Those of you who've struggled to create salary ranges for engineers already know these are some of the most difficult jobs to price. Market data is prevalent which only seems to exacerbate the problem. Ever look at the Radford Survey? There are literally dozens of engineering job titles to choose from. And I'd be willing to bet that unless you threw in the towel and organized your engineering department around Radford's titles and levels, you still can't find decent matches to your company's jobs.
I recently came face-to-face with this issue when a client in the Engineering Consulting industry came to me with a challenge -- help us price all our engineering jobs throughout the country. They were tired of listening to field staff gripe that the salaries ranges were wrong. So, after 80 years in business, they decided to seek help.
I've known for a long time the root of the problem stems from the fact there are at least than 19 different factors to consider when pricing an engineering job:
Of course, each factor has numerous levels and options, many of which have the potential to influence pay.
In addition to pay, these factors also influence a large number of other organizational programs and practices such as:
- Job Titles
- Job Desscriptions
- Performance Expectations
- Training & Development
- Job Transfers
- Promotions (and demotions)
- HRIS Tracking and Reporting
So in case you weren't convinced before, companies have lot riding on getting this right.
Most of the methods I've seen select two or three of the above factors, use those to establish ranges, and disregard the rest. But I knew from experience that whatever factors you leave out, those are the ones an engineer will bring up when they grumble about pay. "But what about my Masters degree?" "I manage larger projects than Ralph." "My clients are much more complex." "I've been here for nine years." "I worked for 20 years before I got here."
And you know what, the're right; all these things really do matter. But even if you don't think they matter, what difference does it make if you can't convice them of that?
So this time I took a bold new approach and comitted to consider every factor -- to leave nothing out. The result was an interactive pricing model with menus that allowed the HR department to select from an array of variables to define the precise elements of every job. These variables reside in tables behind the scenes, with built-in factors reflecting market conditions and internal value preferences. They are also linked to BLS geographic differential data and the Company's own range structure.
The result looks like this:
Simple on the surface; with a whole lot going on behind the scenes (which can't be divulged for confidentiality reasons). Using this, the client has been able to price every engineering job separately. They are even considering making it available to managers so they can price jobs on the fly when considering new hires.
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