New Year new job…


Everyone’s always a bit tight for cash in January – maybe this year even more than others – but what are the factors that govern what you actually get paid or are worth?  We were talking about this topic in the office yesterday so I thought I’d throw it up in a quick blog to perhaps start a conversation & in case it helps anyone who’s changing job in the New Year or thinking about doing so.

I’m not going to be able to help you negotiate a better salary and this isn’t supposed to be an exhaustive list or a lesson in regional economics – I’m just going to give you some pointers so that you’re more aware that there’s a bit of science to this & to say that sometimes it’s worth asking a few questions or chancing your arm.  My rules also apply more to start-ups or small businesses than they do to giant dinosaur companies – yawn – but if you’re reading my blog you probably aren’t that interested in working for one of them anyway.

1.       First up is what I call the scarcity factor – there’s a market rate for what you do in the geographical area where the job is based and it’s fairly easy to determine.  Some skillsets are like hen’s teeth right now & those people can therefore charge a premium – which is as annoying as hell for employers.  Like all commodities that are subject to market forces, these peaks & troughs do eventually go away as people retrain as something else or as more of the scarce resource moves to the area attracted by the higher pay scales.  Unsure what happens at that point to those that have been charging a premium but looking forward to finding out…  London & Dublin have traditionally paid more than the rest of the UK & Ireland – comes as a bit of a shock to people when they want to move somewhere else.

2.       How the recruitment happened is also a factor – if you’ve come to us through a recruitment agency or we’ve placed a newspaper ad, that’s likely to have cost us between £1,500 & £5k.  If you’ve come to us via word of mouth or in response to ads on our website, we’ll be more inclined to err on the generous side with you.  So – if you’re looking for a job do a bit of work & approach your chosen target companies before you sign up with a recruiter – you’d probably be surprised by the number of people that end up getting employed this way, especially by small companies who really resent paying recruiters.  It also shows initiative on your part.  You’d also be surprised by the number of people we already know that are sent to us by recruiters – sigh!

3.       What the rest of the “tribe” gets paid is a factor – for example, if the maximum day rate paid to anyone by the company is £300 – you’re unlikely to get £500 no matter how great you might be.  Also – if there’s a team already in place, paying you any more than them seriously upsets the apple cart.  Sensible employers realise that their people all talk to each other & in terms of remuneration packages – you might as well post them up on the wall.  Everyone knows what everyone else gets paid so it makes sense to have a fair & transparent system in place that you can stand over and then stick to it.  How much experience a person has does have some bearing on where on that team scale they start.  However, once they’ve started work future payrises will depend on a whole different set of factors.

4.       Other benefits – sometimes you might be lucky enough to be offered share options in return for a market rate or lower than market rate salary.  If you believe the company has a chance, then grab it with both hands & offset a miserly short term gain for who knows what in the longer term when the glorious exit comes.  If you don’t understand how share options work – then go & find out.

5.       Sometimes with a new employee companies try & offset some of the risk they’re incurring by linking part of the newbie’s overall package to a performance based bonus.  My take on this is that people who are up for the challenge know they are as good as their word, take the offer & will probably come up trumps.  Anyone that shies away from an offer like this because they want more “security” makes me believe they won’t deliver & I question if they should be in a small business anyway.

6.       Anyone that sells for a living gets commission on top of their basic salary.  Their basic will generally be much lower than their peers in other disciplines but they should earn more money than anyone else in the company including the directors.  Everyone else needs to either get over that or learn how to sell.  If you work in sales & your commission is low – you are a mug & should look for another job.

7.       Once you start work at a new company, how indispensable you become may in some way influence how much you earn over time.  No one is indispensable but some people are far more desirable to keep – this may have nothing to do with their job role – this topic is for another blog…

8.       Finally I’m afraid there’s an element of companies paying what they can get away with – if you’re being seriously considered for a £30k per year job & you currently earn £18k for whatever reason, expect them to offer you less money as a starting salary.  Linked to this you’re likely to get a better opening offer if you’re already working – expect to be lowballed if you’re out of work & have been for some time.

Couple of pieces of advice to finish.  Always negotiate (politely) when you’re offered a job.  People think you’re an idiot if you don’t at least try.  Women find this harder to do than men – that’s a fact of life – it isn’t me being sexist.  Second one – don’t lose out on a great job over a couple of grand.  Great jobs in great companies are few & far between & if you’re offered one – you sometimes need to be prepared to make some sacrifices because you spend a big slice of your life at work.

Interested in your comments as always.


One comment

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s