Do you ever want to channel your inner Jerry Maguire, and scream, “Show me the money” to future employers? No? I do! I wish that employers would disclose the salary up front, so that, we can all be on the same page. Unfortunately, the world does not work that way. Therefore, it is important to understand the salary range of your desired position when searching for employment. Salary range is different for an individual than it is for an employer. For an individual, the salary range includes the compensation parameters a person wishes to earn, based on their lifestyle, education, skills, knowledge, and prior experience. For employers, it is the amount that the organization has and is willing to pay a new hire. Employers consider their budgetary restrictions as well as the market value for the specific position.
A salary range includes a low, mid-point, and a high salary. The Bureau of Labor Statistics (BLS) calculates wages by state, region, and occupations based on a percentile scale (i.e. 10%, 25%, 50% (Median), 75%, and 90%). For example, BLS reported the national mean annual wage for Graphic Designers is $52,290, which represents the 50th percentile. It is also important to consider the average wage based on your desired geographic location. If you want to work as a Graphic Designer in New York, then the average mean wage is $52,820-$69,490. However, in Arizona, it is $26,160-$41,140. You can use this range as a starting point for establishing your personal salary range.
After completing the initial salary range research, you can create a personal range based on your experience, education, and budget.
Creating a budget will help you determine the salary that you need to match your lifestyle. You can use websites, like Mint.com or Quicken.com, to develop a personal budget. First, you must calculate fixed expenses, such as rent and car payments. Be sure to include costs relative to your desired geographic location. Rent in NYC will be vastly different from rent in Hartford, Connecticut. Then, you can add in variable costs, such as utilities, grocery bills, etc. Finally, add in your discretionary expenses, or as I like to call it the fun fund, such as concert tickets, travel, and gifts. Ideally, your budget should fall on the low-end of the researched salary range so that you have disposable income for savings and emergencies. If it does not, then you should consider where you could cut costs, starting with your discretionary spending. It is always helpful to overestimate (slightly) costs so that you have a cushion.
Once you have determined your budgetary needs, you can make that number the low-end of your salary requirements, and add between $10,000-15,000 to establish your top range. For example, if I calculate that my (overestimated) budget is $52,000 plus $10,000, then my salary range is $52,000-$62,000. Some argue that you should add $20,000 to establish your top range, but remember that top amount will also dictate how much you are willing and able to negotiate once an offer is on the table. You do not want to price yourself out of the market, or risk landing a job that will not provide for your basic needs. The next time you want an employer to “Show you the money”, you will actually have an idea of what that money should look like.
Do you need more assistance establishing a salary range? Stop by the Center for Career Development. You can visit us for a same day career coaching appointment for individual assistance.