What the Job Pays

One of the more challenging job questions goes something like this:

“I found out about a job I think I might want.  The description (or posting) checks almost all my boxes.  But how do I find out what the job pays so I know whether (or not) to apply?”

The short answer is that you necessarily apply before you know the pay, and the rest of the story is that you may never find out.  However, I can tell you how this usually works or plays out, so that at least you know there is no secret code that everyone else has, but you don’t.

Notes on pay:

  • Base pay usually represents the value of a job to an employer.
  • A “range” means the range from the minimum value of a job to the maximum value of the same job (the most an employer will pay).
  • The midpoint is the value of a job when the person in the job is fully qualified and experienced in the job.
  • Job value is employer specific, though it is usually tied to two balancing factors—external competitiveness and internal equity.
  • The employer sets the midpoint (and the minimum and the maximum around it) according to an employer-specific formula, which is based on the employer’s human resources or talent strategy (including the frequency and basis for pay increases).

Usually, an employer wants to bring in new employees above the minimum and below the midpoint of the range.  Typically, an employer will not want to hire above the midpoint, for a lot of reasons.

If an employer does not have any of those things—ranges, midpoints, formulas, and so on—pay is set based on what the employer can afford, or according to the “going rate,” or via internal equity (what everyone else gets, plus or minus a factor for contravening forces, like fairness to a long-tenured staff member, or desperate need for a specific skill set).

Sometimes the highest paying jobs are those that require “combat pay,” which is based on working conditions that include long hours, emotional stress, crises to be managed, or job insecurity due to industry or company circumstances.

Base pay does not usually take into account any kind of discretionary or performance-based cash incentive arrangement, it does not include the value of health and welfare benefits and perquisites (like a paid parking space or club membership), and it does not include stock or other ownership provisions.  However, an employer may choose to establish a less competitive base pay policy because of other highly attractive features of its talent strategy.

So into this pay landscape you wander, interested in a job you heard about, but needing essential information:  What is that job worth to that particular organization?

Most employers don’t advertise pay ranges, either internally (to their employees) or externally (to the market).  The reason for this is simple:  internally, pay becomes a distraction, and externally, it usually isn’t necessary, unless the employer is forced to compete for talent based only on pay.    Employers typically would prefer that employees are focused on customers, clients, constituencies, and just about anything other than how much the work they or anyone else is doing should be worth.

If you think you want a certain job because the work sounds like a fit for your experience, skills, and ambitions, your next step should be to research the company and the other employees.  Who are these people and how might you help them get where they all want to go?  I think you should go so far as to seek important information about the person to whom a job reports and what their experience is, what they might teach you, and whether you would be the right fit for that person’s organization.

Next, you need to examine competitor companies, to see how your target company and job stack up in the industry, community, and your profession.  Look for articles, mentions, tweets, legal actions, sanctions, and gossip.  All important.

If you are still interested, and after all your research you can see how this job that fits you also fits into the overall company strategy, it’s time to apply, even though you still don’t know what the job pays.  If along the way, you have somehow connected with someone who works for the company, you should not ask that individual what the job pays.  From this point on, pretend (to yourself, not to anyone else) that the job pays exactly what you had in mind all along.

It is better if you apply without knowing what the job pays.  The message conveyed is that you like the sound of the work.  It also conveys that you have confidence in your judgment.

Only three things can happen next.

  1. You apply for the job and no one contacts you, because they don’t see the same “fit” that you do.  Remember, they know more about the company, job, and other applicants than you do.
  2. You apply for the job and someone contacts you to ask you screening questions, which may include asking your salary requirement.  It’s a legitimate question, not a trick question—you have to answer it.  You might begin with a dodge, like “it depends on the whole package,” but at the end of the day, the screener is looking for the ball park.  If you are at $200K and the job pays $85K, it’s the wrong ball park, and you both know it.  If you don’t care about the money and you would do this particular job for $100K, then say $100K, you might be in or close enough to the ball park.  If it’s $75K, say $75K; they aren’t going to give you less than the job is worth to them, with you as the incumbent.
  3. You apply for the job and are invited to interview.  You are offered the job, and a   compensation and benefits package is offered to you, which you can accept, decline, or negotiate.  Or you are not offered the job, and at that stage it’s unlikely that it had anything to do with money.

If you are asked for salary requirement information during the application process (on the online application, for example) answer truthfully.  And, if you are asked for your current salary, you do have to answer that question truthfully, and it is a different question.  What you are currently earning and what you require of the applied-for job are two different things.

The best thing to remember about pay is that it is not an absolute.  Once you have met your future leadership and colleagues, they may decide that you are worth more than the last person in the job, or that they undershot the market.  Or, if you are wildly unqualified but impressed them, they may decide that they will take a chance on you but at less than they planned for the fully qualified but higher paid targeted talent.

The only real guidepost in all of this is to never do what you personally can’t afford to do.  I once had a headhunter try to talk me into taking a job with a company that wanted to pay 75% of the annual cash compensation as discretionary/incentive pay following the end of the fiscal year.  The remaining 25% to be paid out monthly would not have been enough base pay to cover my mortgage and other expenses.  It was a hell no for me, but for someone else, it might have been fine.

Many people work for health or retirement benefits, for needed access to a new career or training in a specialized field, or discounted education, or other, personal objectives.  Cash compensation is only one of many reasons to pursue a great job.


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