You just created a new position, but how much do you pay someone to do a job that does not exist? If you set the salary too low, you drive away qualified applicants. If the wages are too high, you sacrifice a chunk of your budget that could be put to better use. Instead of guessing at the best figure, try these steps to set the salary for a new position in your company.
Establish a starting salary range
How much do new hires typically make? How much do high-level or tenured employees earn? You can obtain this information from the human resources department or by talking with your peers.
For this example, you decide to hire a manager to cover all of your information technology needs. You find out that your firm’s salaries range from $21,000 for customer service to $90,000 for the director of sales.
Look at similar positions across the company
How much to people at equivalent levels earn? How much are you paying now for people to do the new person’s job?
Entry-level managers are earning between $38,000 and $52,000. Upper managers make between $65,000 and $90,000. The current help desk person makes about $30,000. New range: $38,000 to $65,000.
Find out what competitors pay
You can use salary surveys on PayScale and Glassdoor to determine the average wage for a position in your city and industry. Since job titles can be vague or misleading, focus on core functions.
You discover that local IT managers make $45,000 to $125,000, network administrators make $34,000 to $79,000, and help desk managers make $39,000 to $90,000. New range: $45,000 to $65,000.
Consider nonmonetary perks
For many applicants, the quality of life at work has a larger impact than the size of the paycheck. Do you offer fringe benefits such as time off, flexible work schedules, telecommuting options or opportunities for advancement?
With salary and benefits, you decide that you attract candidates in the $40,000 to $60,000 range.
Check your budget
Make sure that you have room in your budget for salary and benefits this year and going forward. You will need to consider projected wage growth, including cost-of-living raises, bonuses and promotional increases.
Reviewing all of the factors, you decide that $40,000 to $60,000 is a reasonable range for this new position. You expect to offer $40,000 to $47,000 for the new manager, depending on experience.
Creating a new position does not have to leave you stumped. With a little bit of research, you can offer salaries that entice good employees, even if the position is brand new.