The phrase "competitive salary" is thrown around quite a bit. But what does it actually mean? And how can both employers and candidates ensure they're on the same page when it comes to compensation? Let's break it down.

What is a competitive salary?

Simply put, a competitive salary is one that aligns with the market rate for a specific role in a particular industry and location. It's about offering or receiving fair compensation that attracts and retains top talent. However, "fair" is subjective and can vary based on several factors.    

Factors influencing competitive salaries:

  • Job role and responsibilities: A senior management position will naturally command a higher salary than an entry-level role.
  • Experience and skills: The more experienced and skilled a candidate is, the more they can expect to earn.    
  • Industry: Some industries, like tech or finance, tend to offer higher salaries due to high demand and profitability.    
  • Location: Cost of living plays a significant role. Salaries in major cities are often higher than in smaller towns.    
  • Company size and stage: Larger, established companies may have more resources for higher salaries, while startups might offer equity or other benefits to compensate.    
  • Market demand: When there's high demand for a specific skill set, salaries tend to increase.

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For employers:

How to determine a competitive salary:

  1. Research industry benchmarks: Use resources like the Michael Page Salary Guides to dig into salary ranges for roles in your industry and region.  Our guides help you benchmark your offers against the market and ensure you’re offering competitive salaries that appeal to qualified candidates.
  2. Consider your company's budget: Balance your desire to attract talent with your financial constraints.
  3. Factor in benefits and perks: A comprehensive benefits package can make a salary more competitive. Where budgets are limited, consider what other factors matter most to your candidates, whether that’s around potential for progression, training and development or generous holiday allowances.
  4. Work-life balance: Flexible work arrangements and generous vacation time are increasingly important.    
  5. Be transparent and flexible: Openly discuss salary expectations with candidates and be willing to negotiate within reason.

Related: Five reasons why your organisations should use salary benchmarking

For candidates:

How to assess a competitive salary:

  1. Research salary ranges: Use resources like the Michael Page Salary Guides to understand the typical salary range for your desired role and experience level. Use these insights to set realistic salary expectations for your job search.
  2. Consider your value: Evaluate your skills, experience, and the specific requirements of the job.
  3. Factor in the entire package: Don't just focus on the base salary or miss a great job opportunity because of salary alone. Consider how perks or benefits like health insurance or retirement plans can make a difference to your overall goals.    
  4. Be confident in negotiations: Know your worth and be prepared to negotiate for fair compensation.

The importance of open communication:

Whether you're an employer or a candidate, open communication is crucial – it’s a two-way street. When employers are able to foster transparency about salary ranges and job seekers are prepared to discuss their expectations, this helps ensure both parties are aligned and fosters a positive recruitment process.

What next?

Whether you're an employer trying to attract top talent or a job seeker looking for the right opportunity, knowing what a competitive salary looks like is absolutely key. It's more than just a number, though – it's about finding that sweet spot where everyone feels valued. Ultimately, it's about finding the perfect match – where skills, experience, and compensation all align.

Doing your homework is crucial. Dig into resources like the Michael Page Salary Guides – they're a goldmine!

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Ready to chat about your next hire or job hunt?

Employers: Request a call back to discuss your hiring needs and how we can help you find the perfect candidates.

Job seekers: Submit your CV and let us help you find your dream job with a competitive salary.

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