Salary conversations in recruitment can sometimes become strangely arbitrary.
A company decides a role is worth €90,000.
A candidate earning €100,000 decides they need a 15% increase to change jobs.
Suddenly we have two very precise numbers, but neither necessarily tells us what the role or candidate is actually worth.
Ultimately, the market decides.
Where Does Market Value Actually Come From?
There isn’t a formula that says changing companies automatically makes somebody worth 10%, 15% or 20% more.
Equally, an internal salary band doesn’t automatically mean the people a company wants to hire will be available within it.
Market value is influenced by a combination of factors.
Experience matters, but so does how that experience compares with other available candidates. Scarcity matters. Location matters. The complexity of the role matters. The urgency on both sides can matter.
Even two candidates with very similar CVs can have different values to the same organisation because of how closely their experience matches the specific problem that company needs to solve.
This is why salary benchmarking is useful, but it can never tell the whole story.
When the Budget and Requirements Don’t Match
One of the most useful things a recruitment process can reveal is that the original assumptions were wrong.
A company might enter the market with a €90,000 budget and discover that virtually everyone who genuinely meets the requirements is earning €100,000-€120,000.
At that point, repeatedly searching for a €90,000 version of the same person isn’t necessarily going to solve the problem.
Something needs to change.
Perhaps the budget increases. Perhaps some of the requirements become flexible. Perhaps the business hires somebody slightly less experienced and invests in their development.
The important thing is recognising what the market is telling you.
Candidates Have to Be Realistic Too
The same principle applies in the opposite direction.
I regularly hear variations of: “If I’m changing companies, I’d expect at least a 15% increase.”
But why 15%?
Sometimes there is a perfectly reasonable justification. Perhaps somebody is underpaid, their skills have become considerably more valuable, or the new position carries significantly greater responsibility.
But simply moving from Company A to Company B doesn’t automatically increase someone’s market value.
I’ve also seen excellent candidates move for the same salary, or occasionally slightly less, because the opportunity itself was better – better technology, stronger leadership, greater career prospects or a much better work-life balance.
Compensation matters enormously, but it is only one part of a career decision.
The Market Doesn’t Take Sides
Salary negotiations are sometimes presented as a contest between employer and candidate.
I don’t think that’s particularly helpful.
The company wants to hire the strongest person it can within sensible commercial parameters. The candidate understandably wants to receive the best package their experience can command.
Neither side gets to determine market value independently.
The market sits somewhere in the middle.
The best hiring outcomes tend to happen when both sides are willing to listen to what it is telling them – rather than becoming attached to a number simply because that was the number they started with.