MBA1254 How To Offer The Right Salary When Hiring

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Hey, welcome to the Hundred Dollar Ear. Because your business relies on you getting better every day, that's why we deliver daily 10 minute business lessons for the real world. I'm your host, your coach, your teacher, Omar Zenholm. I'm also the co founder of the Hundred Dollar mba, a complete business training and community online. And in today's lesson, you will learn how to offer the right salary. When you're hiring, you might have a job opening and you're posting that job on a site and you're going to start interviewing people. But you got the question on your mind, how much should I be offering for this position? How much should I be paying this new employee? So in today's lesson, I'm going to give you some pointers, some tips, some guidelines that you can use to come up with a good salary for you and your actual new hire. And a little spoiler alert, it's more than just money that you're going to be offering. We're going to look at this job opportunity as exactly that, an opportunity. What does that opportunity offer? That's really your offering, that's really the salary. But we'll also be touching on what exact figures should you be offering in terms of compensation. We got a lot to cover, so let's get into it. Let's get down to business. They say money is a touchy topic, and it's no different when it comes to hiring and offering a salary. You don't want to go too low and embarrass and discourage people from taking your offers, but also don't want to go too high and pay more than you need to or can afford. So that's what we're going to start. We're going to start with what you can afford. How much money can you allocate comfortably to this new position every month as a salary? It's important for you to come up with a figure yourself first. Looking at your own financials and your numbers. You have $6,000 to spare every month. So around $70,000 a year is what you're looking at. For the salary is sort of your cap. When you take on some of the research tips I'm going to give you, you might realize, wow, maybe I can't afford this hire right now. And that's okay. That's a good realization to have to make sure that you're making enough money to afford the hire. Or you might realize that you can afford it, but you're not going to be able to afford the most senior person in that position. So you really need to start with your own figure. What can you afford? And it could be a range. It could be, you know, between 50 and 60,000, for example, a year. And this is a good starting point because we need to live with some parameters. You need to work with some parameters here. Most of us don't have unlimited cash. We're not Google here, where it's like, it doesn't matter. We can hire anybody and pay them anything. So the restriction of funding is actually a pretty good thing because it allows us to work with a figure that we feel comfortable with. There's nothing worse than hiring somebody at a salary. You just can't pay them for the next year. Not a good look to have to lay them off because you just can't afford that salary. So start with your own comfortable number. Even if that number is an aggregate, like you say, every year, I can spend $150,000 on some new hires. And let's say you're hiring for customer service agents. So you know, this is the amount of money you can work with. So when you go to research, you can find out, okay, I can afford to hire two people or three people. A budget is a good place to start. Now that you have a budget, it's important for you to make sure that you can know the range of salary for that position in a location you're hiring from. So say, for example, you're hiring somebody in the US Then you need to know how much for the position that you're hiring. Let's say you're hiring a marketing manager. How much does a marketing manager make in a US Market? You can get even more specific and go within the city. So say, for example, how much does a marketing manager make in Los Angeles, California? Now, a great resource is glassdoor, glassdoor.com if you go to their website, they have a little tab called salaries. And you can type in any job title like marketing manager. And it's going to give you a range. The low range, the mid range and the high range. And obviously, the higher you go, the more experienced that person is, the more senior they are in that position. But it's going to give you a range, which is very helpful. And it's also going to tell you how much that salary is reasonable for that particular city. You need to make sure that you can pay the person that lives in that city so they can afford to live right. This highlights one of the huge advantages of having a remote team or having the ability to hire remote players. If you're open to hiring somebody who is not in your city, who's not going to go to a physical office or not in the same time zone as you, you may be able to hire somebody that's just as skillful, that's also a good fit for your team at a much lower salary. Here's an example. The average marketing manager in San Francisco makes $103,000 a year. This is, of course, according to Glassdoor. Now, Glassdoor aggregates all the different public salaries that companies publish and tell you. Okay, on average, in this city, this is how much they pay. Now compare that to a marketing manager in Alabama. That's $81,000. So it's a good savings of more than $20,000 a year. You're in the same country, but just a totally different state and area. In the states, cost of living is a whole lot cheaper in that state. You get the point. So you can really shop around, still get quality candidates. If you're open to hiring somebody to work remotely now, you can do what we do at Webinar Ninja, and our company is we hire around the world. We just try to find the best talent possible around the world. And you'll find that, hey, salaries are cheaper in different parts of the world, but the quality of candidates are just as high. Also, you want to look at your offer as an Offering. Many people find working remotely a huge perk, a huge appealing opportunity. They might think, hey, I would love to work from home. I would love to work from a coworking space, have my own flexible hours. Maybe they're introverted. Maybe they don't like office life, and they're willing to maybe take a cut in salary to work remotely so they don't have to commute to work every day so they can move to a city they've always wanted to move to. I know many professionals that have to live and work in San Francisco because they are, you know, in the tech industry. But if their company offered them to work remotely or if they found a job that allows them to work remotely, they would move to their dream city. It might be Colorado in the mountains, so they can snowboard all day during the weekends. They would be willing to take a cut in salary to live in a different city with a different environment, and even maybe save a few bucks because of the cost of living. So remember, you want to stay within the range, but remember, you have that asset if you're willing to offer them a remote position. Also, you need to sell your candidates on the actual company, what you're trying to do, what you're doing in your organization. People are looking for meaning in their life, even through their job. So they might take a little bit of a pay cut so they can find that meaning and really do something significant, something that excites them, something that's a challenge. And if you can sell that to them in the job description, you can get somebody who wants more than just money. Now in the job description, you can display what the range of salary is. I encourage a range because you want to make sure that you have some flexibility, because if the candidate's great and you want to, like, seal the deal, you have some wiggle room, but it's not necessary. You can always discuss that on the first interview if you'd like. Personally, I like the idea of putting the range of salary on the job description because it sets up expectations. People only apply if they know this is what they're getting. But I don't only, you know, put the range of salary, but everything that's included in the job, the perks, the benefits, working remotely, all the things that we give them, the team retreat, all that kind of stuff, make sure they're fully aware of everything they're going to get, all the benefits of working for your company. Thy ticket lady Jennifer of Coolidge.

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To wrap up today's lesson, I really love glassdoor.com it's a great resource to know the range of salaries for different job positions, different job titles in different cities around the world. There are companies that are called open companies that actually are very public about everything in their company, how much money they make, all the salaries and all the positions that they hire from the CEO down. One of those companies is Buffer, buffer.com. if you check out their blog, if you check out their website. Joel, the founder of Buffer, is very transparent about everything. I'm talking about every single thing. You can know how much Joel gets paid, his salary. You can know how much their support staff gets paid, how much their managers get paid. So I'd highly recommend to check out their blog and their website to learn more about that. All in all, start with what you can afford, compare it to what's out there in the market in different cities you're looking to hire from, and open up yourself to the opportunity of hiring remotely so you can find the best talent for the best price. And lastly, I like to be transparent about how much you're offering the range, at least in the job description, so people know what they're getting into and also what's expected of them. What we're looking for. Thank you so much for listening to the $100 MBA show. If you love this episode, if you learned something, let us know in an itunes rating and review. We read every single review and we'd love to know how we serve you, what you love best about the show. So we can keep doing that. Before I go, I want to leave you with this. Salary is a big piece of the puzzle when people are looking to choose a job. But it's not the only piece of the puzzle. It has great influence, but it's not the only influence. What your company believes in, what you do, what they're going to be doing, the culture, the people they're going to be working with, the autonomy they're going to have, the freedom they're going to have, along with the other benefits, really have a big factor. Some play a big part of the decision. So I definitely would make sure you highlight everything that you offer your new employees in that job description. Thank you so much for listening. I'll check you in tomorrow's episode Q and A Wednesday.

I'll see you then.

Take care. Of.

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