Tuesday, May 26, 2009

Constructing the Salary Offer

I realize there is not a lot of hiring going on right now, and candidates are likely settling for less than than they would. But, I imagine job offers will always be lower than many candidates hoped for. Seasoned executive recruiter Mark Warren understands this well. In a blog post from earlier this month, he helps recruiters prepare candidates to be realistic about an employer's offer.

Mark explains that candidate's need to know the thought process employers go through when making on an offer. He explains the employer's evaluation is processed using the following criteria in order of importance.
  • (40%) Internal restrictions such as budget requirements, department parity issues, established pay bands
  • (30%) The market value of the candidate as perceived by the employer, not the candidate
  • (20%) The candidate's current compensation and compensation history
  • (10%) The candidate's compensation needs
Nice! I think he's pretty spot on, but I'm not sure how many employers know they are going through this process. I don't think there is much salary planning at all in many start ups. I think this break down helps employers understand what they are doing. Perhaps this process and percentages can be used proactively to establish salary ranges and job offers? To plan (gasp).

Certainly, this reminds me to add salary strategy to start up's list of areas where HR can help. It's a lot harder to fix these issues than it is to do some prior planning. Do you understand each position, the market range for that position in your area (industry and geography) - just roughly, that is (there is a lot of subjectivity here). More importantly, do you know if you pay above or below market? Is this part of your strategy? Do salary increases fit into the plan? Does salary mix with equity or other incentives offered?

23 comments:

  1. We have a pretty well developed approach to this with salary banding, annual external and internal benchmarking and a more structured approach to rises.

    This still doesn't get around the question of how you react when one of your top talent is offered by a competitor and the offer is outside of your salary band, which you know is competitive in the market place.

    Do you stand firm, or do you accept that structures are there to be broken?

    ReplyDelete
  2. Interesting HRD ... a nice real world issue. I would say rules are made to be broken :-). You should know very clearly exactly why they warrant the exception, why they are different, and how they contribute more - you should know this so well that you could explain to other employees.

    ReplyDelete
  3. This is such a great resource that you are providing and you give it away for free. I love seeing blog that understand the value of providing a quality resource for free. آرین سازه

    ReplyDelete
  4. Needless to say, the construction industry is badly broken and needs fixing. How does the industry rise up and meet the challenges of customer demand for higher quality, improved profitability, and the shortage of skilled workers? Lean thinking is a new way to manage construction. آرین سازه

    ReplyDelete
  5. The term domestic auto repair is used, in the United States, in reference to the industry that has come up offering specialized repair services for 'domestic' car brands. The 'domestic' car brands in question are those natively made in the United States, as opposed to the foreign (imported) car brands. PTFE Hose

    ReplyDelete
  6. Many investors are turned off by real estate because they do not have the time or inclination to become landlords and property managers, both of which are in fact, a career in themselves. If the investor is a rehabber or wholesaler, real estate becomes more of a business rather than an investment. loan companies in las vegas

    ReplyDelete
  7. General contractor is associated with high amount of risk for money and lives. A slight negligence or bad fortune on part of the worker or owner may prove too costly. It may lead to a huge financial loss. A comprehensive construction insurance policy covers all the expenses that may occur due to property damage or personal injuries at the construction site.

    ReplyDelete
  8. There are standard construction principals as far as timber sizes and fixings. However pergola offer great outdoor areas that are an extension of the living areas of the home. When designing your deck the first section to be considered is the purpose. What do I need or want from the deck?

    ReplyDelete
  9. A backyard roof repair is part of your home. In fact, in many homes, deck is a place that many of the family members spend most of their time in the summer months. It's a place to lie in the sun, read a good book, cookout, dine and entertain friends and relatives.

    ReplyDelete
  10. Knowing common Roofing West Palm Beach terminology will enable you as a homeowner to make an informed decision about roofing materials that are good matches for your home's style and the region in which you live. It will also help you understand the contract with your roofing professional and the project updates.

    ReplyDelete
  11. กำจัดปลวกเชียงใหม่ ( chiangmai termite control ) เป็นบริษัทกำจัดปลวกเชียงใหม่ ฉีดปลวกเชียงใหม่ราคาถูก เน้นความคุ้มค่า เพื่อลดค่าใช้จ่ายของลูกค้า กําจัดปลวกเชียงใหม่ราคา บริษัทกําจัดปลวกเชียงใหม่ราคา ฉีดปลวกเชียงใหม่ราคา กําจัดปลวกเชียงใหม่ราคา เริ่มต้นเพียง 3,500 บาท โปรโมชั่นสำหรับลูกค้าที่ฉีดเพื่อป้องกันปลวกประจำปี ตามขนาดพื้นที่ของบ้าน . ฉีดปลวกเชียงใหม่ทาวน์เฮ้าส์ราคา

    ReplyDelete
  12. Finding a รับทาสีอาคาร , specially the one who can understand and fulfill your requirements is one of the difficult tasks you perform when it comes to the renovation of your house. You search, you bargain and then you select.

    ReplyDelete
  13. Needless to say, the construction industry is badly broken and needs fixing. How does the industry rise up and meet the challenges of customer demand for higher quality, improved profitability, and the shortage of skilled workers? Lean thinking is a new way to manage construction. الوعبة

    ReplyDelete
  14. aa den stora boken… [...]p Have you noticed any performance problems with the wordpress platform? I ha oj[...]… buy steroids USA

    ReplyDelete
  15. Marketing has become harder in the roof repair baton rouge sector in recent years, due mainly to the economic down turn. This is an article looking at what construction companies can do to survive and what marketing options are open.

    ReplyDelete
  16. The construction industry in Arizona is extremely profitable and active. A number of large scale industrial houses are taking up newer initiatives in developing construction in Arizona. Towing Company Lake Charles LA

    ReplyDelete
  17. Beware of plumbing service advertisements as most are not legitimate licensed plumbers. Fake companies and lead generators dominate sponsored ads and on-line contractor directories. It has gotten so bad that Amazon is now advertising plumbing services! plumbers in baton rouge

    ReplyDelete
  18. Successful roofing projects have one thing in common: Decisions from design to maintenance are based on sound information. Here are ten tips for getting the knowledge you need to plan effectively. monroe roof replacement

    ReplyDelete
  19. Your choice of roofing materials is critical to how long the house will last, how much energy you can save etc. Find out about the different roofing materials available so that you can make an informed choice and get some maintenance tips. roofers in west monroe la

    ReplyDelete
  20. Successful roofing projects have one thing in common: Decisions from design to maintenance are based on sound information. Here are ten tips for getting the knowledge you need to plan effectively. Roofing contractors Shreveport, la

    ReplyDelete
  21. If you live in an area of the country, such as Massachusetts, with harsh winters you might be wondering why anyone would consider roof replacement in the winter time. Well, it's not as uncommon as you might think. Many roofing contractors offer their services year round even in cold and snowy regions such as Massachusetts, which is where I'm from. Roofing Massachusetts homes during the winter is no different for a roofing contractor than doing it any other time of the year, with a few exception, and some roofing contractors and there crews even say that they prefer it. First let's go over what makes roofing more difficult this time of year and the arguments against having a new roof installed right now. Roofing Shreveport

    ReplyDelete
  22. So you've done your research about benefits of installing metal roof as an energy efficient retrofit of choice. You now know all about curb appeal and beauty that a metal roof can give to your home. You have learned about tremendous energy savings, great looks, and a long lasting and durable protection that you can get for your home by re-roofing with metal. All this new hype about benefits of metal for re-roofing projects has really spiked up your interest and you are starting to consider installing a new metal roof to protect your castle, your home that is. Learn more about pros and cons of metal roofing for residential homes by reading the story that could be yours. plumbers in glendale ca

    ReplyDelete
  23. What is metal sheet roofing? Metal sheet roofing can be defined as a roofing structure that's built with large pieces or sheets of a particular type of metal. These roofs are generally made up of copper, steel, and aluminum sheets and are known for providing a high level of protection for homes and buildings from extreme weather conditions. plumber glendale

    ReplyDelete