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Jan 8, 2015 12:00:00 AM · by Healthcare IS Team

The Truth About Targeted Salaries

Most of the companies we work with have a “salary range” for the position they’re trying to fill. The question is, where do these numbers come from?

Some companies will look online and find a salary survey for the specific position. Others will come up with a range based on what the previous employee or others in the position are getting paid. Others still have a range that comes from a corporate HR team.

Regardless of where this range comes from, the bottom line is whether or not it’s a number that will be attractive to potential candidates. There’s a big difference between what a company may have to pay someone to retain them and what they may have to pay someone to leave their current position and join their firm.

Surveys

In regard to salary surveys, there are many inconsistencies here. In my experience, it’s tough to justify the accuracy of these surveys due to the differences in where and how they’re obtained. There’s no way to determine the caliber of the individuals surveyed. Furthermore, a salary survey looks at what people in a position are currently making — not what they would need to make in order to make a change.

Previous Salaries

As far as basing a salary range on what the previous person in the position was making, this can be a big mistake. Oftentimes there’s a performance-related issue resulting in the person leaving, so why would a company think they can find someone better and pay them the same? Typically, after a few years, people become complacent with their jobs as well as their salary. They like their job OK and the money pays the bills, so they stay. But when looking for top performers to replace these individuals, sufficient money to pay the bills is simply not enough to attract people who will be successful and excel in their careers.

Human Resources

A lot of larger companies have a corporate HR group that determines salary ranges for all positions in all of the company’s locations. Again, the problem here is that they are often ranges for current employees — not ranges that will attract new talent. Another issue here is that a salary range in one geographical area may be more attractive than that same salary range in another area. Cost of living, desirability of location, and availability of potential candidates in an area should certainly be taken in to consideration when determining a salary.

I’m not saying that a specific position within a company shouldn’t have a targeted salary range. However, there should be some flexibility here to ensure that the company can attract the type of candidate they’re looking for. A company should determine the caliber of candidate they’re looking for and then decide what they’re willing to pay to land them.

You may also like: Are you a B company looking for an A player?

General, Hiring, Healthcare IS Team

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