It happens all the time.
An employee marches into her boss’s office demanding a raise. A college graduate looks forward to a high starting salary because he “deserves” one. A job seeker researches the average salary for a position she’s interested in, expecting to automatically be offered something in the same arena.
Although salary information is one of the most important aspects of finding a new job, it’s also the most under-researched. Unfortunately, with so many salary resources out there, there is always conflicting information and people who always disagree with, or don’t understand, the information presented.
What you, the job seeker, must understand is that the information provided to you via salary information sites should merely be a starting point in your research. What you find as the average salary for a position doesn’t guarantee that is what you will earn; there are too many other factors things that come into play.
To help understand how you can analyze the salary information you find online and apply it to your situation, we’ve brought in compensation expert Jim Brennan, senior associate with the ERI Economic Research Institute, to help.
Q: How do starting salaries compare to median or average salaries?
Starting salaries are usually the lowest amount employers will pay for work, Brennan says. Companies expect new hires to know less about a new position, so they typically start them lower than someone with an established track record.
“Employers generally take care to assure that entry starting rates match the hiring market requirement and that new folks will start at a lower salary than veteran job peers,” he says.
Median salaries are the amount in the center between the lowest and highest paid compensation. If workers in an organization are paid $30,000, $45,000 and $50,000, the median salary at that company would be $45,000.
Average salaries are the product of the sum total of all the salaries, divided by the number of observations. With the above figures, for example, the average salary would be $41,666.
“Median salaries are better measures of ‘normal’ pay, being central values. Averages can swing wildly with the addition of extremely high or low values to the group,” Brennan says. “No matter how high the high, or how low the low, the median is still the middle.”
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Article information provided by SalaryExpert.com
