What Does Competitive Salary Mean?

Mar 2, 2022

In a job advert, you may have come across the phrase ‘competitive pay’, also commonly referred to as ‘competitive salary’. This phrase is usually used as an alternative to a company or recruiter listing the specific salary that is being offered. If you would like to receive fair compensation for your work and level of experience, it is essential that you understand what is meant by ‘competitive pay’ and what constitutes competitive pay. But what does this actually mean?

In this article, we will look at what competitive pay means, how employers use the phrase and how you should approach negotiating your initial salary.

What does competitive pay mean?

When businesses state that they will offer competitive pay or salary, this simply means that they will offer a salary amount that is equal to or slightly higher than the industry average for similar positions in the same location. For example, if the average salary for a job is £28,000 per annum, a competitive salary is one that is around this amount or slightly higher. To learn what this amount could be, you will have to carry out some research although some figures may only be estimates.

However, competitive pay does not only refer to the monetary value offered, but also includes benefits which may include any of the following:

  • Annual paid leave
  • Sign-on bonuses
  • Gym membership
  • Health insurance
  • Season tickets
  • Wellness programs

Why do employers use the phrase competitive pay?

Employers use the phrase ‘competitive pay’ rather than specifying an amount for a diversity of reasons. One reason is that ‘competitive pay’ leaves room for negotiation. This is because businesses usually negotiate a salary depending on the candidate’s experience and skill set. However, if a company lists an actual numerical amount, the company must adhere to the salary offerings advertised.

Another reason why employers refer to the salary as ‘competitive’ is because some businesses have confidentiality policies around salaries. If company policy prevents discussions about pay, advertising the salary as competitive means that the exact pay for the role remains private. Also, for roles with high salaries, the term ‘competitive’ helps employers target those candidates who are genuinely interested in the role rather than those who are merely looking for a higher income.

How is competitive pay calculated?

Competitive pay is determined by the following factors:

  • The role you are applying for
  • Your experience
  • The industry
  • The region

It may be helpful to have a figure in mind before speaking to future employers. However, if you are not sure what that figure should resemble, use a salary checker.

Can I ask for more information about competitive pay?

You probably will have some more specific questions to ask your potential employer about competitive pay. Ideally, the interviewer or HR department will initiate this discussion; however, in the odd situation where the interview does not discuss salary, do not be afraid to ask questions. However, be mindful that asking questions early on about salary may not give the best first impression.

Rather, it would be more appropriate to ask questions about pay later on in the application process. For example, it is more acceptable for you to ask questions about salary at the end of a second or third interview. Also, use your instincts. Gauge the overall tone of the interview and the interviewer’s mood. If the interview is relatively informal, this may be a good time to ask salary-related questions.

What if the competitive pay is not enough?

Although a salary may be listed as competitive, it may still not meet your expectations. Even after all your research, your potential employer may not adhere to industry standards. If you are offered an amount that is less than expected that does not mean you have to walk away from the opportunity. Instead, do not be afraid to negotiate a little and explain your expectations.

In fact, as the salary has been listed as ‘competitive’, many employers will allow some room for negotiation. In particular, employers are more likely to be flexible about salary in regard to the right candidate. However, you must be reasonable in your expectations and find the right time to negotiate.


Searching and applying for jobs is challenging. On top of this, there can be several ambiguities in job adverts such as the phrase ‘competitive pay’. After reading this article, you should have a better understanding of what is meant by competitive pay and its inner workings. You should also be confident in asking future employers questions about competitive pay and negotiating the current offering.

Written by Nina Chatrath

Featured photo by Breakingpic from Pexels

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