We will try to answer this question for both freelance testers and testers employed by the company. The post is based on a remarkable book written by Chad Fowler, The Passionate Programmer.
The basic principle of the employer/employee relationship is that the employer wants the employee to work as much as possible for the agreed salary, and the employee wants to work as less as possible. I learned that on the business course before I opened Tentamen. The goal is to his sweet spot, where both parties are satisfied. This requires negotiation skills.
Let say that you work for the company as a software tester. You think of yourself all the best, and you expect by default a salary raise every year. Let’s put your salary into the company profit equation. How much do you cost your company? You have:
Let’s say that the total amount is double your year salary, and that is equal to 120 000 us$.
Ask yourself, does your work create for your company 120 000 us$? How to calculate that? Let’s take the most straightforward calculation, your company year total revenue divided by the number of employees. Is your double salary higher or less than this figure? And this is just for the company to be break even! Remember, the company must have a profit.
If you know your department revenue (remember that you can always ask that question to your boss), use that figure, and you will have a more accurate result.
Remember this next time when you are negotiating your salary raise.
Originally published at https://blog.tentamen.eu on November 5, 2019.