How much should I be paid?

One of the most fundamental aspects of finding (new) work is knowing how much we should be paid for it. This knowledge enables us to negotiate an appropriate salary for our skills and ability with confidence, and improved success.

Knowing my market value

Some engineering jobs, particularly graduate schemes at large employers, or positions in the public sector, have fixed salary levels. The majority, however, rely on a relatively ad-hoc process of establishing a given engineer’s “market value”.

Without diving too deeply into economic theory, the idea is that for the skills you are “selling,” there is a price that any given company - a “buyer” - is willing to pay. In theory this is great. Engineers can browse what every company in the marketplace is willing to pay for their skills, and select the highest bidder (other factors like mission, culture, benefits etc. notwithstanding).

Data Engineer Talhaa elaborates on this concept here. We’ll come back to Talhaa repeatedly in this essay, because he cuts to the core of many of the questions around engineering salaries.

In practice, it’s a lot more messy than that. cord has been built to give engineers as much information as possible about what this marketplace of “buyers” looks like, but there is still, realistically, no way that an engineer can peruse the entire marketplace of employers from a distance. Positions on cord and other sites are typically posted with a salary range, and the true “offer” is negotiated at the end of an interview process.

So, how much to ask for? Do you pitch yourself at the bottom of the range, or the top? Risk missing the opportunity, or hold out for the big bucks?

If we could quantify how much money a company would be likely to generate as a direct result of our work, it would be easy to identify an “asking price” that everyone could agree on. In reality, it doesn’t happen like this for two reasons, both of which are touched on by Full Stack Developer Levon.

The first reason is the difficulty in quantifying the value of our output. While it might be theoretically possibly to calculate the monetary value of all the metrics Levon refers to, in practice, it’s not feasible. The effort required wouldn’t be worthwhile, even if we could accurately measure every variable.

Secondly - and most intriguingly - this isn’t how engineers, and by extension their employers and colleagues, tend to measure their output. When we approach our work purposefully and wholeheartedly, what matters is a qualitative assessment of how functional and useful any given piece of work is, rather than a quantitative assessment of how much money it will generate. Besides sales, and positions in the financial sector, most professions follow this same basic rule.

The imperfect solution, therefore, tends to be to benchmark our salary expectations compared to the marketplace of other engineers selling similar skills. This is where accurate information is invaluable. CTO Paul has a good stock of recommendations for reliable sources of salary information.

Engineers with a cord profile can view personalised salary insights based on their own skills and level of experience using the Salary Benchmarking tool.

Increasing my market value

The next logical question, if we want to command a higher salary, is how do we increase our marketability? What can we do to climb up the imagined ladder of value that a labour marketplace represents?

We are conditioned to think that the length of time we’ve spent doing a certain form of work dictates how much we should be paid for doing it, and this is indeed how the job market tends to function in practice. However, that stance oversimplifies it.

When we perform work over a longer period of time, two things (can) happen.

1. We get better at doing that work (so we can do more of it in the same amount of time, and/or perform it to a greater standard)
2. We learn other skills that make us more effective, or allow us to perform other tasks around the core work

Both of these increase our value in the marketplace, but they aren’t necessarily correlated to the number of years we’ve spent performing a particular task. Quick learners, and especially anyone willing to devote time and energy to learning new or perfecting old skills around their work, can jump ahead of other people in the same labour marketplace by adding to their skillset. Talhaa has a good analogy for how this can work in practice for engineers.

A common mistake by engineers is to assume that only new technical skills will have this effect. Engineering Manager Hannah, who converted to technology from a previous career in an “unrelated” sector, but who now hires engineers herself, explains why this is a misconception.

In short, when negotiating a higher salary, or considering leaving our current position in order to do so, it is worth carefully evaluating the entirety of our skillset. Rather than dismissing a previous role as a Project Manager, it could be worth considering how the skills learned there might enable you to step in more readily as an Engineering Lead. A previous career in law might not seem to offer much handover to working as a Developer, but a keen and diligent eye for detail is a must-have for both professions.

Finally, it’s worth noting that different hiring managers value different things. Some value a prestigious academic background, and it can be disheartening if this isn’t something we feel able to bring to the table. However, as analyst Altan demonstrates, there is a widely-held opposite view to this.

Operating in a marketplace involves finding a buyer who wants what you’re selling. It’s safe to ignore those who seem fixated on finding something you don’t have to offer: there are plenty more out there who will want the particular blend of abilities and experiences you bring to the table.

Negotiation

All this is to reach a point where we know clearly what it is we’re selling. These details may or may not have made it onto a CV, or a cord profile, or something similar. In many respects, when it comes to negotiating a salary, having them written down in one of those places is of secondary importance to having them in our head.

Doing so will enable us to negotiate a salary with confidence. Not arrogance, but a firm understanding of the skills we have to offer, and a good idea of what the market typically pays for these skills. Talhaa expresses his frustration at how often people enable a lack of self-belief on this front to hold their salary levels down.

Talhaa’s advice probably needs to be taken with a pinch of salt. It isn’t literally true that engineers can ask for any salary they want - the occasional eye-catching headline about MIT graduates hired by Google notwithstanding. It is true that engineers are (in the time and place in which Talhaa made the comment) in high demand; the UK in the early 2020s is characterised by an engineering labour market with far more open positions than developers to fill them, giving engineers a degree of leverage in salary negotiations. That situation, however, could vary by time and place.

However, what is true is that, if we’re near the “business end” of an interview process, the chances are that the company likes what they’ve seen so far, and as such it’s fair to consider ourselves as sitting somewhere near the top of the salary range advertised with the position. (When these are too broad to be informative, or if the top end only just meets minimum expectations, it can be worth having a clarifying discussion earlier in the process).

The upshot is that the best negotiators believe in their own ability. Combined with a sound knowledge of what our market value is, this confidence forms the best foundation for successfully negotiating the appropriate salary for our best work.