Mclaren Consultancy

10 years down the road

 

Recently we have met with a candidate and learnt her story.

 

“I just met her last night in our bachelor schoolmate gathering dinner.” I can tell our candidate is not feeling good on “her”.

 

“I am just feeling sick of her showing off her newly bought brand new 300-square-feet apartment in Mid-Level.” She paused, sighed, and continued, “And she offered to drive me home with her Porsche 718 Cayman!”

 

“She used to be my BFF.” Well, then I completely understand where the frustration comes from.

 

“We know each either since childhood. We were raised in the same community, went to same schools, studied the same major and worked on the same internship. And I am always a winner. ”

 

“We started our own life since graduation. 10 years down the road, and now what? And why?”

 

 This is a very good question. What determines your pay cheque?

 

Our candidate is not feeling good because she has taken it personally. She is a strong believer in which salary is an exact equivalence to her own capability.

 

 

Who and what decide your salary?

 

Are you compassionate toward our candidate? Do you think that she deserves better? Don’t rush to get the answer.

 

At the first glance, people will directly link ability and qualification with the salary that they get. Yes, your knowledge and skills are definitely your asset. It is seemingly fair to be rewarded for the extra value. But in the real world, what determines your salary is beyond these.

 

Other factors are equivalently important in determining your salary and how far you can go. When choosing your career, you must keep an eye on these factors either.

 

1.       Industry

Picking a right job in a right industry is the key. For the same position, say, graduate trainee, the salary differ greatly among industries. The salary for them in the financial industry may double that from the manufacturing. Also, the prospect of the industry should be considered. There are sunrise industries such as technological and alternative energy as well as sunset industries such as publication and textile. Choosing the growing industry is wise that you can benefit in terms of bonus, salary growth, mobility etc. In short, industry determine how far and how fast your salary can grow.

 

2.       Position

A position that is important and crucial for the company would be rewarded more. For example, a programmer generally has higher value than operator. Because a programmer can create more value for the company with their professional skills and knowledge. Generally, the position that requires more prerequisite and experience are worth more to the company.

 

3.       Company

Many people complain their company being too stagnant and miserly. Everything priced up but never their salary. Therefore, it is a serious consideration for candidates to pick a good company. Culture and value, size of business, product, market share, growth are some but not all factors that you should pay attention to. In most of the case, the more sizable and profitable, the higher the salary. But of course, it also subjects to whether it is generous or not.

 

4.       Demand & supply in your talent

This is the factor that deserves more discussion. It is a dynamic topic as the demand and supply of talents in the market is ever-changing. It is commonly understood as more people want a particular thing and the supply is fixed temporarily, that thing will rise in price. It is just the same in the job market. From a survey asking what job function will employers hire in the coming 3 months, the top of the list include IT, sales and business development. However, not many people study IT in HK. Because of the scarcity in talent, which requires solid and specialized knowledge and skills, they are difficult to be substituted. The cost of replacing them are higher and therefore a premium in salary is given to attract and retain them.

 

 

Important factors that determine your salary more than your own capability

 

“It is our choices, Harry, that show what we truly are, far more than our abilities.” ― J.K. Rowling, Harry Potter and the Chamber of Secrets. This statement is applicable when it comes to determining your salary either. There are more factors that determine your salary more than your capability.

 

1.       Industry

If the industry is shrinking, your company will probably suffer from the stagnant growth or unprofitability. There are no room for you to fight for a salary increment when the company cannot even support itself. On the other hand, when the industry is in robust growth, say, with the support of the government policy, you may not even need to ask before your salary rises.

 

2.       Position

You cannot control the industry, but you can control your value created. Even if you are in a routine support role that can be easily substituted, you can find ways to maximize your value. Being observant and taking the initiative to change help you to demonstrate that you are more capable than your company expect. When you can create extra value, you deserve a salary increase.

 

3.       Company

Always stay alert to your company situation. It is more likely for you to have a salary increase when you are in a growing or mature company. These healthy company usually have a clear compensation and promotion policy. In contrast, for startups, reforming or decaying firms, they are less profitable and riskier. Working in these firms, you may need to observe the situation closely and look for other opportunities once it is unfavorable. Also, understanding the promotion ladder helps you to foresee how far you can go. If the mobility is so low that you need to wait 10 years to get promoted and get only a single-digit percentage salary growth each year, it’s time for you to find another company.

 

4.       Demand & supply

You can’t adjust the demand and supply in market, but you can predict and follow the trend. For example, if you can foresee the growing trend in artificial intelligence, cloud computing, data analytics etc., you may learn related skills now and prepare for the future transformation into a new industry, company or position. Learning lifelong is important to differentiate yourself and prevent for being substituted. Remember, fortune favors the well prepared.

 

Career is our longest planning in life, so, do take every factor seriously. Don’t let your ability being hinder by other factors!