5 Tips for Calculating an Appropriate Salary

5 Tips for Calculating an Appropriate Salary

It can be difficult to determine an appropriate salary for prospective employees and can be incredibly important if you want to secure top talent.

Whether you are looking to keep your most talented employees or bring in some fresh expertise, calculating the right salary can be an incredibly important part of making a business successful.

It can be easier when you're doing this within your own company, as you have a guideline as to what they're expecting. However, when you are recruiting, you usually have no idea what offers your competitors may be giving to the candidate you want.

So how do you know what is an appropriate salary?

Judge their experience

Measuring the level of experience an employee has is probably the most important factor in deciding their salary. Calculate how much it'd cost you to train someone else in your company up to their degree and this should help you determine what would be a suitable offer for them.

Ask them in the interview

It may seem obvious, but asking candidates what sort of salary they are expecting is a good way to gauge what sort of figure they are after. Of course, there's always room for negotiating but it helps you to avoid making an inappropriate offer to prospective employees.

Look at current employees

If you have current employees with similar levels of expertise, their salary can be a good benchmark to use. You don't want to be giving new employees substantially higher wages than those who already work for you unless they have significantly more experience, as it could cause tension.

Research other job postings

It may be that you are making a new hire to develop your company's services and you don't really have any employees that you can use as a rule of thumb. In this case, you might want to look at what other companies are offering candidates in similar roles. Websites like LinkedIn or other job sites can be a great way to see how much other professionals are worth.

Calculate other factors

A job offer isn't just about getting the right salary, many professionals are now looking for companies that reflect their own ethics, can offer a good work-life balance, or will allow them greater autonomy. Try and find out exactly what your candidate values during their interview and see how many of these you can offer them. Obviously, if salary is their main driver, this may not help much, but if they are looking for other benefits from their new role, you can weigh these up against your offer.

 

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