring cost
Pro tip: Use reliable hiring trends to factor in potential changes to your hiring costs.
If demand for talent is rising quickly as a location develops into a technology hub, for example, your current salary benchmarks may understate what you’ll need to pay over the next few years.
Calculating the total cost of employment by country is less about finding one salary number and more about building a realistic view of the full costs in a new location.
The steps below take you from defining the roles you expect to hire through to benchmarking local pay to turning the data into a budget recommendation for Finance or leadership:
Map out exactly who you expect to hire, at what level, where, and when.
You’ll use these details to benchmark the right salaries, estimate employer costs, and calculate the total cost of your planned hires.
For each phase of your expansion into the new market, specify:
Here, it’s useful to model headcount in phases rather than as one end-state number.
You might, for example, start with a small technical team in Spain, then build that out into a much larger local office over the next few years.
Say, 5 Senior Software Engineers + 2 Engineering Managers initially. Then 12 Software Engineers + 4 Engineering Managers, with additional local hires across functions such as People, Sales, or Operations.
Forecasting each stage separately gives you a clearer view of not just the cost of the first hires, but how your total employment costs will change as the local team scales.
Next, understand what your selected roles actually cost in the local market today.
You’ll want to use:
To this end, go to Explore the Market on the left-hand navigation bar in Ravio, then select Compensation Benchmarks to see real-time European tech benchmarks.
From here, filter by the following to find benchmarks that reflect the roles, location, and type of companies you’re hiring against.
Then, set the target percentile based on your compensation philosophy, so the benchmark reflects how competitively you intend to pay. For example, at the market median or above it.
And if you’re comparing costs across markets, use the coin icon in the top-right corner to view the benchmarks in either your company currency or the local currency of the market you’re hiring in.
Once you have the salary benchmark, calculate the total cost per hire – not just salary, but the wider employment costs the business will pay.
Review the wider employment costs that apply in your target hiring market, including:
Using official sources matters here because these costs vary by country and can materially change the total cost of a hire.
Pro tip: Add your target hiring location, role, level, and seniority into Playroll's free hiring costs tool to calculate your salary and total costs to hire. The tool combines total employment costs with salary benchmarks with Ravio to give you a reliable estimate for free.
Get your total cost of hire here.
Current salary benchmarks tell you what talent costs today.
Pairing them further with insights into how quickly new talent is entering your target market helps you gauge demand and how competitive hiring may become.
For instance, once seen as cheap outsourcing markets, talent in Eastern European countries is becoming increasingly expensive and will continue to do so, per our upcoming Compensation Trends 2027 report data.
Keeping a pulse on hiring trends also helps you sense-check whether the costs you’re forecasting today are likely to remain realistic over time.
So in this step, select Live Market Insights from within Explore the Market this time.
Set your location filter to the new country you’re hiring in, such as the UK.
Then compare or segment the market further by Job function, Industry, Funding stage, or Headcount to make the view more relevant to the companies and talent you’ll be competing with.
This’ll show you the Hiring rate metric, which gives you a 12-month view of the rate at which new talent is joining the market – helping you assess the level of hiring activity in that location.
Finally, to build your budget case for Finance or leadership, combine the total compensation for each role with wider employment costs, including employer taxes, statutory benefits, and any other costs you identified earlier.
Download the benchmarks from the top right corner of your dashboard, and add them to your hiring-cost modelling spreadsheet.
Alternatively, share a benchmark link directly from Ravio using the Share icon at the end of the benchmark row:
This makes it easier for you to align with hiring managers, recruiters, and other stakeholders on the pay data behind your recommendation for a specific role and level.
Now, in your final recommendation, make the cost difference between the markets you’re considering easy to understand.
For example:
Hiring the same team of five P3 Software Engineers would cost X in London, Y in Berlin, and Z in Barcelona. The difference is mainly driven by [salary levels/employer costs/other factors], so we recommend a hiring budget of [amount] for [preferred market/planned headcount].
This gives Finance and leadership both the number and the market evidence behind it.
Note: While you can always run these calculations manually in your forecasting spreadsheet, Ravio’s MCP also lets you connect your compensation data to your LLM and ask it to run analyses like this for you.
For example, ask the MCP to calculate the cost of hiring three P3 Software Engineers and one Engineering Manager in Berlin vs London using live compensation benchmarks.
P.S. Already a Ravio user and want access to the Ravio MCP? Contact your Customer Success Manager.
The market with the lowest salaries is not automatically the best place to hire.
A lower salary benchmark can be offset by higher employer costs, a smaller relevant talent pool, or the need to pay further above market to attract the people you need.
When comparing locations, look at:
Your hiring-cost forecast should inform your expansion decision, alongside the wider talent and business case – not make that decision on its own.
A good forecast gives you more than a budget estimate.
It gives you a clearer view of how hiring costs compare across markets, what’s driving those differences, and how confident you can be in the data behind your recommendation.
From there, the decision comes down to how those costs sit alongside talent availability, your compensation approach, and the wider business case for expansion.
Ravio can help you keep the compensation side of that decision grounded in real-time benchmarks and hiring trends across the new locations you’re considering.
For hiring in new locations, use reliable, up-to-date benchmarks from your target hiring market to give you a stronger, data-backed basis for budgeting than unreliable free salary data or geographic differentials from another location. Tools like Ravio give you local compensation benchmarks for forecasting hiring costs, which you can filter by role, level, location, company type, and target percentile to compare against the most relevant slice of the market.
Forecast far enough ahead to cover the phases of your hiring plan, rather than modelling only your first hires. Build separate forecasts for each planned stage of growth, then revisit them as salary levels, hiring demand, headcount plans, and employment costs change.
Build separate scenarios by changing the inputs that materially affect cost: headcount, roles, levels, location, and target market percentile. Calculate the total employment cost for each case, then compare the outputs side by side to understand how different hiring plans change the required budget.
Start with the market percentile your compensation philosophy targets, then benchmark each planned role and level against that position. Add employer taxes, statutory benefits, and other employment costs to calculate the total budget required to hire consistently with your existing pay approach.
Compare the full employment cost per hire, not salary alone. Add employer taxes, social contributions, pensions, statutory benefits, variable pay, and other required costs to each market’s salary benchmark. A lower salary market can still cost more overall once these additional expenses are included.
Match roles by job scope and level, not title alone. Use the same job family, seniority, responsibilities, and target percentile across each market comparison. The best compensation benchmarking tools often support this. For example, Ravio maps your job architecture into a consistent job framework, making it easy to compare equivalent roles across locations without relying on job titles alone or manually mapping roles yourself.
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