What Should I Be Paid?
Have you ever heard anyone say, "I think I'd like the lowest paid job." Well, neither has any of the search engines. There aren’t many people trying to earn less in the world and that is why one of the most frequently searched sets of words is “highest paying job”. The good news is that the second highest set of search words is "what is average pay for my job?" This means that those people are looking for what the going rate is. They're looking to validate “fairness” in what they are being paid. These aren’t just common search phrases. Ask anyone who owns a business or makes decisions about people’s pay if these are frequent conversations. The answer will be yes.
Since our livelihoods, our purchasing power, and the ability to do things we want to do are based on our income, it's probably good to know what factors go into an employer's decision-making process on how much you get paid. When we separate the emotional and psychological connection to pay, a wage is an amount that someone is willing to pay for your time and skills. Nothing more, nothing less. These some of the are factors that go into determining your wage
The Law: Minimum Wage and Living Wage
These two concepts try to accomplish the same thing. Set the minimum legal wage a business can pay an employee. This started in 1938 with Fair Labor Standards Act. The act was a result of protests of the treatment of laborers due to greed, classism (every other ism), and exploitation. The number is determined by Inflation and Consumer Index. To put it simply, the law will raise the minimum wage when you can buy less with a dollar because you need more of them to buy the same thing. It’s a minimum standard, every country is different (and some don’t have it).
The Average: Base Pay
This is a number that a company decides is the value of your time for the job you are asked to do. This number is based on historical information in payroll systems.
The Results: Performance Pay
This is pay changes based on how well or if you accomplish goals or objectives.
The Market: Demand Wage
This approach says that you will be paid more when the skills you have are in demand and paid less when the skills are in less demand. Or when the skills you have are in small supply and there is a lot of demand. If you work in customer service and there are over 100,000 open postings for jobs, your skills are in demand and there isn’t enough supply. Your earning potential raises. If you are an executive and there are 10 job posts for executive-level positions, and 100,000 applicants, you're not likely to earn as high a value on your skills because there is a vast supply of people who meet the criteria for the position.
The Approach: Equal Pay
Equal pay is a social conversation, it's not the law. The social conversation is saying pay should be reflective of skills and ability to do the work. That doesn’t mean blindly distributing pay in equal amounts to everyone. That means apply better pay practices so that you aren’t consciously or unconsciously causing differences in pay based on anything other than work.
The above list is what most employers consider when determining how much you get paid. As you can see there are a lot of factors and it's not easy. What you can do as a Talent is know ahead of time what is reasonable for your skills and your time and prepare yourself to negotiate when the job offer comes. Knowing these factors will make you well equipped with a reasonable number that makes you feel valued and the employer move the work forward.