Salary ranges - question!

[peoniesbloom]

Just curious really. DH has been approached by a headhunter about a new role, and is currently getting underway with the interview process.

DH is senior in his field. The company has given a salary range, and the gap between those numbers is 50k, which seems immense to me but is apparently quite standard! The headhunter has advised that DH asks for a number that is just under the middle of the given range.

It's not my business, and it's up to DH of course - but I was wondering why companies do this... and why, if there is a range, one wouldn't just go for the maximum figure at the start of negotiations?

Would love to hear people's views! Thanks

It depends on knowledge and experience. The top salary will be those who are at the top of their class, industry leading etc. Middle salaries will be for those who are experienced and have knowledge, but may require further investment (such as training). The lower end will be someone who has less knowledge and experience and will require much more investment.

Thanks @Complet . Interesting as DH is indeed 'industry leading' - what he does is quite niche, and while there are other candidates, the recruiter has implied that he is likely the strongest. He ticks all the boxes of what they're looking for - so I just wonder why it's been advised that he guns for the middle? Do companies often advertise a range, but not really expect to pay the top of it?

@peoniesbloom
A key differential with pay ranges is public vs private sector.

I can only advise re public sector which I suspect is not what your DH is.

If his job is so niche this may not help but companies like Hays do have benchmarking data. https://www.hays.co.uk/salary-guide
The Headhunter is likely to access this but will probably have confidential information regarding the salary the company is prepared to pay.

Often pay ranges have inbuilt headroom to allow for future pay rises.

Headhunter's job isn't to support your DH, it's to get commission from placing him. I suspect he's said middle range because he knows that is what will be most palatable to the company aka most likely to get him the commission. Everyone likes a bargain. If DH thinks he should pitch himself higher, that's his call to make!

If he’s qualified for the job he’d be mad to make an offer in the bottom half of the. He shouldn’t make an offer at all - let them show their cards.

Tell him to read Never Split The Difference - great book

Thanks everyone! Role isn't public sector. I'm just curious about it tbh and yes I quite agree with you @HuskyNew that the cleverest thing to do would be to wait to see what the company offers!

I don't see why it's even being talked about at this point, but it is. I can't see that 'candidate X would be after a salary of Y' should be part of the initial discussion - unless the recruiter knows that asking for the very top of the bracket is likely to be off-putting - in which case, why give a range? Just seems a bit bonkers.

It would be partly based on what he gets in his current role - if he is making a lot less than the top of the bracket, the company will expect to get him for more than he earns now, but less than the maximum.

The headhunter is going to say he’s the best and they will say the same to all other candidates. At the end of the day the recruiter will be after the win with him. Your husband needs to state a salary that he is comfortable with.

I think the bottom of salary range should be minimum of 80% of the top.

So range of 200K - 250K would be reasonable but 50K - 100K would not.

Where is his current salary in that range

how does the total package compare to what he’s on now (car, pension, death in service, healthcare, parking, bonus, LTIP)

If you appoint someone at the top salary band you remove any opportunity for future pay rises while in that same role. It’s highly unusual to recruit at top of band for this reason, as it only stores up future problems. It’s far more realistic to hope for about a third to half of the way up a band IMHO. The employer will be hoping for bottom! The idea of the band is to show what you “could” earn in role in the future.

Yes I was going to ask what the percentages were.

Wow thanks for all the insight. Bracket is 100-150k and headhunter has advised 120k - which is higher than DH is currently on.

It's a better package overall too, so obviously he would be happy with this! But I was just wondering about the logic if the top of the bracket is 150k...

My experience is that headhunters will tailor the salary to the individual.

Recently I was speaking to a former colleague (20 years younger than me) who told him a recruitment consultant was telling him about a job paying £70K. Same consultant told me that this job was paying £90K.

@GeorgeSmiley1969 - how interesting! You’d think it would be in the recruiter’s interest to aim for as high a number as possible…

That is quite a broad range, I’d expect the 100k people to be stepping up to the level or have less than 12 months experience, the 125k to have less than 5 years experience and the 150k people to be nearer to 10 years at the level. Doesn’t always apply but that’s my experience.
As an aside get him to do the tax maths on 120k - often a jump from 99k to 120k gives very little extra per month due to the tax cliff edge that currently exists

@Ineedanewsofa - thanks. Yes he’s thought a bit about the salary/tax implication there and would be aiming to do something clever with pension contributions…

It shouldn’t be - that’s part of the reason for the sex pay gap (and presumably other protected characteristic pay gaps). Once one company underpays for a role, for whatever discriminatory reason, that individual will keep being underpaid if their next salary is based on their previous.

Companies should be benchmarking the individual against their own banding and offering on that basis.

I'm a pay consultant.

That's a fairly typical pay range (max 50% above the min). I agree with Indeedanewsofa's general principle - lower in range is for someone stepping-up, middle is "fully competent" and top is a rock star and/or someone with very substantial capability

There’s a role that would sensibly be £50k-£100k in my industry.

A junior in that role with not much experience would warrant £50k as they learn the role and get more experience, but someone who’s done it for 20 years and would be capable of promotion, but doesn’t want the role change, they could absolutely be worth £100k.

Not necessarily, no. They want to maximise their opportunity of placing the individual, and getting their commission, which is usually based on a percentage of the salary agreed. The higher the salary offered, the higher the cost of commission to the employer, and they will take that into consideration when calculating their costs of employing the candidates.

If he's on just under £100k now, for tax and other reasons he'll be no better off at £120k. I suggest go for £130-135k.

Exactly this. And if a recruiter/headhunter places a candidate in a role and that candidate doesn’t work out (e.g. fails their probation etc), they may have to pay back their commission. So it’s very much in a headhunter’s interest that they put the right candidate up for the right role at the right price rather than overselling someone / setting them up to fail as ultimately it will come back on them financially as well as impacting their reputation.

This is all so interesting, thank you!

@HundredMilesAnHour and @thatsawhopperthatlemon - ah I see, that makes total sense.

@Ariela - I think it's certainly possible to be better off if you do something with salary sacrifice and pension contributions. You might not see much difference in take home pay though...

Are there similar positions across the company? The banding could be done to the job currently being done with differing levels of experience across the company. For example if there was a person who had reached the top of their game, and we want to keep them in the company (but there is nowhere to promote them to), we would offer more money, but that would affect the banding.

Why you talk to the agent to understand why that salary has been suggested? You don’t want to price yourself out.