How do you set a salary?

[1000feet]

I'm going to need to hire someone soon, and I'm trying to determine the right salary to pay. It's hard to find real information but I've seen data from a few different places that confirms my initial guess about what I should pay - and yet it still sounds low to me.

For those who have hired someone, how do you determine their salary?

For those who are employees, what factors are important to you in a fair salary? What would make you think that your salary is wrong?

[Gene]

Originally Posted by 1000feet

I'm going to need to hire someone soon, and I'm trying to determine the right salary to pay. It's hard to find real information but I've seen data from a few different places that confirms my initial guess about what I should pay - and yet it still sounds low to me.

For those who have hired someone, how do you determine their salary?

For those who are employees, what factors are important to you in a fair salary? What would make you think that your salary is wrong?

Why don't you give us more information about the position you will be hiring for and the general location where you will be hiring? It is not easy for me to give you the feedback you requested without more information.

[Sam988]

I would just look at the market's average salary for that position. A tip, and you probably already know it, is to always ask first for what the person expects to get as salary, before telling them the amount you're willing to pay. This way, if the person asks for something below of what you would accept to pay, then great for you; if the person asks for something above, then tell him that the market average is "X" and that's what you're willing to pay.

[Doku]

Personally, I go with what value I think the person would bring to the company, and what I can pay for that value.

I generally am VERY picky about who I hire, and generally pay above market rate. This helps me ensure that I have a low turnover. I can afford to pay people more money if I know that I don't have to find a replacement in 6-12 months.

One of the things that always irritated me in the past was asking people what they were currently making. As if what I am bringing in at my old job has anything to do with the value that I can provide for the new company. A better question is to ask them what salary level they are looking for.

More than salary 'though, be sure to include good benefits. Even if your company isn't large enough to offer good healthcare, or 401k or ... you could work with the employee about schedule, vacation, etc. For example: Does s/he need to be there at 8? or can they get kids on the bus, and show up at 8:15 - 8:30? MANY people will work at a job for less pay if they feel needed, respected, and are treated well.

[Jim11]

You can also research the local job sites to see what other people are paying for comparable jobs. Just do a search for that type of job and go back as far as you can to get some good comparatives

If you provide more detail on the position you're hiring for you will probably get more detailed answers.

As an above poster mentioned you need to also factor in benefits and circumstances when considering salary.

If it's an admin job or something, there are many things you can advertise and offer to make it more attractive. ie: flexible hours, extra vacation if needed, etc.

Once you hire someone, if you like them, it is often desirable to pay slightly higher than the market rate if you want to reduce employee turnover. Most employers don't do this, but it makes sense in many situations. The turnover rate in the industry and the amount of time it takes to train someone to do the job PROPERLY are important factors in determining this.

[Doku]

Not that I link pimping sites, but a good place to do a salary search is indeed.
Salary Search | Indeed.com

[1000feet]

Thanks for the great replies! I'm looking for general concepts that apply regardless of the type of job - things like cost of living (how much someone needs to earn), value added, and what other local companies are paying (although I need to set myself apart from them somehow). This is a full-time job so it's a bit harder to find related postings that actually mention a salary.

Doku, I agree that the current salary doesn't really affect how much value someone can add but some people may be influenced by it - for example by feeling they're worth more than that, or by thinking that if they're taking a step down the job has to be going somewhere.