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Eight Smart Techniques For Calculating A Prospective Employee's Worth

Forbes Human Resources Council
POST WRITTEN BY
Expert Panel, Forbes Human Resources Council

Currently, the most effective method of determining a potential employee's worth is looking at their salary history. While that works relatively well, legislation is becoming increasingly harsh about employers using a candidate's compensation history to gauge their value to the company.

As a result, HR teams and interviewers need to find alternative metrics to use for calculating the value a potential hire brings to the table. Even if the employee's past salary information is available, this offers business more depth into their hiring process.

Here, eight experts from Forbes Human Resources Council examine the techniques that worked in their companies for gauging the future value of an employee depending on the role they will take, their past experience and their overall skills.

Photos courtesy of the individual members

1. Align Pay To The Competitive Marketplace

Market pricing provides decision support about the “how” and “how much” for a prospective employee. The goal is to not underpay and lose talent to competitors, or to be unable to attract top talent. You also don't want to overpay, wasting resources or impeding desirable turnover. Understand the influences of supply and demand, speed of competitive shifts, etc. It is both an art and a science. - MJ Vigil, PEMCO Insurance

2. Benchmark The Salary For The Role And Level

Taking a benchmark from candidates, recruiters or HR firms gives you an understanding of the market value for this position. Then think about what you pay others for a role at that level. Crucially, consider what value they add to the business, either in revenue or in savings. Once you have that understanding, you should be able to come up with an attractive salary that is right for the business. - Karla Reffold, BeecherMadden

3. Ask About Soft Skills

Ask about their soft skills and how they feel they would add value to your team. I like to ask about a difficult problem they had in the past where they proposed a creative solution that worked to resolve the issue. Unexpected setbacks, dramas and delays occur all the time. Having someone on the team that can address an issue in a new way and resolve it is something you can't put a price on. - Regina W. Romeo, CPS HR Consulting

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4. Determine The Value Of Their Personal Brand

One way to assess the worth of your potential employees is to get a feel for their personal brands. Google your candidates' names and check out their social media presence. Do they have a large following? Are they engaged with the industry? Do they supply insightful commentary? Their online presence and engagement can also show how they may represent your brand, should you hire them. - Greg Furstner, SkillPath

5. Look At Past Work Experience

Look to their past work experiences to determine the appropriate salary range. If the candidate has demonstrated the desired skills and abilities in their previous positions, this will help a potential employer gauge correct value. Asking in-depth questions and having the candidate provide detailed examples during the interview process, will help the potential employer determine candidate value. - Debi Bliazis, Champions School of Real Estate

6. Determine Value Versus Worth

Determining a new hire’s “worth” may be a guided process based on education, experience and a market competitive offer. The real work in an offer is to determine a new hire’s immediate and long-term "value" to the organization. The quality and range of a candidate’s experience should weigh more than the number of years, along with an assessment of the impact they made in previous organizations. - Ekta Vyas, Ph.D, Stanford Children's Health

7. Measure Worth Based On Impact

Identify the roles that deliver high-impact value to the organization and adapt your rewards strategy and compensation plans to pay above market based on their worth to your organization. Allow for flexibility for high-worth positions by increasing the upside using incentives as a lever. - Keri Higgins Bigelow, LivingHR, Inc.

8. Be Honest And Ask About Their Expectations

It's simple, really -- be honest. Here's how I do that with my candidates: "Let's discuss salary next because that is always important, right? This position starts out at $50,000 annually and goes up from there based on experience. What are your salary expectations?" If you ask a candidate what they make, they will overshoot the role or themselves in the foot. You play your cards, they'll play theirs! - Adam Mellor, ONE Gas, Inc.