Rolebot’s Top 3S’s: Defining Compensation in Today’s Competitive Market
July 28, 2021
Coming up with compensation targets for new employees has always been a challenge, but it’s been especially challenging this year, now that geography is becoming irrelevant.
There are platforms that provide compensation data as a service, however, in our experience, it’s not always very accurate and can be misleading (i.e. missing important context). In providing some guidance, the last thing we want to do is lowball hard to find talent (and lose our chances of hiring them) and/or draw a hard line in the sand based on publicly available compensation data, that’s not always reflective of market conditions. The most accurate comps are based on several factors (eg. job title, specific function, skillset, experience, and market supply/demand conditions), and the only way to define what those are at any given time is to Measure the Market.
So, how do we go about Measuring the Market?
Ask Ask Ask
Suggest during the recruitment process, ask every candidate what their target comp expectations are for their next role. After asking a handful of candidate prospects what they are looking to make in their next opportunity, you will have a very good indication of what the market rate is bearing for that role in real time, and where the company should be positioned to be competitive.
Interview, Compare & Contrast
Suggest as the team is conducting interviews with prospective candidates, start to compare & contrast experience in relation to the target comp ranges candidates have provided; This method will give the most accurate real-time data there is in figuring out the value the company will receive at a particular price point; Once determined, if it’s acceptable continue moving forward, or make adjustments to the hiring requirements — ie re-aligning experience levels to maximize ROI.
Compensation isn’t always about Money
Suggest talking to candidates that you’re interested in hiring and asking what is more important — eg. base salary, commissions, equity/stock, bonuses, PTO, leadership, remote work, etc…All of these factors contribute to a Total Comp package which should help balance some of the more expensive and unrealistic target comps that will undoubtedly arise in today’s market.