How Much Should a Candidate's Experience Determine Their Salary?

“Requirements: 5+ years of experience.”

Lines like this are incredibly common in job postings. But within that requirement, there’s an awful lot of variability included in that little plus sign. 5 years? 20 years? Beyond the basics of hiring, what does that experience mean when you’re setting salary?

Not all years are the same.

Ten years managing a team of two is not the same thing as ten years managing a team of 15. Here are some things to think about when adding up those dates on a resume.

• Was this work full- or part-time?
• Was this a traditional job, or was it a volunteer position, work-study job, or internship?
• Was this work done for an employer, or was the person self-employed?
• Was the employer a family member or close friend?

None of these are inherently negative. Many interns are given opportunities to learn that entry-level employees don’t necessarily have access to, and people working in the family business often wear multiple hats in ways that can make them outstanding employees. Nevertheless, it’s worth digging into things like this more fully in an interview, because one working environment doesn’t necessarily translate well to another.

Experience learning can sometimes be more helpful than experience doing.

Software and computer applications are common examples of this. Suppose you want someone on board with experience using Microsoft Dynamics. Jeremiah has this. Janelle doesn’t, but she has a strong history of teaching herself new technology and quickly becoming the go-to person in the office for both training and troubleshooting. Jeremiah, with more experience, might reasonably expect to command a higher salary to start.

But within a couple of years, Janelle has surpassed him in her grasp of the system and her ability to integrate other technology as well. Are you prepared to provide Janelle with a large bump in salary as a result? If not, you risk losing her to a competitor that will. In fact, offering a higher starting salary might have been the better move to begin with.

Experience should come with skills.

People often spend years doing jobs that they are not particularly good at. 5 years managing a dysfunctional team teaches you an awful lot about how to be a dysfunctional manager, but that’s not usually the skill-set you’re looking for.

Similarly, there is plenty of experience that comes with skills that are perfectly useful, just not pertinent. Landscapers who’ve been working in formal gardens may not know anything about turf management on a golf course. Marketers who’ve been immersed in social media might not have the same degree of competence in managing print ad campaigns. While keeping an eye out for learning skills (as mentioned earlier), don’t let experience lull you into thinking it’s equivalent to skill level.

So does experience play into salary at all?

Absolutely. But you’re not just looking for any old experience. You may want to offer a higher salary when you’re looking at an employee with:

• Experience that shows growth over time.
• Experience that’s directly relevant or transferrable.
• Experience validated by strong references.
• Experience that led to skills (both hard and soft).

When we stop using experience as a shorthand for quality and look more deeply at what those years have led to, we’re able to hire and compensate people for what they’re really worth. And that leads to a healthier workplace for everyone.

Does setting and negotiating a salary have you pulling your hair out?

Download our free guide, How to Set the Perfect Salary for guidance to help you through the process from start to finish.