9 Factors That Determine Your Compensation
While applying for a job, you have a few details to consider. Before you even submit your application, you should consider whether the position is right for you. This means taking a close look at the job duties, workplace culture, and one more factor that often. Gets overlooked - the compensation. Every job has a salary range, but that doesn't tell you exactly how much you should earn. To figure that out, you need to look at the compensable factors.
What Are Compensable Factors?
To put it simply, compensable factors are factors that affect your salary. However, it's not as easy to understand compensable factors as it sounds. A compensable factor is the way in which an employer might judge your value. This could include your effort, skills, and level of responsibility.
As an employer decides how much money they should offer you, they need to do some calculations. If they offer you too little, you may not accept the position or stick around with the company. But too high of an offer means they are increasing their financial burden unnecessarily.
The Nine Compensable Factors
To have a better understanding of how an employer calculates your salary, you need to know a few of the compensable factors. All of the following are considerations am employer may make when determining your salary.
Years of Experience
The more experience you have in your position, the higher your salary will be. Over time, your experience allows you to perform better and handle situations with less guidance.
It's important not to confuse experience for skill. Although a person can gain skills through their experience, your experience level does not equate to your skill level. Measuring experience is easy because there's a number associated with it, but skills can't be measured with a number.
Education Level
When It comes to compensable factors, your education level refers to much more than your college education. It includes your certifications, coursework, and trainings. Although your secondary education matters, it's not the sole factor an employer considers.
Your education needs to be relevant to the position. If you have coursework in computer programming but work in fitness sales, your employer won't care. Other than your general degree, only relevant experience matters.
Your Responsibilities
If you only have a few responsibilities, you're likely to have a relatively low wage. With more responsibilities comes better pay.
That said, there are some exceptions to this rule. If you have only a few responsibilities but they are essential responsibilities or have a major impact, you can expect to receive fair compensation. You should also think about how crucial your responsibilities are to the company, and what type of consequences your actions have.
Complexity of Your Work
Some tasks in the workplace are simple and almost trivial. As you might expect, people with these tasks get paid less. It's individuals who have complex tasks that receive better pay.
Just look at the salary of a manager of a company compared to an entry-level employee. Whole an entry-level employee might only have a few simple tasks to do, the manager has much more complex tasks.
Whether or Not Supervision is Necessary
In a senior role, an employee may need little to no supervision. Therefore, the company can afford to pay them better. They don't need an extra set of hands to keep 6hr employee on track or in check.
Employees who need supervision can't receive as much money because the company needs to pay other staff members to watch or help them. Otherwise, the quality of work or productivity would decrease.
The Amount of People Under You
If you have a few people working under you, there are certain management skills you need to possess. As you probably realize, this makes you a more valuable asset to the company. Your salary should coincide with the amount of people you supervise.
At times, you may take on more workers without receiving a promotion. If, suddenly, you have ten people instead of five working for you, it's time to meet with your boss. You deserve a raise. You can use your increased responsibility as a reason for the raise.
How High the Stakes Are
When a mistake comes with serious consequences, an entire business could be on the line. If you're someone in a role that leaves no rooms for mistakes, you should have a a high salary.
The stress of having such an important position could affect your quality of life. To make up for the stress, you receive more compensation. The better pay also puts your employer at ease.
The Working Conditions
Although this isn't always the case, some employers pay more for poor working conditions. For instance, an individual who needs to stay in a remote site for weeks at a time could have an offshore allowance.
Only some industries have this way of thinking. Therefore, you shouldn't assume, you will receive high pay because of your bad working environment.
Security Clearance
In certain positions, secrecy is key. Before hiring you for such a role, you need to undergo a rigorous background check and sign confidentiality agreements.
Because your loyalty is so important to them, an employer is willing to pay more for you to have a role with high security clearance. You're less likely to quit and more likely to comply with the job requirements.
Why It All Matters
The HR department is responsible for deciding how much you deserve. However, this doesn’t mean you should ignore the compensable factors. Whether you're applying for a new job or you're already employed, you should know what you're worth.
When you get a job offer, knowing your worth allows you to negotiate a better salary. And if you already have a job, knowing your worth allows you to negotiate a raise. You could be earning much more than you already do.