Banding/Experience Level Calibration
Every company has their own way of defining experience levels. For example, some companies may consider a JR level to represent 0–1 year’s of experience while another company may consider a JR level to have 1–3 year’s of experience. These same types of differences are present throughout all experience levels.
The challenge for nextSource was how do we find one process that works that may be applied to the job/applicant market that has no banding definition at all? Through our research, it became very obvious and logical that, regardless of how a company defines experience level banding, one pattern emerges: the lower the experience level, the lower the rate or salary and the higher the experience level, the higher the rate or salary. This is the basic premise that allows us to examine and categorize the unbanded marketplace. Using the following methodology it is possible to define experience level banding against the un-banded marketplace and satisfy the demands of all companies regardless of the experience levels that they may use.
Our research also confirmed that a natural segmentation occurs among the experience years and related rate or salary that we have been able to capture in our methodology for experience banding. Identifying the rate and salary limits associated with this segmentation is the exercise of the banding utilized within The People Ticker. The People Ticker incorporates default assumptions about the unbanded job/applicant marketplace based on this segmentation. For example, the segmentation assumptions reflect that the pay rates falling in the lowest 25% of the reported pay rates are representative of pay rates for a JR experience level while the top 10% of the pay rates (between 90% and 100% of pay rates reported) are representative of the GURU experience level. In its segmentation assumptions, The People Ticker uses a total of four experience levels. The corresponding banding ranges applicable to each experience level are defined below:
- JR
- 0%–25% of Pay Rates Reported
- MID
- 25%–50% of Pay Rates Reported
- SR
- 50%–90% of Pay Rates Reported
- GURU/Expert
- 90%–100% of Pay Rates Reported
Experience Level banding in the marketplace is defined as a function of Pay Rate Range (not Bill Rate, see why in the next section). Professionals who have been defined as “SR” by companies will fall to the higher end of the banding scale than professionals companies have defined as “JR” which will fall to the lower end of the banding scale.
As stated earlier, nextSource has decided to default to four experience levels within The People Ticker. In our experience, we noticed that a certain, limited segment of the population at the high end makes substantially higher rates and salaries than others. Before we added the GURU/Expert band, the average rates and rate ranges for SR level were skewed too high. By segmenting the data for a 4th level, GURU/Expert, the rate information for the SR level was more accurate. This is not a consideration for lower levels as the minimum wage provides a lower limit.
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