“What’s your salary expectation?”
When asked, most candidates and employees will typically quote the higher end of the salary range as they expect employers to negotiate it downwards or at least until their lowest acceptable threshold. However, if the number that you’ve given is arbitrary, your employer can easily dismiss your request and offer you the lowest possible salary rate.
Of the three key factors that have an impact on your salary – skillset, job title and experience – which of these has a higher weightage?
Is salary range based on experience or age?
Salaries have historically been calculated by your tenure, in other words, your age. The older you are, the more likely you’ll receive higher compensation. This is because employers assume you would have honed your skills and knowledge over the years doing the same job, and hence typically reward you with a higher salary in exchange for them.
However, this is no longer the case today. Instead, companies are looking for relevant work experience that you’ve accumulated in your past few jobs, and career tenure has a lower weightage during salary calculation. Why is that so?
The way we performed our tasks five years ago is completely different from how we do it now. Today, we have new digital solutions such as chatbots and automated processes that can perform administrative tasks much faster with greater accuracy.
Hence, tenure is now merely an indication of your foundation knowledge to prove that you know how to do the job. Anything beyond basic knowledge will require you to roll up your sleeves and be involved in driving new ideas, processes or projects.
Some mature workers who have accumulated years of experience in their jobs may actually see their salary decrease when they switch careers. This is only because they could lack the foundational knowledge to perform the new role, which typically comes with new skill requirements. However, employers may still take into account their transferable skills and relevant experience in their salary calculation.
Does your job title matter?
Your job title plays an important role in informing the hirer what you did in your previous company, what your role involved, and your work experience.
To a small extent, your salary is determined by your job title. Most companies, especially global MNCs, use a job grading structure that attaches a “tiered-salary benchmark” to different hierarchical levels. A manager would earn an income that fits within a predetermined range, and a director will be remunerated based on a different set of salary ranges, typically at much higher levels.
The HR team is largely responsible for developing these benchmarks. HR professionals perform extensive research annually with global HR agencies like Randstad to review their salary benchmarks. During this salary revision period, your HR team will factor in the talent supply and demand, inflation, pension plans as well as employee benefits.
There is value in your job title because it gives an insight into your management competencies and specialisations. Are you able to manage a team of five or 30 people? Do you only have experience managing local employees or do you have a regional or global remit? Are you a specialist or generalist?
For example, a finance manager who manages a larger team of 30 with a regional remit is more likely to be remunerated at the higher end of the salary range, as compared to someone who is managing five employees with a local remit. A financial planning and analysis specialist may be paid a more competitive salary as he or she has a very specific skillset that is highly valued and sought after.
Hence, job applicants are advised to be as specific as they can in their CVs and job interviews, with numerical data, statistics, or percentages to demonstrate their achievements and career growth. After all, numbers remain one of the world’s most easily understood languages.
Skills hold the highest weightage
The skills required for a job can have an impact on your salary. There is an increasing emphasis on skills as they do not just indicate whether you can perform the job, but how well you do it and whether you can push boundaries to create new opportunities for your employer.
Employees with a higher level of skills are more likely to draw a higher pay rate. People with in-demand skills are highly sought-after by employers because the organisation may be sorely lacking in certain key competencies and need someone to fill that gap. Highly skilled employees are valuable to any organisation as they can create new opportunities and drive growth for the business.
For instance, in supply chain, many know the basics of supply chain management – monitoring inventory levels and managing purchase orders based on client needs. However, very few have the skills to use new technology and data to predict changes before they happen, which can help companies improve their customers’ experience and save costs. This requires advanced data collection and analytics skills to create a formula that can accurately predict customer demands and market supply ahead of time.
This is perhaps why blockchain technologists are in such high demand in the supply chain industry, and why companies are willing to enter a price war to secure such talent.
Another example is the marketing discipline. Many marketers are already very familiar with using traditional marketing methods such as newsletters and TV advertisements to attract and engage customers. However, as social media takes precedence over traditional modes of communication, marketers are increasingly expected to demonstrate mastery in rolling out more effective campaigns on these new channels.
Future marketers are responsible for driving data-led innovation, by using technology and emerging trends to enhance the end-to-end customer journey. Marketers are not only increasingly looked upon as sales enablers, but also as strategic business partners and drivers of change. As opposed to generalist marketers, good digital marketing specialists are extremely difficult to find.
While this provides you with a guideline of how you can go about calculating your potential salary, this list is not exhaustive, and every company places a different weightage on each of these factors. It is still important to do some research by reaching out to other professionals in the industry or career advisors for advice on what is deemed a fair or competitive compensation package.
One of the ways you can gauge your salary is by using various data-driven online tools, such as the salary comparison tool by the Ministry of Manpower, designed from the official salary data in Singapore. Other such tools include the Randstad Salary Calculator, which leverages their user data to allow you to compare your salary with market salary rates based on your skills and work experience.
This article is contributed by Randstad Singapore.