How do you determine a fair wage?
The digital space is saturated with articles discussing how to approach compensation requirement questions during interviews, which are helpful for setting up the best offers possible. However, there are few pieces written on how to determine a realistic, yet ideal personal salary range.
There are many factors to examine in developing informed responses to compensation needs, as well as resources, outside of the internet, to formulate them. We will evaluate multiple common scenarios that often overlap in methodology.
For the “job switcher”
First, it is important to analyze your current personal situation: Are you employed? Recently unemployed? In a longer transition period? Your employment status plays a large part in considering compensation.
Maybe you are happily employed, but hear about a great opportunity; maybe you have recently been laid off; or maybe you took some time to find the right thing after being unemployed for a while. Regardless of where you fall on this spectrum, you need to determine what you need to be making from a financial perspective, but also where compensation falls on your list of importance for a new position.
What are you earning currently, or what were you earning most recently? Believe it or not, there are job-seekers purely focused on their happiness in a new role. They are actually willing to take a pay cut for the right opportunity. However, it is more common to encounter job seekers who are looking for compensation increases. Of course everyone would love a huge increase in pay, but asking for a 50% bump is unrealistic.
What does the job search market and general economy look like right now? Is the industry market saturated with jobs or candidates, or is it neutral? If there appears to be more candidates than there are jobs, you may want to provide a slightly larger range of compensation, as there is more competition. If there appears to be more jobs than candidates, you may receive multiple offers, thus strengthening your case for a higher compensation.
What do other people in industry, with similar positions to yourself earn annually? Are you being over, under, or fairly paid for your skill sets compared to peers in your geographic region? It is important to understand this.
What does your target employer have to offer? Reviewing the benefits package, bonus pay, commute, upward mobility, and company economic health is important when evaluating a potential new employer. Any one, or combination of these factors may drive you to increase or decrease your salary expectations based on what you currently have, or have had in the past.
For the “career switcher”
Changing careers can be terrifying, especially once you have an established work history in a particular area. While it is crucial to consider all of the above points like your fellow “job switchers,” you also need to probe into a few other details.
Are you willing to take a pay cut, start over, and/or go back to school to pursue a new career? Naturally making a major career move is risky. For those who are brave enough to do so, it can be very rewarding. However, switching to something far outside the scope of your current role may require special certifications and/or schooling. Also, there is the possibility of starting in an entry-level position with entry-level pay, despite years of experience in another field.
For the “geographic switcher”
If you are relocating to a new city, state, country, etc. it is important to follow the same procedure as the “job switcher,” with some more pointed add-ons (I was the geographic switcher last year, moving from NYC to Rochester).
What is the compensation range for positions similar to yours in this new region? Personal experience indicates one of the largest dynamic components of your job is salary when moving to a different geographic area. In some cases, your pay may decrease or increase, depending on the cost of living.
What is the market like for your skill set / background / position in this new region? You may be relocating to an area with high demand, but a small candidate pool for your skill sets. In other cases, you may experience the opposite.
For the “first-timer”
(I could not come up with any clever “switcher” eponym for this one) Graduating from college is both an exciting, and scary event; it marks an introduction to the “adult world.” Recent graduates should first determine what an entry-level salary looks like in their respective fields, industries, and geographic locations.
What is most important to you in your first career experience? Of course we all want to graduate college and start our dream jobs paying six figures. However, this is not the reality for most people. What are you good at? What do you enjoy doing? Are you seeking upward mobility? Is organization size important to you? There are dozens of questions which pertain, but ultimately it comes down to what is most important to you personally.
For all seekers, switchers, and first-timers
How can you aggregate the answers to all these questions? A good place to start would be personal connections. Find those who work in industry / field / similar roles / the new geographic area — pick their brains on their first-hand experiences.
If you are looking for a broader scope from someone who covers the whole market, whether that be from a geographic, industry, field, or role perspective, recruiters are often a strong source. As specialists, recruiters examine the market from a higher-level vantage point, speaking daily with people from various companies and seniority levels.