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Blogs / Knowledge Network Community Blog / Tipping the Pay Scale: How to Determine Leadership Salaries

Tipping the Pay Scale: How to Determine Leadership Salaries

Perhaps nothing determines the success of an organization more than the leaders at its helm. Leadership teams of any organization, from local governments to  bootstrapped startups and Fortune 500 corporations, set the tone and guide organizations through each iteration of their lifecycles. Nabbing the right marketing lead or technology officer from the job market could be the factor that makes or breaks an organization in the long run. And although the right leaders might look to join an organization because they align with its values or believe in its product and mission, compensation for these high-level employees will always (inevitably) be a factor in the hiring process.


Unlike newly graduated employees who are seeking experience as much as a comfortable salary and willing to take on internships; candidates up for company leadership positions typically are not at the beginning of their careers. Rather, they bring a wealth of experience from the positions they’ve taken on over the years; as they’ve climbed the ladder at other organizations, their salaries, and salary expectations most likely have also risen. Unlike many other companies and organizations that can work around high salary demands with equity offers, local government organizations do not have that luxury. Additionally, organizations must adhere to local government scales and standards, which does not leave a lot of bargaining room. But government organizations may be at an advantage; public employee salaries are available to the public (or at least general estimates of them) which offers organizations a degree of transparency as a starting ground. When potential leaders begin recruitment talks, they more or less know an estimate of what they will be making if they choose to take the position. If a treasury candidate is coming from the world of corporate finance, they will already have an idea that their new public position won’t be able to match the salary of a previous employer. Although these organizations have transparency working for them, there are still a few things to take into consideration when it comes to determining which end of the payment scale the offer will fall on:


Current Financial State


Your organization’s current financial state may be the largest determinant of an offering. You cannot make compensation promises that you cannot expect to keep. Understanding how much you currently have, and the ways in which your treasury is projected to grow in the coming months and years is the first step to determining a compensation strategy. You cannot spend an entire annual budget on hiring, so mapping out your budget starting point, needs, and the overall outlook for the year ahead will enable you to adequately assess payscale.


Cost of Living


If you’re recruiting leadership from out of state, or at least out of the area, it’s essential to understand how your area’s average cost of living might impact their salary expectations. For example, there is a vast difference between living in New York City and Cleveland. High-level employee candidates will want assurance that spikes in housing costs, transportation, and city taxes will not derail their standards of living. If the potential high-level candidate is pursuing the position from out of the area, they may require a relocation incentive to supplement the high cost or moving and the adjustment to a new cost of living.




Does your organization offer a comprehensive suite of employee benefits including medical, retirement, vacation, paid leave, and transportation? If your offering falls short in any of these areas it may mean that you’ll have to compensate with a higher base salary. Senior-level employees come to the table with benefit expectations, and anything that falls short may be enough to convince them not to join your organization. One of the reasons many people go into (and stay in) government-run agencies and organizations is for the strong focus on pension. Articulating the value that the position offers, beyond the base salary, is a tool organizational leaders must use when they are trying to lure top-tier talent.


Most high-level employees within government organizations are not necessarily pursuing this line of work for the money. If they truly are strong leaders, they’ll already know that they could receive much more for their talent and expertise in the for-profit space. Most of these candidates are interested in joining local organizations for the potential to make an impact on an entire community, as well as the chance to feel personal fulfillment from their work. Highlighting these aspects of working in local governance can help candidates remember why they were interested in the position in the first place.