What happens if you’re in late stage interviews with a company about a job and you’re asked for your ideal salary target – i.e., name your price? The catch: it’s a new role (perhaps they’re creating it especially for you), so you have no idea what a fair market salary is. Having to estimate salary when there is no clear anchor to point to or other comparable roles to copy happens more often than you think. In fact, it came up recently for a former client of mine (hence the inspiration for this post!). This can occur if the role is created for you, cobbled together from several distinct roles. This can also occur at start-ups or small companies where multiple functions might be crammed together into one super-role in an effort to get more value out of each individual hire. Or the industry could be too niche or the geography too small or there is no clear career path so it’s impossible to compare by title.
Unfortunately, despite how impossible it may seem to find a definitive salary target for a unique role, you have to respond with something. Here are five considerations when you have to estimate salary for a new job with few or no comps:
Approximate by type of role
The role may not be exactly finance or sales or operations, but it will be closest to something. Whatever functions are most represented in the role is where you need to look first. If the role is heavy business development, collect comps for sales, marketing and business development roles. If the role involves lots of numbers, look at financial analysis, accounting, even pricing roles. You want to understand the ballpark salaries of the more typical jobs in the same functional universe. Talk to people in these roles to get up-to-date salaries. Also check with recruiters who specialize in these roles.
Look at companies in a similar industry and line of business
You also want to take industry into account because a sales job in pharmaceuticals will pay more than a sales job in retail. Get down to the subsector or specific line of business level. If media, are you talking publishing, TV, film, radio, digital, advertising, etc? If publishing, is it books, magazines, technical/ academic, etc? Since the role will already not be an exact match, getting as close as possible to the same industry and line of business will keep your estimates from straying too far. Look to industry associations and publications for salary surveys or state-of-the industry reports. Recruiters who specialize in the industry are another good source.
Match for size and history of the company
In addition to industry, you need to look at companies of a similar size and age. You can’t assume that a smaller or younger company can and will pay what an established Fortune 50 company pays. However you can’t just make a generalization that the small sizes or younger brands pay less. It could be that a small company will pay a higher base because they can’t compete with big company benefits. Or a young company may pay more because they don’t have the brand. As you collect data from colleagues, recruiters, and associations, make sure you keep track of the size and age of companies providing the data.
Reverse engineer an estimate based on the bottom line impact
Finally, you don’t just want to see what the market is doing (and sometimes you just can’t find good comps). You should also look at the specific role at hand and calculate what success in this role could mean for the company. If you can get to a specific dollar amount of cost savings or revenues generated, you may be able to build a salary package based on a share of those results. Consultants who work in and around this role, company and industry would be a good source of information for how the business makes its money.
Adjust to your personal expectations
Using all four approximation methods above will point you to four different estimates and a possible low-to-high range. Then do a gut check – do you still want this role at this salary level? It’s important to incorporate your personal salary expectations into your offer demands. If the market salaries are pointing to something lower than what you want, you can still ask for more – charging for the uniqueness of the role or your fit to it, putting a premium for the complexity, adding a buffer for the risk of taking something new and untested, adding a premium for hiring you specifically!