As an Executive Recruiter, the topic of compensation and salaries comes up daily. I try to get my candidates focused on OPPORTUNITY as opposed to MONEY. That stated, anyone that tells you money does not matter…does not have any!
So how do you determine your “market value”, the compensation package companies will pay you based on your education and experience? Here are the primary factors that determine what an executive gets paid.
Professional Experience – You need to be a close fit for the job if you expect to get interviewed. If you are going to switch careers, do it internally at your present company. As an Executive Recruiter, I put square pegs in square holes. And companies hire for what they need – not for on the job training. And for the love of God, never say, “I can do anything!” Mostly you get paid based on your skill set and years of experience (seniority). The one exception is technology, where certain high demand skill sets (CRM, Oracle, Teradata) inflate salaries. I once placed an Engineer that was $70,000 for $95,000 because he had a unique technical skill set. Typically, though you are going to get a 10% bump in compensation between jobs. Maybe 20% tops. Anyone that tells me they want 50% more than they are currently making, gets dropped like a hot rock.
Education – Either you have a four year college degree or you don’t. If you don’t, leave it off the resume. I regularly drop candidates that try to spin the truth. No one cares that you were 4 units away from graduating. You have it…or you don’t. A four year degree is required for most executive level jobs, however a degree alone won’t get you a higher base salary. Just makes you more qualified. On another topic, completing your MBA does not guarantee you a raise. Had two of these recently. First, a candidate at $80,000 that though he could “easily get $100,000 because that’s what they pay MBAs” and “I know I’m at $200K, however with my high profile MBA you should be able to get me $300K”. Nope. Not going to happen.
Cost of Living and Taxes – Since mostly I recruit in Las Vegas, I constantly struggle with this one. If you are $300,000 in San Francisco, you would be lucky to get $200,000 in Las Vegas. Why? We don’t pay that 13.5% California state income tax, and the cost of housing is 1/3 that of the Bay Area. Try telling that to candidates. Regularly get San Francisco and Los Angeles candidates that say “cost of living does not matter.” You are wrong. Cost of living matters to companies in a big way. Be sure to use a cost of living salary calculator if you are changing geographies.
Employment – Companies want to hire gainfully employed executives. After that, they prefer someone that just left their last job. Get to six months of unemployment and you have real trouble. It’s like a house that sits on the market. Buyers start wondering why someone has not snapped it up. If you are unemployed, you better be realistic about compensation. I know a guy that was terminated from a $275,000 job. Told him I could do $225,000 and he responded, “Are you kidding, I can get $350,0000.” He was unemployed almost a year, took a $225,000 job (gosh, that number sounds familiar), terminated again and now work for $160,000. Be realistic about your compensation demands!
Economy and Market Conditions – This is a HUGE one. I remember going from 130 open jobs to 10 in two weeks during 2008. January 2016 started out the same way – hiring fell off a cliff. When the economy falls apart, you have 100 candidates for every job vacancy. In a strong job market, you can ask for more money because the company will have fewer candidates. And for the record, that 5% unemployment number the government is touting is complete cow turd. How about all the people that left the job market? How about the ones that were moved to part-time so their employers would not have to pay them benefits. How about all the ones on the government dole? The REAL unemployment rate is 15% to 20%.
