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Thursday, May 23, 2013

What's Your Worth? 3 Factors That Dictates What You Earn

Once and for all, let’s handle this issue of salaries. What determines the salary you get? Why are some professions poorly paying? And lastly, what can you do to perk up your pay?

As a fact job pay for any particular job isn't constant. Several factors control what you earn. These factors range from:

1. Demand and Supply: In Kenya, for instance, there is a tendency of students to go for popular courses regardless of whether or not one is gifted. That’s why CPA, MBA's, Bcom, IT and Law courses are favourites among learners in Kenya. Many register for the course without any idea of where they want to be or whom they want to become after graduation. With many graduates graduating with these courses, the market is flooded and employers are spoilt for choice.
That explains why your average bank teller is a graduate in addition to having other professional qualifications. That’s why an employer in a far remote area is confident of getting an accountant at a pay of Ksh. 15K.We simply have tens of thousands of skilled professionals chasing very few jobs. Time has come for young people to evaluate their interest in a particular career and not just go with the most popular.

2. Special Skills: Skills in small supply may merit a bargain for premium pay. If you’re a lawyer competent in a given area where there is low competition, e.g. international law, then you call the shorts when negotiating for salary. Sometime back, there was a serious shortage of telecommunication engineers in Kenya that Safaricom always had an advertisement inviting applicants from Kenyans in the Diaspora and having a Telecommunication engineering background. Such engineers ended up getting very good pay some to extent of Ksh. 600k net.

2. Salary Compression: Concerns that a revolt among current employees may ensue from paying you a higher salary can cause a company to stick strictly to a certain salary. If the highest paid in that department takes home a certain figure and you are joining at a grade lower, then the assumption is that however good you are the company will stick to their salary structure.

3. Large Versus Small Companies. Although large companies normally pay more, smaller companies without a formal salary structures are easier to bargain with than corporate titans. With smaller firms it easier for the bosses to recognize your effort and hard work and remunerate you accordingly, unlike the big companies where you are just part of the system. Assume you work for Apple customer care. There is a set salary bracket for that department and no matter how smart you are or how best you deliver chances are you’re probably going to remain within the salary scale. But even at giant companies where pay scales are cast on stone, your potential boss may have the liberty to cut you a better deal.

What are your thoughts?

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