The same job title doesn't always mean the same salary

When it comes to recruitment, employee retention, and personal career growth, salaries are naturally front of mind. In recent years, there’s been a significant rise in salaries within the legal and professional services industry, influenced by the post-pandemic war for talent and growth of some of the US firm.

When it comes to salary benchmarking, it can be challenging for employers to keep up with the market; quite often, salary benchmark data from large research providers will be out of date by the time it hits the market.

Mismanagement of salary has led to the failure of many recruitment processes, resulting in significant costs for employers. Many hiring managers continue to focus on an individual’s current salary, using salary uplift as a marker for determining pay, rather than considering the true value of the role and the individual's capabilities.

With increasing pressure on firms to be transparent about salaries when advertising roles, could changes in the UK law mean that one day it could be illegal to ask for an individual’s current salary, as is currently the case in several US states?

With the above points in mind, here are some considerations for both employers and job seekers regarding salaries in legal and professional services:

Do your research

It’s important to carry out thorough research on salaries before going to market for a hire. Relying on outdated data from six months ago means your salary bandings won’t be accurate. There have been numerous instances where firms have offered the wrong salary while hiring, only to then have to reevaluate and restart the recruitment process.

Not only does this waste a lot of time and money, it also diminishes the value of the role and the firm’s reputation in the market, creating a perception your firm doesn’t understand the value of certain roles.

A quick call to a reputable recruiter will enable you to quickly find out the salaries your competitors are paying to secure talent. While you may not always be able to adjust salary bandings, conducting research from the outset can help you make informed decisions before starting the hiring process.

You can adjust your requirements accordingly and agree, before going to market, on the profile of the candidate you are seeking, such as someone from a different background or stepping up, as an example.

The same job title doesn’t always mean the same salary

As part of your research, you will discover salaries vary between firms. For example, a BD Manager for a UK private client firm may earn £20-£50K less than their counterpart at a corporate role for a US-headquartered international firm. While the roles and responsibilities may appear similar, the demands on these two individuals will be different, and the firms will also be generating significantly different types of revenue.

It's important for job seekers not to be misled into believing your salary should be significantly higher. For employers, it’s important you understand the market dynamics, as they will ensure you understand where it will be more feasible to attract talent from.

Be as transparent as possible on salaries and advertise them

If you want people to apply to your jobs, then you need to be transparent about salaries. Studies show that people are more inclined to apply for a job when they know the salary upfront. It also saves time for everyone involved by avoiding entering processes that are not suitable.

The job market is small, and salary data is widely available, so your current employees will eventually find out anyway.

“Mismanagement of salary has led to the failure of many recruitment processes, resulting in significant costs for employers. Many hiring managers continue to focus on an individual’s current salary, using salary uplift as a marker for determining pay, rather than considering the true value of the role and the individual's capabilities.

Understanding where you sit on a salary banding

Typically, most roles will come to market with a salary banding. We know one of the biggest frustrations for hiring managers is when candidates demand the highest salary in the banding or when recruiters only submit candidates at the top end of the budget.

A good process should consider talent across the salary banding, and clearly define the experience or competencies required for different salary levels within the banding.

Similarly, job seekers should understand being successful in a hiring process does not necessarily guarantee an offer at the top end of the firm’s salary banding.

Managing salary expectations throughout the process

During the hiring process, candidates’ expectations may shift - their personal circumstances and requirements in their job process can change for a multitude of reasons. Similarly, an employer’s perception of a candidate and what they are “worth” from a salary perspective may alter through the process.

It’s important for all parties to maintain continuous open and transparent communication throughout the process. You should avoid, at all costs, going through an entire process with someone only for it to fall apart at the last hurdle due to misalignment on salary expectations.

Don’t decide what you pay someone based on their last drawn salary

An individual’s current or previous drawn salary should provide little to no bearing in determining their salary offer. Someone may well be underpaid in their current role or be in a very different role to the one for which they’re interviewing.

Unfortunately, we’ve seen several firms offer candidates a lower salary than expected just because the offer is viewed by the employer as a significant uplift from the candidate’s current salary. As an employer, you may feel you want to offer a lower salary to a candidate, but this needs to be justified against their existing experiences, competencies, and capabilities relative to the role, and how they are benchmarked against others in the firm.

On the other side of the coin, as a job seeker, it is important to understand a large salary now or a large increase in the past does not necessarily mean future salary increases will be as significant or with the same percentage increments. We saw several individuals receive very large increments over the last two years, with some now pricing themselves out of today’s market.

Make sure your current employees are being paid appropriately

The best practices mentioned above also apply to your current employees. Given the rapid changes in salary bandings in today’s market, current salaries need to be regularly reviewed.

If you don’t align salaries of current team members before going to market with a new role, you risk creating resentment within your teams, which can lead to retention problems. (Not advertising salaries won’t prevent this!)

It is crucial to provide clarity around why pay is set at a certain level and what factors might lead to someone being on a higher or lower salary level within the same grade role. Don’t wait until employees resign to offer more money. It is well-documented that counteroffers don’t work and, in most cases, the person will still leave in the short to midterm.

Pay isn’t everything!

Despite everything discussed above, and while offering competitive salaries is important, firms should also ensure they can clearly articulate their USPs as a firm and for the role. The firms that are better at selling their culture and career progression tend to attract more talent. In doing so, you avoid entering a straight shootout on salaries for talent.

Similarly, for job seekers, it’s important you weigh up all aspects of a job opportunity and are clear about your motivations for a job move, outside of just the salary, if you really want to make the best decision for your career growth, earning potential, and overall satisfaction.

This article was originally published in Centrum by Matthew Gardner. Link to the full article: Insights - Ambition - Centrum Winter 2024-25