What is the most important field in a Job Description, according to you?

Job role, Experience or Salary?

Whatever your answer might be, salary is a top concern for both recruiters as well as candidates. Isn't it?

Hence it’s quite necessary for a recruiter to estimate the correct salary range when hiring employees. In this article, we’ll focus on the factors you should look in when deciding on a salary scale for Software development employees.


Though the article targets only software development employees, some of the factors can be used to decide on a salary scale for any employee regardless of his job role.

Before getting into the different factors that affect salary estimation let’s look at why it's so crucial.

Importance of the right salary estimation

Many people forget the importance of the right salary estimation. But it can lead to a lot of different problems like-

1. Not finding the right candidate

Even if all fields in your job description are correct, and the salary is not, there’s a high chance that the right candidates won’t be applying for the job position. Not only will it result in attracting fewer candidates but it would be impossible to find the right candidate.

There’s a great chance you’ll end up getting only unqualified applicants.

2. Loss of Money on Sourcing Candidates

The direct consequence of not finding the right candidate results in the loss of money spent on sourcing these candidates. Be it through job portals, through LinkedIn Ads or any recruitment agencies; you'll lose on a lot of money.

3. Finding Job Jumpers

When a company is hiring, they are looking for candidates who can work with the company for a longer duration (let’s say a year or two). You don’t want to hire Job Jumpers.

A job jumper is an individual with a track record of keeping employment only for a limited time before moving to another job or employer.

According to Career Builder -

43 percent of Employers won’t consider Job Jumpers

Salary estimation depends on a lot of factors, let’s see what these are -

Experience

This one is the most obvious factor, the more the experience, the greater the pay scale. Unfortunately, there is no ratio between experience and salary. It depends on a lot of other factors too.

Let’s see with an example -

We’ll use our Salary Calculator to check the changes in the salary depending on the years of experience. You can use our AirCTO Salary calculator to find salary estimates for most of the tech roles including Data Scientist and Full Stack Developer. You can filter using Location, Experience, and Institutions.

For this example, let’s analyze the pay scale of an Android Developer. After analyzing we saw that -

The estimated salary for an Android Developer with 0-2 years experience was 4-8 lakhs, while the wages for an Android Developer with 2-5 years of experience was 8-15 lakhs.

From the data, it’s clear that it’s an increase of almost 2x.

Hence it’s quite evident that you need to keep a close account of the experience when setting a salary range for a position.

Note - The data is susceptible to changes depending on the location and other factors.

Type of Programming Language/Skills

The pay scale changes considerably depending on the type of skills you are looking for in a developer. This is after keeping all other constraints such as experience, location, etc. constant.

According to Monster-

Salary of a Web Developer (knowing Ruby on Rails) - $50,700
Salary of a Web Developer (not knowing Ruby on Rails) - $44,900

That’s almost 17% lesser salary. It’s clear that for some skills you need to shell out more money while for others it's considerably less.

Let’s see a different example -

Like Ruby on Rails, a developer (assuming every other skill is the same) who knows Java vs. a developer who doesn’t, will get 9% more salary.

It all depends on the current popularity of the skill. For example, using Java, you can create from business applications to video games. There are more than three billion devices that run on Java.

In the end, it depends, how futuristic the technology is.

Institution

When hiring engineers, mainly from premier institutes like IITs and NIITs the pay scale considerably changes when compared same engineers from normal colleges. For India, clearly, a developer from IIT would demand more than a developer from a normal college.

The same wouldn't be right after 3-5 years of experience, but the gap is large initially.

Let’s analyze this by using our Salary Calculator.

Taking the example of an Android Developer -

The estimated salary of an Android Developer (passed from IIT or NIIT) is 7-14 lakhs.
The estimated salary of an Android Developer (passed from a normal college) is 4-8 lakhs.

From the data, it’s clear that depending on the college the candidate has graduated from, the pay scale will differ.

Location -

The location also plays a significant impact on deciding the pay scale. This is the reason salaries in India in comparison to the USA is considerably less.

Even if we take the example of India, the cost of living changes according to the city you are planning to live in.

Numbeo data shows -

Just for example -

The estimated salary for an Android Developer with 0-2 years experience in Bengaluru is 4-8 lakhs.

While the estimated salary for the same criterion in Hyderabad is 3-6 lakhs.

This obvious as the cost of living in Bengaluru is more than that in Hyderabad.

Few Tips -

1.Research the pay scale

It’s impossible to know the ranges of the pay scale for every job position correctly. Researching on the web for different job roles is essential.

But the problem is that the data on the Internet is very scrambled.

This was one of the reasons we launched the AirCTO Salary Calculator. In the past year, we have received a lot of queries from our clients as well as from our readers about “salary estimation.” You can use our Salary Calculator to know the estimation for various tech roles in India with multiple filters.

You can also use GlassDoor and Monster to research about the pay scale for different positions.

2.Determine a Maximum and Minimum

After figuring out the median pay, try to set a minimum and a maximum value of the pay scale.

Adam on Inc advises -

If the potential hire would put you at a disadvantage by working for one of your competitors, he or she is probably worth the maximum salary. If you think you could find another person to fill the position for less, aim more towards the minimum.

3.Negotiation

In the previous article “How to convert Candidates?” we talked about how important it was to have negotiation skills.

Hence even when a candidate is asking for pay scale more than your budget, as a recruiter should try to negotiate before giving up on the candidate.

It is impossible to get a perfect candidate; you’ll have definitely compromise.

Conclusion

Hopefully, after reading the article you'll understand the importance of determining a salary scale.

It's quite essential that you research and spend enough time before mentioning it in the Job Description.

You can use our free Salary Calculator to estimate salaries for different Technical positions - https://aircto.com/salary-calculator