Salary Ranges

Why are pay ranges so important when advertising specific roles? There are often several reasons. Candidates can quickly judge whether an advertised job interests them based on the accompanying salary ranges. Similarly, recruiters can save lost time and effort when a candidate drops out mid-way through the recruitment process because salary ranges were not initially specified.

Employers, HR experts, hiring managers, and policies all come together when determining these ranges. But several factors and variables will impact how they determine specific ranges for specific roles. Read on to find out more about setting pay ranges effectively.

The right remuneration ranges allocated to specific roles can help businesses acquire better talent at an efficient cost. If the allocated range is too high, businesses can have trouble managing their payroll expenses down the road. Conversely, if the range is too low, a business can struggle to acquire talent. Here are a few tips to help employers set salary ranges that contribute to both hiring and business success:

Understand Business Needs Concerning the Role

The very first step to creating effective salary ranges is to understand the role in the context of the needs of the larger organization. Is the role intended to help fill key skill or talent gaps? Firms could hire a succession planning expert or a transformation consultant to guide a business through a transition.

These individuals possess very specialized experiences that could be in high demand among other employers. If a business needs a transformation manager to enhance sustainability, the organizational need is high, and therefore, the corresponding pay range for the advertised role could also be higher. This is especially true if a firm is facing tough competition when acquiring talent.

Create A System That Determines Pay Range Without Ambiguity

The mechanism that determines pay ranges should always be unambiguous. That being said, the system will vary based on the industry, nature of business, and overall company culture. The initial period may involve a lot of research. Working closely with stakeholders like a staffing agency can help businesses build stronger salary ranges that increase hiring efficiency and success.

Define the Core Skills and Duties of the Role Being Advertised

Another key factor that comes into play when determining salary ranges for a role is the role itself. Employers need to carefully define the core duties of the role. They must also identify the essential core skills needed to add value to the role. Based on factors like experience, academic skills, professional reputation, and soft skills, an employer can arrive at a range that seems more appropriate as compensation.

Create Transparent Scoring Guides to Help Compensation Negotiations

Scoring guides determine where a candidate lands on an internal scale. The scoring guide can help businesses quickly determine an accurate pay range. It can also help standardize the compensation model and make it far more transparent. Businesses can set minimum scores needed for all future talent acquisition plans.

Using these as benchmarks, businesses can then assign the appropriate scores (and pay ranges) to incoming candidates. The scoring guide can help an employer pinpoint the right candidate as well as the corresponding compensation.

Maintain a Balance Between ROI and Hiring Budgets

Businesses rely on efficient functioning that maximizes returns. In recruitment, maintaining an efficient balance between hiring budgets and the expected ROI on a new hire is critical for long-term success. Accordingly, employers have the right to expect a certain level of output or performance that reflects the pay range associated with a specific role.

Conversely, employers can also limit their spending with a smarter approach. For example, outsourcing manufacturing staffing to a specialized recruiter can help drive down hiring costs. Based on specialized experience, the third-party recruiter may even be able to source candidates at more efficient pay levels than the client business itself.

Accumulate Insights from Candidates

While determining pay ranges is very important for an employer, the process needs to be bilateral. Employers cannot set unrealistically low pay levels and still expect to acquire the highest quality talent. Therefore, it is critical to gather and accumulate candidate insights. Candidates are the best judge of whether a designated pay range is appropriate. If too many candidates decline an offer based on the pay range offered, it may need reevaluation.

Research the Competition’s Pay Ranges for Comparable Roles

Finally, competitor research can offer additional insights to enhance or correct salary ranges. Specifically, employers should look into what their competitors pay for roles similar to the ones advertised. The comparable roles allow employers to better judge the efficiency and effectiveness of the ranges they offer. This should also help highlight any key gaps to make the pay offered more competitive.

Employers should closely examine roles with higher attrition or shorter contract periods. For instance, if temp roles cost a firm more than their competitor, working with a temp agency in Pittsburgh could help make the compensation and payroll more competitive. A competitor analysis can therefore help employers offer pay ranges that are more attractive to the desired candidate pool.


What is a salary range?

A salary range refers to the minimum and maximum pay an employer is willing to offer to an employee hired for a specific role. Based on factors like hiring budgets, skill sets, and negotiation, the employee can fall at any point in this range.

How to assign salary ranges for roles?

Employers must assign salary ranges keeping in mind factors like the skill necessary for the role, the experience needed in a candidate, the sustainability of adding the minimum and maximum extremes of the ranges to an existing payroll expense, the expected difficulty to source the ideal candidate, and how competitive the salary range is compared to the industry standard for the role.

What to say when asked for a salary range?

To save time, employers pitch the lower extreme of the salary range and use that as a starting point for negotiating the final pay.

Can candidates ask about salary range during an interview?

Yes, since this information is pertinent to the rule and the conditions for hiring for the role the candidate is being interviewed for.

How to calculate the optimal salary range?

There is no sure way to do this. Most employers have their own internal policies governing hiring budgets and payroll. This can get fairly complex when recruiters have no experience with technical or highly specialized roles as well.

However, it may be a good idea to get a third party like a staffing firm with experienced recruiters on board. This allows them to offer more input on the optimal salary range based on experience and a deeper understanding of the role.

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