How much am I worth – and how do I know this?

A boss of mine awhile ago used to say “Bargain hard at the beginning [for your salary] and then I don’t want to hear from you again.”

 

But one of the difficulties new professionals have is finding out what their target rate (annual salary, daily rate) should be so you can do that negotating. So here are some ways to try to gather more information.

 

There is something called the 260 rule that some US government agencies use to calculate someone’s daily rate. It gives you a good rule of thumb. The 260 rule says – take your annual salary and divide it by 260 days and that will give you your daily rate. So, if you’re employed and wanting to consult (which means you now have expenses such as health insurance), you can try to adjust your daily rate upwards to cover these additional costs of being an independent consultant. (Note that, even though you have these additional costs to bear, not all US agencies’ contracting officers will allow you this increase.)

 

If you are an independent consultant and are being offered employment in a company, companies’ salary scales may place you lower than you might expect – and sometimes considerably less than your daily rate would be. Why would this be, you wonder? It is often because employer benefits are generally thought to be worth about $10,000 so that is “added” to your salary when the hiring manager and HR look at the consultant rate you’ve been making and compare it with the grade level and salary range for the job.

 

Job postings (except for the federal government) generally don’t include a salary range for the position (because employers need and want the flexibility to negotiate salary depending on your salary history). And no one is comfortable sharing an exact salary number even with a best friend. You can, however, ask a mentor, professor, or senior colleague if they are comfortable giving you a salary range for a certain type of position. Benchmarking positions in a range at least will give you some idea of what the position should be paying.

 

But remember – just like airline seats, someone you think is doing equivalent work to you may be making more than you – and someone else may be making less.

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