The term market rate has become such a natural part of our vocabulary that many Founders and leaders believe such a thing actually exists. Today, I'm here to tell you it doesn’t… at least not in today's war for talent.
What is Market Rate Anyway?
Wikipedia describes market rate as the price charged for items in a free market. If demand goes up, manufacturers will tend to respond by increasing the price, thus setting a higher market rate.
So in a nutshell, it’s the price of a thing at any given time and the person who provides the thing will determine the price based on supply and demand.
But when it comes to market rates for hiring, things start to get more complicated.
Firstly, the thing in this instance is living. A living breathing human, who has opinions, insecurities, financial obligations, debts, retirement goals, dreams for a lifestyle that exceed their current means, and the ability to say no.
Secondly, no two Product Managers are created equal. Product Managers enter the role with backgrounds from engineering, marketing, customer success, or even sales. Product Managers are also highly nuanced with many varieties of specialization: API/Integration, Discovery and New Product Introduction (NPI), backend, platform, native mobile apps, or growth PMs.
Many leaders today don't place value on the number of years of experience someone has as a determining factor for compensation, choosing to instead focus on a candidate's outcomes. All of this adds complication and a well it depends element to what a candidate earns or could earn in today's market.
Lastly, the person who represents the human is a partner. Unlike the Wikipedia example of market rate for a static thing, no one person or organization can determine the worth of a candidate.
The person who sources, engages, recruits and represents the human, or in this case candidate, for an employment opportunity does so in partnership with them to achieve the best possible outcome for all parties. Salary discussions and negotiations are a trusted partnership between the recruiter, employer, and candidate.
Having been in business for over 20 years, we are in the fortunate position of being subject matter experts in recruiting North American product management talent. This experience provides us with current market knowledge which helps our clients make decisions about the experiences they will (or won't) be able to attract based on the budgets they have allocated to a new hire.
It's important to note that compensation is just one part of a candidate's decision whether they accept or decline an offer. Salary is just one piece of the hiring puzzle. If you’re looking for more ways to strengthen your offers of employment, stay tuned for next week when we discuss the 5 reasons why Product Managers say hell yes and accept offers!