Are you worth more than what you are getting paid? Finding the answer to that question is a tough ask. Anthony McCormack gives some ideas as the best way to go about finding the answer and crucially, how to keep salary issues in perspective while doing so.
Are you in an active job search and want to know what salary to target?
Maybe you feel your salary has slipped behind and you are considering looking for another job that pays what you think you are worth?
Maybe you are looking for ammunition to take to your performance review with your current company. Maybe it’s just idle curiosity. Any which way, salary guides and more specifically the question: “Is my salary a fair market rate?” is always a subject that creates interest and potentially controversy too.
This blog will give a few pointers on how to source and review salary information and also encouragement to keep salary in perspective as one of many factors in a career health-check
Of course, unless a position is unique, in an online age of transparency and information flow, there will be a general market rate for a particular job in a given location. This is simple economics and market rates can be pushed up and down depending on supply and demand, demographics, the general economy and specific events.
A good parallel is petrol prices; they are all around and about the same according to market forces including competition. Sellers are unable to sell at a significantly higher price and would be silly to sell for much less because competitors would follow suit meaning everyone makes less.
Salaries are a little different, however, and can be described as ‘sticky’, as it’s pretty rare for employees to willingly take a pay cut. So what tends to happen is, given high demand and a relative skills shortage of a particular employee type, wages respond by going up relatively quickly in response. For example, the case of quantity surveyors in 2016 when the construction industry was returning to a boom time. This takes place because of the need to attract and retain the best talent.
Conversely, where demand is less and supply is generally available of a given employee type, current employee wages can remain static while new employee wages are reduced. For example, quantity surveyors in 2009 when the beginnings of the financial crisis emerged, followed by a global recession. In that case, if the difference between the current employees’ ‘high’ rate and the new ‘low’ market rate becomes too great, then the employer may make certain employees redundant to cut costs.
The general consensus of opinion from candidates that I have spoken to across my recruitment career, is to go where the salaries and rates are greatest, get the best deal that you can and look after ‘number one’.
But I tend to challenge that logic. The company or companies that pay the most often have to do so because they have nothing else to use as a carrot to attract employee ‘talent’. You don’t want to work for the worst ‘payer’ but I would argue that the company which pays a decent market rate, has a fantastic work environment, flexible work culture, comprehensive benefits package, excellent career prospects and good work-life balance is a relatively more attractive proposition than the employer who pays best…but that’s all they do.
So a word of warning when you see a salary figure that seems ‘too good to be true’, it probably is! Or at least you may shed blood, sweat and tears going about earning that salary.
That said, knowledge is power so when it comes to ensuring a good deal for yourself in respect to salary, the first step is sourcing current, reliable information from which to gain a benchmark. The twist is that this has to be industry specific, location specific, and account for your level of experience and qualifications in order to be meaningful.
It is a massive challenge for corporate agencies to get together their annual salary guides
Therefore, working out a typical range and average salary per job and location is a complicated equation and this is why it is a massive challenge for corporate agencies to get together their annual salary guides, (I’ll come on to that later). Even then, the published salary guide information will not, of course, take your individual knowledge talent or productivity into account.
If you are renowned as the best chief estimator in London, you are going to command the highest salary, and people will come looking for you to pay it! This is why it pays to build up your professional expertise during your career but also your professional reputation.
You will be able to subscribe and sign-up to numerous salary surveys and guides online. A google search will get you rolling. You may have to input your own salary and benefits information as a trade to get the results, but this is partly how these sites obtain their data. There will be paid guides too, some running into thousands of pounds, but these are aimed at corporate companies doing their own salary benchmarking. For individual employee purposes, there is really no need to pay for this information.
As I touched on before, corporate agencies typically have a salary guide which they issue annually and helps promote themselves as recruitment and industry experts. These should be a decent point of reference for clients and candidates alike. Hays PLC and Michael Page, for example, have salary guides that are typically much anticipated. As with any information, though, cross-check and apply your own common sense, the data may not be as empirically gathered or statistically valid as you may be led to believe!
While you can, and I think you should, reach out to organisations who have collated salary guide information available; I think you should also do your own research which will certainly be more current and realistically more accurate. For example, run searches on jobs in your current or target locations, irrespective of if you are job hunting or not. Analyse the data for typical range, average and anomalies and see what that tells you. Good staple job boards to use include Monster, Reed and Indeed and you likely know some more specific sources of job postings according to your industry niche.
Your network may be of use here as well. Brits are typically … well, British – and talking about salaries can be kind of taboo. If you are talking to a friend or a trusted contact, you could ask them what they are earning and trade for your own salary information. Or you can soften it by approaching it more as a: “…You work for XX company, do you know in what range they pay their XX employees roughly?”
I would say the less well you know the contact the less accurate the information is likely to be and that, in general, people are more inclined to exaggerate then underplay!
So hopefully you can use a few of these tools and techniques to get a fuller picture than individuals typically do when scrambling to prepare for a salary review or deciding whether to look for a new role.
However, I implore you to keep the salary issue in perspective. Of course, it is important but I have lost count of the amount of people who have told me they moved for more money and wish they hadn’t. I aim to only work with candidates who have other valid reasons to move.
Balance your salary when considering the ‘attractiveness’ of your job alongside things like location, industry, company, promotion prospects, challenge, interest and your career direction. Plus, even within the ‘financials’, while salary is the headline figure, it is important to consider the total package which may be designed to be a tax efficient way of paying you more money, than with a higher salary. Bear in mind things like: vehicle, car allowance, toll transponder, expenses, pension, health benefits, gym membership, childcare vouchers, cycle to work, vacation allowance and potentially a myriad of flexible benefits.
To monitor and measure salary for your job and location can become an obsession and is not the same as controlling it! My best advice is not to get too self-important when your market salary goes up and likewise not to get too self-deprecating when your market salary goes down. A bricklayer with the same skills would have likely gained a 50% pay rise from say £10PH to £15PH between 2010 and 2015. By the looks of the bricklaying robot who I keep seeing on LinkedIn, it may have gone back down again! The bricklayer in question hasn’t got any better or worse, it is just that supply and demand and technological factors have come into play.
It is much better to focus strategically and consistently on improving your individual market value via qualifications, skills and experience rather than merely tracking general market rates. Improve your value and you soon realise that pay rises and promotions will naturally follow. For example, if you are a site manager missing one of what I call ‘the triad’ (CSCS, SMSTS & 5-day first aid), getting the full set is likely a good first priority for maximising your salary and rate potential.
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