Why Compensation Analysis Belongs at the Beginning, Not the End
Most hiring leaders think about compensation at the offer stage. By that point, they have invested months in the search, identified a strong candidate, and are now trying to put together a package that works. If the compensation range turns out to be misaligned with market reality, that discovery comes at the worst possible moment: when both sides have made a significant emotional and logistical investment in the outcome.
The better approach is to complete a thorough compensation analysis before the search begins. This gives you a realistic picture of what the market pays for the profile you need, allows you to structure the role and budget appropriately, and prevents the most avoidable failure mode in executive hiring: losing the right candidate because the offer was not competitive.
Step 1: Define the Role Precisely Before You Research Comp
Compensation data is only useful if it matches the actual role you are filling. A “VP of Facilities” at a 2-million-square-foot urban research university with a $300 million capital program is a fundamentally different role from a “VP of Facilities” at a 500,000-square-foot suburban office campus. The titles may be identical, but the market compensation for those roles is not.
Before you pull any compensation data, write a one-paragraph description of the role that includes: portfolio size, capital program scope, reporting structure, team size, geographic complexity, and the single most important outcome the hire is responsible for in their first 24 months. That description is what you benchmark, not the title alone.
Step 2: Identify the Right Comparison Set
Compensation for construction, facilities, and real estate executive roles varies significantly by sector, geography, organization size, and employer type. The data you need is not generic real estate or facilities compensation data. It is sector-specific and role-specific data drawn from organizations comparable to yours.
For institutional roles, the comparison set should include peer institutions of similar size, capital budget, and portfolio complexity. For construction and real estate firm roles, the comparison set should be firms of similar revenue, project type, and geographic footprint. Pulling national median compensation data without filtering by these dimensions will consistently underestimate what it takes to attract the candidates you want.
Step 3: Separate Base, Bonus, and Total Compensation
When benchmarking compensation, track three numbers separately: base salary, target annual bonus or incentive, and total target compensation. These three figures tell different stories and matter in different ways depending on the candidate and the organization.
For many senior candidates in construction and facilities, the base salary is the number they use to evaluate an offer relative to their current situation. Bonus upside may be attractive but is discounted because it is not guaranteed. For candidates at private equity or REIT platforms, carried interest and co-investment opportunity may be more important than base. Understanding which lever matters most for the profile you are targeting allows you to structure the package accordingly.
Step 4: Apply Geography Adjustments
Compensation for VP of Facilities, Director of Construction, and equivalent roles varies meaningfully by geography. New York Metro, Boston, San Francisco, and Los Angeles command premiums of 20 to 35 percent above national median for comparable roles. Chicago, Philadelphia, Washington D.C., and Miami sit in a middle tier. Secondary and tertiary markets typically track closer to national medians but may still require premiums to attract candidates from larger markets.
If your organization is based outside a major metro and you are recruiting from those markets, you need to account for the fact that a strong candidate relocating from New York to a mid-sized Midwestern city will typically not accept a significant reduction in base compensation just because the local market pays less. Relocation and cost-of-living adjustments are often negotiating points, but the base salary conversation has to start at a number the candidate finds credible.
Step 5: Check Your Internal Equity
Before finalizing your compensation range, compare the proposed package to the existing leadership team the new hire will join or manage. If you are recruiting a VP of Facilities at a compensation level that is close to or below what a Director of Facilities on their team currently earns, you have a structural problem that will surface during the offer conversation or, worse, after the hire has joined.
Internal equity issues are common in organizations that have not been actively hiring at the senior level. When a longtime employee in a Director-level role has received modest annual increases over time, their current compensation may be significantly below market, and a new VP hire may need to earn substantially more. That gap needs to be addressed explicitly, either by adjusting the incumbent’s compensation or by being prepared to explain the difference transparently.
Step 6: Build a Range, Not a Single Number
Your compensation analysis should produce a range with a minimum, a midpoint, and a maximum. The minimum should represent a credible offer for a strong candidate who is fully qualified but may have slightly less tenure or scope than the ideal. The maximum should represent what you are willing to pay for an exceptional candidate who exceeds the profile in meaningful ways.
Going to market with a single number rather than a range creates unnecessary rigidity. Strong candidates who are currently compensated near your maximum will not pursue a role where the advertised compensation feels like a ceiling. And offering below your midpoint to a highly qualified candidate signals that you are either undervaluing the role or do not understand the market.
Step 7: Pressure-Test the Range With a Search Partner
Once you have developed a compensation range, share it with your executive search partner before the search begins. A search firm with direct experience in your sector and role type can tell you immediately whether the range will attract the candidates you are targeting, where it will be competitive, and where it will create friction.
This is one of the most valuable things a specialized search partner provides at the front end of an engagement. At Real8 Group, we routinely help clients pressure-test compensation ranges before they go to market for construction, facilities, and real estate executive roles. A range that seems reasonable internally often looks different when measured against what we know candidates in the current market are earning and expecting.
If you want to benchmark compensation for an upcoming search or validate the range you have already developed, reach out to Real8 Group. You can also learn how we structure executive searches, explore our approach to finding the right talent, or meet the team.
Real8 Group is a specialized executive search firm serving the real estate, construction, engineering, and facilities operations sectors across the U.S.