How to set a salary for key IT jobs
If you want to attract and retain top talent, the wages you pay should be your first priority. But how do you set a salary for key IT jobs?
Like any money your business spends, IT staff salaries are an investment. Every business needs to make sure they’re getting a good return on theirs.
Here’s how to start doing exactly that:
Why is setting IT job salaries correctly so important?
Employee attraction – more than anything else, the right salary attracts the right people. Other factors matter, but pay is still the primary driving force for most job seekers.
Workforce satisfaction – staff happiness has been shown to be related to pay and productivity levels.
Employee retention – individuals are much more likely to stay in an accurately remunerated role even if other factors are not what they wish them to be.
How to set a salary for key IT jobs
1) Find the local average
The best place to start setting a salary for key IT positions is to check what everyone else is offering:
–Look locally – if you were recruiting for a vacant software engineer job in Bristol, you might expect to pay a lower salary than if you were in London, for instance.
–Check competitors – what are your chief competitors of an equivalent size able to offer in terms of IT salaries? Check LinkedIn or the firm’s website.
–Remember cost of living – in the UK, essentially everything is more expensive than it used to be. Bear this in mind if you haven’t set a new salary in a while.
2) Work out (and cost) the benefits you’re offering
Setting the wage you’re paying your IT specialists is vital. But most employees now expect more than just straight-up money for the work they’re putting in. Commonly expected benefits include:
-Health insurance
-Pension and retirement plans
-Professional development and training
-Health and wellness benefits (like gym memberships)
-Bonuses
Not to put too fine a point on it, all of these things are highly desirable for the employee – but they also cost their employer money.
This makes it vital to work out the total cost of hiring someone before you set the salary level for any IT vacancy you need to fill.
3) Work out what you can afford
We all wish we could pay well over the odds and still turn a profit. Unfortunately though, few companies have anything other than limited resources to hire new team members.
It seems obvious, but it’s not uncommon for a team leader to say they absolutely must hire – for example – a new web developer because of a high workload.
Unfortunately, they haven’t worked out accurate hiring and training costs. The company suffers and so does the team’s productivity stats because they have too much capacity and higher wages.
4) Set a salary range
A salary range is the distance between the absolute maximum you can or would pay down to the minimum you might expect to be able to pay.
This is your basis for negotiation with anyone you are hiring for any position. It will be based on the above factors as well as:
Colleague salaries – the person you recruited for that new IT support job should be paid within the same range as existing team members. Anything else could be discrimination.
Likely return – to get a good Return On Investment, the salary of any new hire shouldn’t cost more than the amount they will make (or save) the company.
Experience – someone with years of experience is going to be worth more to you and will likely cost less to train. Aiming for lower experience can allow you to aim for a lower salary.
5) Understand employee expectations
The UK has a chronic skills shortage for many Information Technology roles. This can mean that you need to pay even more attention to employee expectations than normal.
There are also variances in things like location and individual roles that make it easy to set the wrong salary for IT experts such as data engineers. Especially if you haven’t recruited for them before.
This makes it important to ask potential candidates what their expectations are. If you regularly get responses outside of your salary range, you might need to reassess.
Remember that IT job salaries aren’t static
Once you’ve set a salary for your key IT jobs, you’ll need to revisit it regularly.
You always want your team to feel they are compensated fairly for their time and effort. As their experience grows, as inflation and the cost of living go up, so too should salaries if possible.
This is how you retain your best and brightest IT talent long into the future.
Need to make sure you’re setting the right salary and hiring the best talent out there?
Let’s talk. Ernest Gordon is a specialist engineering and IT recruitment agency. Our market-leading AI recruitment tool pairs you with top candidates from our extensive talent pool.
Reach out to us today for a cost and commitment-free chat about your recruitment needs.