Factors Affecting Your Pay
Education and experience can go a long way to determining the premium that will affect your pay.
Alternatively you might be able to earn more by doing the same job in a larger company or in a location that ascribes to a high cost of living (HCOL) area.
What determines your pay.
Employers typically determine your pay by mapping roles and jobs descriptions with those from similar companies, adjusting the result to their specific market data and then considering the employees background & experience.
Often companies have their own compensation outlook regarding how they want to position themselves in the market with regards to pay, the companies they consider competitors and the talent it considers important hence the variances one sees with pay from one company to another for similar positions.
Factors that can affect your pay.
⦿ Education: The correlation between your education, the quality of that education and what's normally required for your job usually affects your pay. Earning a degree from a top university typically has a positive influence on pay, while earning a degree from a school that's considered weak may decrease your earning potential. Being a secondary school certificate, OND, HND, Degree, Masters, PhD holder can each attribute certain monetary uplifts to your remuneration.
⦿ Years of Experience: Generally speaking, the more experience an employee has results in higher pay. Similarly, if the position calls for someone with, for example, 5 years of experience in a particular field, and you don't meet those requirements, you may find yourself on the lower end of the pay scale.
⦿ Performance Reviews: Individual performance is an important component when being considered for a pay increase or promotion. One of the reasons employers like to see promotions or progression into roles with greater responsibility in a candidates application is it gives a more complete indication of your abilities.
⦿ Employees You Manage: The more employees you manage it follows the higher your pay in most situations. Bear in mind that your level of success will also be dependent on the performance of the employees you manage.
⦿ Working Unpopular Hours: If you work shifts that are unpopular you may have an uplift included in your pay compared to normal working shifts e.g. night shift vs day shift; weekend shift vs weekday shift.
⦿ Hazardous Work Place: If you work, for example, in an offshore oil rig or in conflict zones it is normal for your pay to have some monetary uplift due to the working environment. It's a known fact that during COVID-19 some health workers were given or requested additional uplifts to their pay.
⦿ Professional Certifications: Certifications and memberships in professional bodies can positively impact your pay. Sometimes, if a job calls for a certification you don't have your pay might be set at the lower end of the ladder and in some instances employers require employees without certifications to work towards them if successfully recruited into their company.
⦿ Location: Job location can affect your pay, for instance, if the job is located in a HCOL area like Abuja (FCT), Lagos, Port Harcourt, Warri, Kaduna, Asaba to name but a few. Some companies may add monetary uplifts to your pay because of the HCOL characteristics of the location.
⦿ Industry or Vertical: The industry or vertical you work in can also affect your pay e.g. public sector vs private sector, banking vs retail or health care vs hospitality.
⦿ Specialisation: The focus of your knowledge and talent can also impact your pay e.g. Engineering, Information Technology, Law, Management, Finance, Accountancy, Medicine.
⦿ Profession or Role: Certain professions or roles command top pay. Historical examples of professions that fall into this category include engineers, investment banking, management consultants, doctors. Nowadays people working in tech are commanding very competitive pay e.g. Product Managers, Software Developers, DevOps Engineers, Cybersecurity Engineers, Engineering Managers, Programme Managers.
⦿ Employer Prestige: It is not unheard of for your pay to be at a premium if, for example, you work in one of the top 4 Audit, Consulting, Technology, Oil, Manufacturing, Energy, Banking & Investment companies. Companies in this position tend to recruit and pay above average due to their standing in their sector, competition with their peers and the revenue they pull in amongst others.
⦿ Environment: This relates to things such as the economic, political and other associated interrelated factors that can impact a geographical locations ability to be a high, medium or low growth rate supporting and enabling environment for public and private enterprise to flourish.
What does all this mean.
The important thing to take away from here is that our wages has a lot of determinants that impact it.
Whilst we may want to earn more one also has to have an idea of the determining factors affecting their earning potential. Knowing this can provide the pathway to going from a low wage to a higher wage.