22

I've seen a number of job openings that ask for this. The difference between m and n can be substantial.

Why would a company do this?

Is it to get the hopes up of a potential applicant, and then offer something that's still in the range, but lower than the top?

Will they pay more if they find a superstar, and change the position's requirements to give them more responsibilities?

Or do they simply not know what they want?

Surely they already know what the job entails, and how much they're willing to pay for it. If they're presumably accepting the best candidate out of a hundred possible applicants, why wouldn't they always offer n?

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39

Frequently, companies are simply in a position where they're open to people with different skill levels and, as a result of those different skill levels, the salary range is wide.

A team, for example, may have an opening for a widget maker. If a really senior widget maker comes along that checks all of their boxes, they'd be happy to offer a salary at the top end of the range. If a really junior widget maker comes along that is lacking experience but has a great attitude, they'd be happy to offer a salary at the lower end of the range. If a mid-level widget maker comes along that has some of the experience and some of the attitude, they'd be happy to offer a salary in the middle of the range. It's possible that the need is urgent and they'll jump at any qualified applicant that comes in the door. On the other hand, it's possible that the team is somewhat picky and they're expanding their candidate pool to try to find someone that is a good fit.

A team may also have multiple openings that they can fill with a range of people. Perhaps they can afford one senior widget maker and one junior widget maker or they can afford three mid-level widget makers. The hiring manager may have to figure out what mix of applicant skill levels will maximize output without breaking the budget.

Or a team may constantly be hiring for certain positions. If you employ hundreds of widget makers, for example, you probably always have a few openings even if you have relatively low turnover. So you may constantly be looking for a range of skill levels figuring that you can always make room for the right candidate.

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  • 2
    Yes. Saving money is kind of in opposition to hiring the best, so many companies want to achieve what they believe to be a good balance of skill versus saving money. So they might consider both someone they think is promising but less experienced because they'd also save money and someone amazing if they think their skill offsets the money they'd save with a lower salary. – Kai Jan 23 '15 at 17:18
  • @Kai Or they may simply have no amazing applicants and have to settle for someone who is promising, but who will take longer to rise to the level of productivity at which an amazing applicant would be able to work very soon. I'm an embedded systems dev and we run into this when looking for new devs. It's really hard to find someone with all of the skills we need already, though we'd certainly be willing to pay them handsomely should we find them. – reirab Jan 23 '15 at 21:42
  • @kai there are also times the employer is trying to get someone for a specific role that is in short supply. Ideally they want maybe two juniors with a good attitude for the best bang for their buck, but they are prepared to pay for a senior if necessary. – RualStorge Jan 23 '15 at 21:54
14

Why would a company do this?

Because they need someone to fill a spot right now. They don't have time to wait for 2 or 3 years until Mr. Perfect Fit comes around. Maybe Mr. Perfect Fit is available, then they will pay the price. But maybe it's only a runner up that needs training and assistance to do all the assigned tasks, then they will pay less. They will still hire him, because having someone that can do half the job is still better than not having anyone at all. And with time, either Mr. Perfect Fit will arrive or the stand-in will evolve and learn and get better and actually be a perfect fit him or herself.

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  • Ah, I see. So it's about urgency? That's a nice thing to know as an interviewee. – Robert Harvey Jan 23 '15 at 17:00
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    Basically, yes. Maybe not urgent as in can you start on monday but the right fit might be rare and a company does not have years to waste looking for him or her. – nvoigt Jan 23 '15 at 17:01
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    Is anyone ever a perfect fit to some company's laundry list? Companies have been known to ask for five years experience in a technology that's only existed for two. – Robert Harvey Jan 23 '15 at 17:03
  • @RobertHarvey "Perfect" probably was a poor choice of words as no one is "perfect", just sub in "ideal" for perfect. You can (if you're lucky) find an ideal candidate who more than fits your requirements, is self motivating, well spoken, etc. The challenge after you find that person is retaining them, because these are the people that companies will fight tooth and claw to steal away from each other. Finding okay help is easy, good help is hard, great help is like winning the lottery. – RualStorge Jan 23 '15 at 21:59
3

In some cases the company may have a government contract that defines the salary range.

In some US government contracts the government specifies the maximum they will pay the company per hour for a person with a specific skillet and years of experience. The overhead requirements of the company translate how much per hour is paid the the employee. The contract also specifies the maximum profit the company can make so that ends up setting the floor.

For example the government will pay $30 an hour for a mid level widget maker. The company overhead means that $15 is available to the employee as direct pay: the rest go for benefits, overhead and profit. To make sure they don't hire people who are naive enough to accept $10 per hour which would result in an extra $5 in profit for the company, they specify that the lowest pay rate is $12. Thus it will be reported as a pay range of 25K to 31K. It can be even more complex if the are multiple people doing the same job, they can overpay some and underpay others as long as the group falls within those ranges.

For the person applying: if the minimum you will agree to is near the top of the range, you might have a problem next year. The issue is that the top of the range generally only moves with inflation, so the size of your potential raise is also limited. If you are near the bottom of the range and do a great job, they can give you a bigger raise next year.

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  • excellent point abnut applying for jobs where you are at the top of the range. Indeed you might stay at that salary for several years because there is no room for growth in what is budgeted. – HLGEM Jan 23 '15 at 19:00
2

It's all about return on investment.

If a candidate has 10 years' experience in the field, including 2 or 3 in exactly the assignment the company needs done, the company can count on positive output from this employee within 30 days or so, meaning that the contributions of the employee have more economic value to the company the the costs and overhead of his employment, even with the higher salary.

If a candidate has 5 years' experience, including a few months in a role the same or very similar, then they'll probably have to pull 20% or so time from a senior person for a month or so to bring this employee up to a productive level, so you're putting a lot of effort into onboarding them.

If a candidate is a recent graduate, or only a couple years' experience, then there will be a significant amount of time spent bringing them up to speed on a project/technology, and that will pull time from the more senior employees.

A company invests in their employees to develop their skills and productivity. The more investment required in developing an employee, the more it costs there are to bringing that employee onto the team. Thus, they offer lower salaries to candidates who would require more after-hire investment.

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  • Yes. This answer. Some candidates will be much more productive/valuable right out of the gate than others will be. This is the primary reason. – reirab Jan 23 '15 at 21:49
  • @JonStory - I don't know where you're working, but those numbers are awfully high. I didn't say they couldn't be useful, either, but until you've had to manage on-boarding new staff, most people greatly underestimate the amount of time and effort it takes to bring someone up to speed. – Wesley Long Jan 24 '15 at 1:07
1

The company may want to attract the widest range of candidates as possible. Of course they'll get under-qualified people apply for a: Senior-Level with 10+ years experience paying highly competitive salary, but it will weed-out others as well.

I think there are a few factors at play.

  1. A salary range leaves room for negotiation.
  2. Part of the negotiation is based on job salaries in the current market.
  3. The company may know what they want, but may find a completely different set of candidates are applying from what they expected.
  4. They'll use someone's current salary as an excuse/reason not to offer too much more. This has been asked on this site about disclosing salaries.

Unfortunately (for the candidate) he/she may be the most skillful, but not have a lot of job experience. An employer may think they're the best, but since the market/other employers will not pay this person at the top of the salary range, they don't either.

The real reason may be that they don't feel they have anything to lose as long as they stay in the range.

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-4

Companies always want to retain their good talent.

Having a salary range allows them to keep their existing employees happy. If they have an employee with 10 years experience, and they pay him $3/hour, and some kid comes in off the street with 1 years experience, and they pay him $3/hour also, the veteran will be unhappy, and soon start looking for a new employer.

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