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Determining How Valuable a Role is Within Your Company


When setting salaries, you need to determine how valuable the role in question is to your businesses. While this number likely won’t impact the low end of your salary range for the position (which will most likely be dictated by industry and area standards), it will have an impact on the maximum you’re willing to offer to an outstanding employee.

But how do you figure out this kind of number?

Look at the data you already have on hand.

Are there, or have there ever been in the past, people at your business doing the same or similar work? Ignore job titles for a moment, which can be misleading. (It doesn’t really matter if the work was done by a secretary, an office manager, an administrative assistant, or Carlise from the call center who had a knack for finding inventive ways to make herself useful that didn’t involve being on the phone.)

  • What kinds of expenses did you have when there was not one person dedicated to doing the work, vs when there was?
  • What kinds of income were brought in due to having someone in the position?
  • What were these same measures for when you had someone amazing in the role vs. someone who was just okay? Someone who was just okay vs. someone terrible? Someone terrible vs. nobody?

Setting the Perfect Salary - free PDF download

When you don’t have that information.

If you’re a newer business, you’ve never hired someone to do this kind of work before, or the business doesn’t have the kind of records or institutional memory to make this kind of data easy to access, you have a few options to look at: your network, your employees, and your imagination.

  • Your network: Have they had someone in this kind of role before? What kinds of income or savings did they see as a result?
  • Your employees: How much time would they save if someone was brought on to do this specific work? How much additional work could the team produce?
  • Your imagination: How much easier would it make your life to have a person doing this work? What is that worth to you?

Make sure you’re not confusing business value with prestige or personal worth.

Yes, a hotshot new project manager might save you a lot of money. You know who else might? A hotshot new plumber. Try to be objective when considering the costs and benefits of bringing on a new employee, rather than just throwing money at whatever is shiniest at the moment.

Also, keep in mind that putting a number on the value of someone’s work isn’t the same as putting a number on the value of a person. Tucker can be a lovely person and a hard worker who is fresh out of school and so green that he isn’t really adding a ton of value to your business yet. It’s okay that his salary reflects that reality. This doesn’t make you a bad manager.

When you’ve already hired someone.

If you weren’t sure about a position’s value before hiring, you’ll definitely have a clearer picture a year out. Is Janine in accounting clearly worth her weight in gold? It’s worth making an adjustment to reflect that. Remember that retaining an excellent employee is almost always a better financial decision than hiring a new one, so don’t forget this step when you’re thinking about value and how that relates to setting salary.

Besides the value of the role, what other factors go into determining salary?

We could go into more detail here, but why not take that information home with you instead? Download How to Set the Perfect Salary for more help with this tricky topic.

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