An acquaintance recently turned down two jobs because she felt that the starting salaries which were offered by the two different employers were much too low. Perhaps they were. However, she based her decisions on information she picked up from a free online salary survey. I was horrified when I found out!
Basing important career decisions only on online salary survey data can be a big mistake. Even in the hands of compensation experts, this data can be difficult to use. It is only as reliable as the age, data collection process, and analysis used in compiling it.
However, people seem to accept this salary data at face value, telling them what they should be paid. That reaction always makes me cringe because comparing salaries is a very complicated task.
Rather than an apples-to-apples comparison the job seeker expects, the salary survey may be providing a comparison among apples, oranges, bananas, watermelons, raspberries, footballs, and concrete blocks.
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What Is Included in a Salary?
The amount of money in your paycheck is only a part of your total compensation – your actual cost to the employer. Other costs that you don’t see in your paycheck include:
- The associated benefits (health insurance, life insurance, etc).
- The number of paid days off (vacation, personal days, sick days, etc.).
- Bonuses and commissions (usually sales-related jobs).
- Other extras (training, education, travel, free food in the cafeteria, parking, transportation, etc.).
In addition, some jobs give the employee eligibility to earn “over-time” (addition to regular hours, a.k.a. “non-exempt”) . In other jobs, over-time pay is not an option because the employee is paid for doing the job, regardless of the amount of time the employee takes to complete it (a.k.a. “exempt”).
If the salary survey data doesn’t specify how those variables were included or excluded, you have limited knowledge of the real compensation.
How Salary Surveys Work
Doing a valid salary survey is a very complex task!
In my past, I worked for a consulting company which did salary surveys for the banking and financial services industry. All of the top banks participated and thousands of smaller banks did, too. Although the data was collected and analyzed using computers, we spent weeks doing painstaking comparisons of the matches that were done – how many years of experience did this person have in this job? Did this person really get paid so far below the minimum of the range for that job or were they slotted into the wrong job?
We spent hundreds of hours trying to ensure that the data provided by Bank A for “mortgage loan officer I” was a good match for Bank B’s “mortgage loan officer I.” And for Bank C, D, E, etc. as well. Ensuring apples-to-apples comparisons was NOT a simple task, even with computers and databases and compensation experts!
And we very seldom compared the salaries of the top national/international banks with the starting salaries of the small local banks on Main Street in your home town (unless you live in NYC or other very large financial hub location). Larger employers would typically pay more than smaller employers, particularly in a competitive industry.
Negotiating a Starting Salary
So, what can you do when you are negotiating the starting salary of a new job?
- Use the data from salary survey sites as a possibly-trustworthy data point. It may or may not be the “right” salary for you and for this new employer and job in this location.
- Get data from more than one salary survey site.
- Try to find out how the employer pays from other sources.
- Consider other ways to increase your “total compensation package” understanding that the employer may or may not be willing or able to do any/all of them -
- Timing of your first raise
- Extra vacation or paid personal days
- Bonus for meeting a goal
- Education (professional training or help getting your degree or MBA)
- Parking or help paying for your transportation to/from work
Download Job-Hunt’s “FREE 15-Minute Guide to Winning Negotiation Strategies for Your New Job” for excellent advice from Job-Hunt’s Finance Industry Job Search Expert, Barbara Safani.
Bottom Line:
Use the salary survey sites as a “data point” but not as THE answer to what your starting salary should be.
For More Information:
- Show Me the MONEY, by Veterans’ Job Search Expert Patra Frame
- The Starting Salary Question, by Working with Recruiters Expert Jeff Lipschultz
- Winning Negotiation Strategies for Your New Job, by Finance Industry Job Search Expert Barbara Safani
About the author…
Online job search expert Susan P. Joyce has been observing the online job search world and teaching online job search skills since 1995. Susan is a two-time layoff “graduate” who has worked in human resources at Harvard University and in a compensation consulting firm. In 1998, her company, NETability, Inc. purchased Job-Hunt.org, and Susan has been editor and publisher of Job-Hunt since then. Follow Susan on Twitter at @jobhuntorg.
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