The titles EMT and paramedic are often used interchangeably in the vernacular, which may lead you to wonder: what’s the difference? Is there a difference? There is, in fact, a distinction between the two of them, but they work in the same field doing similar duties, making it not obvious.

Both EMTs and paramedics are trained, medical first responders. They’re the ones who show up in an ambulance when you call 911. This means that they’re trained to spot and respond to medical emergencies. They perform triage and other emergency procedures, as well as medical transportation when necessary.

The main difference is training and education. While EMTs go through an extensive training program, paramedics typically have an associate’s degree, and many have prior experience as EMTs.

What is an EMT?

An EMT is a medical professional who is trained to respond to emergencies. All EMTs are trained in basic medical procedures such as administering CPR, oxygen, or glucose to a patient.

An EMT’s main duties are to assist. They’re dispatched by the 911 operator and are the ones to contact the hospital to inform them they have an incoming patient and of the severity of the injuries. Many of them are also licensed to drive an ambulance and will assist with the transport of patients.

EMTs don’t need to have a higher education. Instead, they are required to have a high school diploma or GED and pass a training course. Requirements vary from state to state, but generally, EMT programs take around 150 hours. Aspirants are then required to get a license to practice, which again varies depending on where you are, but usually requires taking an exam.

What is a Paramedic?

A paramedic is a certified medical professional who does almost everything that an EMT does, but they have far more training and can perform more complex tasks. Not all paramedics have an associate’s degree, but many do. Even if they don’t, becoming a paramedic requires at least 1,000 hours of training.

Because of their higher level of training, paramedics are able to perform more complex medical tasks, such as administering medication intravenously, performing tracheostomies, emergency baby delivery, and applying pacemakers.

Paramedics are often the leader of the ambulance crew, as they have more experience and training. The high level of training makes it so they’re in high demand, and as a result, they make almost $10,000 more a year than their EMT counterparts.

Many paramedics start out as EMTs and get paramedic training in order to further their careers. It’s also possible to transfer the medical credits to become a different type of medical professional later.

Tips for Becoming an EMT

If you want to become an EMT, it’s important to know that:

• You are required to have a high school diploma and be 18.

• It’s also necessary to pass a training program. Many vocational schools or community colleges offer them.

• All EMTs have to be licensed. Each state has different requirements on the amount of coursework and how their certification works – the majority require an exam, and for you to pay a fee to take it.

• Being an EMT is an incredibly physically and emotionally demanding job. It’s definitely not for everyone, so be prepared for the strain the job will put on you.

Tips for Becoming a Paramedic

Becoming a paramedic is hard work, and it involves a lot of steps:

• Most paramedics are EMTs first, and some states even require experience as an EMT to become a paramedic.

• Paramedics also need to be licensed, and the requirements vary from state to state. Many require you to take an exam to prove you have the required knowledge to do the job.

• An associate’s degree helps with the training and required coursework and can potentially be used towards a higher medical degree in the future.

• Paramedics need 1,000 to 2,000 hours of training, depending on the state, so it’s a serious time commitment.

• Due to the higher level of training and education, paramedics have a higher chance of advancement in their careers.

EMT Vs. Paramedic FAQ

1. Which has more skill, an EMT or a paramedic?

   A paramedic has more skill, knowledge, and training than an EMT. Paramedics are required to have at least 1,000 hours of training, while EMTs are usually around 150 hours. Paramedics are therefore able to perform higher-level medical procedures and are often in charge of doing triage and leading the ambulance team.

2. What’s the salary of a paramedic vs. an EMT?

   EMTs usually make around $36,000 per year, while paramedics make closer to $44,000 annually. This varies from state to state and the amount of experience you have.

3. Are an EMT and a paramedic the same thing?

   No, EMTs and paramedics aren’t the same thing. While it varies from state to state, an EMT and paramedic have different levels of training. While their jobs are similar – they’re both medical first responders and are usually part of an ambulance crew – paramedics have far more training than EMTs do.

The difference between validity and reliability is important in research, testing, and statistical analysis. Both are used to determine how well a test measures something, but the two of them tell you different things about your test.

Validity is all about accuracy in your measurements, while reliability determines consistency. Ideally, you want your equipment to be both reliable and valid – or consistent and accurate – be it a thermometer, questionnaire, or scale.

What is Validity?

Validity is the measure of whether or not your test is accurate. If you have a ten-pound weight and your scale reads it as ten pounds, then it’s valid. Valid test results need not be consistent as long as they’re accurate. If the conditions change – even if you’re unaware of them – then you should get a different measurement.

Hard measurements – such as weight, temperature, and pH – aren’t the only type of measurements that require determining validity. It’s also used in medicine and psychology to determine how useful their surveys and questionnaires are.

For instance, a questionnaire created to determine if a person has a type of illness is valid if the answers predict whether or not the patient suffers from that disease. And if it’s valid, it can be a useful tool for diagnosis.

Of course, validity isn’t quite as simple as that. There are three major types of validity that are referenced in tests.

• Criterion Validity. This determines whether or not the test fits the criteria. To put it plainly, it’s whether or not it stacks up to other valid measurements of the same thing.

• Construct Validity. Does this test measure what it’s meant to measure? If you want to measure someone’s reading comprehension and instead design a test that is a great indicator of short-term memory, it’s not valid.

• Content Validity. Sometimes also called face validity, this measures whether or not the test adequately covers what you’re attempting to measure. For instance, if it’s a test to determine comprehension of a subject in a course, it should cover all the key knowledge learned in the course.

As with most things in studies, validity isn’t a hard measure. Most studies have a sliding scale of validity, and they try to get it as close to the top as reasonably possible, but it’s essentially impossible to have something that’s truly, completely valid.

What is Reliability?

Reliability is the measure of the consistency of your instruments. If a weight put on a scale consistently comes up as ten pounds, then your scale is reliable. It should be noted that the weight in question doesn’t need to weigh ten pounds. If it’s a five-pound weight and the scale is off by five pounds, but it comes up with the same answer every time, it’s still reliable.

As with validity, there are different types of ways to determine reliability.

• Test-retest reliability. This determination is exactly what it sounds like. Tests are conducted multiple different times in order to determine the reliability of the results. This is best for something like temperature under similar conditions – something that isn’t going to change.

• Parallel forms reliability. With this one, they use different tests that are designed to be equivalent to one another. Sometimes this is also done with split-half reliability, where the test is split into two pieces, and those are compared.

• Internal consistency reliability. This is often used in personality tests, where the questions are related to what you’re trying to determine. In personality tests, they will even ask multiple similar questions in order to help determine reliability.

• Inter-rater reliability. For this type of reliability, different people run the same study or test, and the results are compared. This is the basis of many serious studies, as someone will run a study, then another person will run a similar or identical study in order to make sure the results can be replicated.

Like validity, reliability isn’t binary in most studies. The goal is to try to get as high a level of reliability as possible. The idea of limited reliability is seen most often in polling – there’s always a listed margin of error. If the margin of error is large enough, it also calls into question the validity.

Validity vs. Reliability FAQ

1. What is the relationship between validity and reliability?

   The relationship between validity and reliability is that they’re both used to determine the efficacy of a test or a study. Validity determines whether or not it’s accurate, while reliability determines whether or not the results are consistent.

2. What are examples of reliability and validity?

   An example of validity is a poll accurately predicting whether or not a candidate will win reelection. An example of reliability is that a poll gets similar results from similar parts of the electorate.

3. Can something be valid but not reliable?

   No, something can’t be valid but not reliable. If your results aren’t reliable, they’re inherently not valid. Validity is accuracy, so if your results aren’t consistent in similar conditions, they can’t possibly be accurate. However, something can be reliable but not valid.

4. How do you measure reliability and validity?

   There are several different ways to measure reliability and validity. For reliability, the best way to do it is to repeat the test multiple times in order to make sure you get the same results. For validity, it’s best to try to compare to other similar results that you know are valid.

Both of these roles are high-level management positions with many of the same responsibilities and duties, so you may wonder: what exactly is the difference between them? Is it just a matter of title or specialization?

While it’s easy enough to misread one title as the other, that doesn’t make them interchangeable. Product managers and project managers do have different specialties, but it’s more than that. And it’s actually in their titles:

Product managers are in charge of a product, while project managers are in charge of a project. That may seem overly simplistic, but it’s the true difference between them.

While the project that project managers manage may be something like the launch of a new product, that’s not their only role. They can also be in charge of transitioning from one system to another or oversee a development being built.

Product managers are involved in the sales, marketing, and improvement process of a product.

What Is a Product Manager?

A product manager manages a company’s product or products. Product management usually doesn’t have a set start and end like project management – product managers are involved in the product’s life cycle continuously.

The majority of what product managers do could be considered marketing. They research market trends and conditions and set the rules on how the product should be introduced to the public and what should and shouldn’t be part of its advertising and marketing strategy.

It isn’t all marketing based, however, as they’re heavily involved with the sales team and the business side of the product as well. They make sure it’s hitting sales goals and will help to make alterations if it isn’t – including pricing. They also help with handling business operations and deals involving the product.

As they’re in charge of the product, product managers may also be involved in improvement and alterations to an existing product.

What Is a Project Manager?

Like product managers, project managers are found in almost every industry. Project managers are the ones to make sure that timetables are met and that the product or service is completed to specifications. They’re also responsible for working out timelines, handling resources, and making sure the different teams are able to work together or at least in parallel.

Project managers are much more specific and goal-oriented than product managers. Their projects have set start and end dates, as well as a set budget. They have to deliver the project on time and under budget – if at all possible.

This means that they need to do a lot of planning, setting timetables, as well as taking costs into account. They’re also the ones who will set goals or metrics and make sure that the different teams are meeting them. And if they aren’t, they have to figure out why and how to rectify the problem.

Tips for Being an Effective Product Manager

If you want to work as a product manager, here are some things to consider:

• Product managers need a strong understanding of the market and business practices in order to effectively market and sell a product.

• This is a highly creative role, and product managers are expected to have an idea or suggestion for every situation.

• Being a product manager requires constantly being in communication with others, bringing different departments together – such as marketing, sales, and development – and setting them on the same track. This means you need to be very effective at communication and a creative problem solver.

• Product managers are the ones who rise or fall based on how the product does. You have to be willing to accept blame, share credit, and be flexible and ready to make alterations if something isn’t working.

Tips for Being an Effective Project Manager

If you’re thinking about becoming a project manager, here are a few things to consider:

• Project management is all about juggling different responsibilities but also being willing to let others do their jobs. A micromanaging project manager prevents anything from getting done.

• In order to effectively manage a project, it’s imperative that you understand the parameters. You need to make sure that you understand exactly what’s being asked of you, under what time constraints, and with what budget.

• Project managers are the ones who set the timetables and goals for individual teams under their oversight. You need to be organized, good at communication, and willing to take advice from experts.

• A large part of a project manager’s job is making sure that everything’s done on time and to make sure that the teams are working together. This means you need to be attentive, ready to make changes, and unafraid to take the blame and shield your team when necessary.

• There are several different project management methods that can help with organization. Such as:

  • Agile

  • Waterfall

  • Scrum

  • Strategic

Product Manager vs. Project Manager FAQ

1. Is project management part of product management?

   Yes, project management is often part of product management. Product management is usually more fluid and ongoing than project management, and there are several projects under the product management umbrella.

   This can be an improvement or alteration to a product (this is continuous if it’s software or technological) or something specific, like a product launch.

2. Which is better: product manager or project manager?

   The answer to this question is largely subjective. Product managers typically make more money than product managers, but not by a tremendous amount. Project managers usually have a set start and end date, so if you’re highly goal-oriented, the project manager would likely be better for you.

   Product managers are more involved in marketing and sales. If that’s your area of expertise, then product management would likely suit you better.

3. Can a product manager be a project manager?

   Yes, a product manager can be a project manager. However, they are different roles for a reason, so a product manager shouldn’t be both a product manager and a project manager – that’s doing two jobs for one salary. Though in smaller companies, you may end up doing a bit of both.

As both supervisors and managers have managerial roles, you may be wondering: what’s the difference between the two? Are the terms interchangeable?

The short answer is: no, supervisors and managers aren’t the same. The exact differences between them are going to depend on where you work and the exact nature of their duties. However, there are some general, agreed-upon differences in the business world.

As a rule, supervisors are in the trenches, doing the same work as the other members of the team. They oversee what’s going on in their team and implement the manager’s and the company’s policies. Managers do little of the actual work being done, as they’re too busy managing and making sure that the whole of the project is coming together.

What Is a Supervisor?

A supervisor is typically an experienced employee that has been promoted to run a team. While supervisors are sometimes pulled from outside, it’s less likely, as their role requires them to have a good understanding of the work being done and how goals are set and achieved.

While supervisors do managerial duties, it’s generally on a smaller scale. They work more closely with the team to make sure that day-to-day goals are being met. They’re also the ones who deal with injuries on the job and any customer complaints (depending on the job they’re doing.)

Supervisors typically report to a manager. It’s a supervisor’s job to advocate for their people and to make sure that they have the supplies they need to get the job done.

What Is a Manager?

Someone in the role of a manager is usually more removed from the day-to-day work on a project. Their goals are more overarching in terms of the company.

A manager usually oversees several different supervisors and teams and has to do the work of fitting them together. That’s especially true of a project manager, who oversees the various parts of a project and has to make sure that they’ll fit together in the end.

Many managers will want status reports from supervisors so that they can see how the various departments are doing and if they’re meeting their goals. They’re responsible for making sure that the supervisors get the resources that their team needs and that different department are able to work together when needed.

Managers are extremely likely to have at least a bachelor’s degree, with almost half of them holding one. Another 7% have a master’s. It is possible to become a manager with a GED, but the path will be a lot harder. This, of course, is also dependent on the field you work in – there are some that aren’t possible to get into without a degree.

Tips for Becoming a Supervisor

If you want to become a supervisor, here are some things to consider:

• Supervisors usually work their way up from the bottom to end up in a supervisory position. So start off in your field of choice and build up experience.

• A bachelor’s degree is recommended if you want to be a supervisor, but that will be largely dependent on the field you’re working in.

• Make an effort to understand different pieces of the project. You don’t need to be an expert on every part, but if you want to supervise a team, you need to know the basics of what everyone’s doing.

• All management is about dealing with people and working out the best way to bring out their best. If you don’t like working with others, a supervisory role may not suit you.

Tips for Becoming a Manager

If you’re interested in going into management, here are some things to consider.

• Managers are all about the macro. They’re interested in the bigger picture and how the different pieces come together.

• While Zippia’s statistics show that about 60% of managers have a bachelor’s degree, it’s likely higher than that, as some roles that are really supervisors are labeled as managers – such as in retail. If you want to be a manager, a degree in something like business management is an excellent choice.

• Managers deal in resources and time management and are required to think on their feet. If part of a project isn’t coming together on the right timeline, you have to be able to make adjustments to it.

• Most of a manager’s job is planning and communications. If run properly, managers should spend all of their time managing, as it’s impossible to be effective both managing and working on the project.

Supervisor vs. Manager FAQ

1. Is the role of a supervisor higher than a manager?

   No, a manager is considered a higher-level role than a supervisor. Supervisors usually work directly with the people who are working on a piece of a project, while managers oversee the entirety of a project.

2. Are managers and supervisors the same thing?

   No, manager and supervisors aren’t the same roles. While both managers and supervisors oversee other employees and work with time management and resources, a supervisor is more on a micro level while the manager is on the macro level.

3. What’s the salary difference between a supervisor and a manager?

   The salary difference between a supervisor and a manager is about $26,000 annually.

   Of course, this is in many ways just an estimate, as your salary will hugely depend on what you’re managing or supervising, your level of experience, and the field you’re working in. But, as you can see, managers make a fair bit more money than supervisors on average.

As stated in the job titles, data analysts and data scientists work with data. Data is becoming a more and more important commodity in the business world, and demand for those who are experts in its categorization and interpretation is in high demand.

What isn’t immediately apparent, however, is what exactly the difference between a data analyst and a data scientist is. Obviously, they both work with data, but what do they do with it?

The answer has to do with their fields of expertise: data analysis and data science. An analysis is what it sounds like. Data analysts take existing data and make interpretations from it – analysis. Data scientists take the data and generate new questions from it, then use the data and databases to try to answer those questions.

What is a Data Analyst?

Data analysts answer questions using data. Various managers in the company have different questions they want answers to and different metrics they want to see if they’re hitting, and it’s a data analyst’s job to scour the data and find the truth.

Because of this, data analysts are excellent with statistics, numbers, and managing data. They are expected to support their answers with the data, so a large part of their job is making graphs, charts, and other visual aids to help explain their answers.

Beyond just answering the questions posed to them, data analysts are expected to come up with solutions and recommendations. For instance, if they’re tasked with finding out the business is meeting its profit goals, they’re supposed to find out not only if that’s true but how to fix it if they aren’t – or improve it, even if they are.

Due to the fact that their job is heavily mathematically and observation-based, data analysts are expected to back up all of their answers and recommendations with data. That means that they need a strong understanding of not only data but the industry that they’re working in as a whole.

They also need good communication skills to get their point across and make the data easy to understand.

What Is a Data Scientist?

Data scientists do many of the same things that data analysts do; however, the job is much broader in general. As stated above, data scientists ask new questions. They will also try to find the answer to these questions by devising experiments or new ways to interpret or categorize data.

Due to the fact that data scientists will reinterpret and categorize data in databases, they’re required to know programming languages and possibly some computer science. Some data scientists are responsible for developing algorithms, which are programs that automatically gather and interpret data.

Data scientists need to have a coterie of skills in order to be successful. Knowledge of programming skills, as mentioned previously, along with strong mathematical and statistical knowledge and skills. Also, like a data analyst, a data scientist is expected to be an expert in the field that they’re working in.

Like data analysts, data scientists will report their findings. This requires them to be good at presenting, as well as communicating and be able to back up their assertions with hard data.

Tips for Becoming a Data Analyst

If you want to work as a data analyst, here are some things to consider:

• The vast majority of data analysts have a bachelor’s degree, and many of them majored in business or computer science. A degree like data analysis or mathematics is also an excellent choice.

• While much of what data analysts do will be working on a computer alone, they are also expected to present their findings and suggestions. This means that working on improving your presentation skills is likely to pay off.

• While knowing a programming language isn’t essential, it’s recommended and will help you work with databases and other programs. It also helps you to understand how computers function, which will help when working with data sets.

Tips for Becoming a Data Scientist

If you’re thinking about becoming a data scientist, here are a few things to consider.

• Much of data scientists’ work is more abstract, working with data in a scientific manner.

• There’s a lot of freedom in terms of problem-solving in this job, which means you’ll do a lot of work without much supervision.

• The majority of data scientists have at least a bachelor’s degree, and many have a master’s or even a doctoral degree.

• It’s not uncommon for data scientists to start off working as data analysts to gain experience.

Data Analyst vs. Data Scientist FAQ

1. What skills are used by data scientists vs. data analysts?

   Data scientists and data analysts use many of the same skills. However, data scientists are required to know programming languages, while with data analysts, it’s just recommended.

   Data scientists are also expected to do more than just interpret data – they’re expected to come up with different ways of looking at it and different solutions to those observations.

2. Is a data analyst a good data scientist career start?

   Yes, many data scientists will start out as data analysts. It grants you both experience and a chance to work with data in the real world.

   Interpreting data and coming up with solutions are a data analyst’s main responsibilities, and having a basis in that will help with the more complex analyses and alterations that data scientists do.

3. What qualifications are required to become a data scientist?

   The most important qualification to become a data scientist is a bachelor’s degree – preferably in data science, statistics, mathematics, or computer science. It’s essentially impossible to become a data scientist without higher education. Many data scientists have more than just a bachelor’s – almost 35% have a master’s, and some even have a doctorate.

   Many data scientists also have experience in the field, either as a data analyst or some other job working with data – such as a research assistant.

4. Do data analysts code?

   It’s not a requirement for data analysts to be able to code, but it’s highly recommended to have knowledge of programming languages. It can be helpful in altering or improving databases and sets, and it’s essential if you wish to go on to be a data scientist.

5. Is it better to study data analytics or data science?

   It is better to study data analytics if you’re more interested in working with numbers than programming, and data science if you’d like to program and earn more money.

   Data science requires being able to program, and data scientists make more money than data analysts. However, if you like working with numbers and aren’t as interested in programming, then data analytics is still an excellent and highly in-demand choice.

Key Takeaways:

• Annual income is the difference between your total or gross income and all the expense incurred during the year.

• The formula for annual net income is: Annual net income = Gross income – Expenses + Additional income.

• Gross income is the combination of all income including salary, investments, and interest on savings.

• Expenses include deductions like local, state, and federal taxes, pre-tax healthcare premium payments, and social security.

• Knowing your annual net income is smart for financial decision making. For example, most credit card applications ask for your net income.

• Businesses also need to know their annual net income for financial decision making. They calculate it with the formula: Business annual net income = Gross revenue – Expenses.

What Is Annual Net Income?

How to Calculate Annual Net Income

• Base salary

• Positive returns on investments

• Interest from savings or checking accounts

• Freelance/contract work

• Income from part-time job(s)

• Royalties

• Gambling earnings

• Shared income by a spouse (for credit card applications)

• Local, state, and federal taxes

• Pre-tax healthcare premium payments

• Social security

• Retirement contributions

• Medicare payments

What to Include in Your Annual Net Income

How to Calculate Annual Net Income From a Paystub

1. Determine your income. This is the same number as your gross pay or the amount of money you and your employer agreed upon for your salary. Remember, this number is bigger than your actual income and the money that gets put in your bank.

2. Find your annual income. To calculate your annual net income, you need to know your pay schedule. Do you get paid weekly, bi-weekly (every 2 weeks), semi-monthly (on 2 specific dates each month), or monthly? That will change how you calculate your annual income since you need to know how much you get paid in a year.

   If you’re paid weekly, multiply your salary by 52. If you’re paid monthly, multiply your salary by 12 to get your annual gross income. Do you only know your hourly pay rate? Take your hourly rate and multiply it by 2080 if you work 40 hour weeks throughout the year to get your annual income. Note that the results of your calculations might not be entirely precise, as work hours in a year, month, or other pay period can vary, along with company policy for paid and unpaid holidays. Here’s a more detailed article for calculating your gross annual income.

3. Find your expenses. What recurring deductions are taken from your paycheck? Look for things like taxes, social security, medicare, and retirement contributions. You should be able to find most of these numbers on your paystub.

   Otherwise, remember to check in with your employer or HR department if you’re unsure what expenses are being taken from your paycheck. You’ll need to know these numbers as accurately as possible to get a clear annual net income.

4. Add any other income. Don’t forget about other income or sources of money, like social security payments or income from part-time jobs. Of course, if taxes or other deductions are also taken from these forms of income, be sure to calculate these rates individually as well. The results can then be added to the calculation of your annual net income.

5. Do the math. At this point, you have all the numbers you need to calculate your annual net income. Start with your gross income and subtract your expenses, then add back any additional income.

Example Annual Net Income Calculation

Annual Net Income for Credit Card Application

Determining Annual Net Income for a Business

• Salaries for employees

• Overhead costs (rent, software licenses, shipping costs, utilities)

• Operating expenses

• Employer contributions to health insurance, social security, and other programs

• Federal, state, and local taxes

• Loans and interest

Frequently Asked Questions

1. How do you calculate annual net income on tax return?

Calculate your annual net income on a tax return by subtracting your total tax from your taxable income. Your annual net income on a tax return will show how much you made after taxes. Sometimes, the amount you paid in taxes is less than the amount you owe in taxes. If this is the case, you will have to pay additional taxes, further decreasing your annual net income.

2. What is meant by net income?

Net income is the difference between gross income and expenses. Your net income can be thought about like your total profit. After you calculate all your income and expenses, you should, hopefully, be left with a sizeable amount of income. However this is not always the case, which is why it is important to constantly be aware of your annual net income when making financial decisions.

3. How do I find my total annual income?

Find your total, or gross, annual income by knowing either your hourly wage or salaried paycheck amount on a weekly basis, and then multiply by the amount of weeks you work in a year. For example, if you work 40 hours a week at $20 an hour, and you plan to work 50 weeks in the year, your total annual income will be: 20 x 40 x 50 = $40,000. However, note that this calculation does not include deductions like taxes and benefits, and therefore this is NOT your net income.

Key Takeaways:

• Competitive pay is a compensation package that is equal to or greater than the market rates for a position in a given industry and geographical area.

• In Human Resources, competitive pay means offering a wage within +/-10% of the average market rate for a position.

• Competitive pay is more than just salary considerations, it also includes paid vacation time, flexible schedules, more robust retirement plans, stock options, and more.

• Competitive pay is determined by job title, industry, location, availability, and experience level.

• Negotiate for competitive pay by knowing your goals and and worth ahead of time.

What Is Competitive Pay?

• more paid vacation time

• flexible schedules

• more robust retirement plans

• professional development opportunities

• bigger bonuses or commissions

• stock options

• better health insurance plans

What Does Competitive Pay Mean for You?

• Job title. Your starting point for determining what competitive pay looks like for you is researching what the salary range is for your job title. Use resources like Zippia, PayScale, and the Bureau of Labor Statistics to determine the average market rate for your desired position. You can then assume that any salary that matches or exceeds this average rate is truly competitive.

• Industry. The next aspect of competitive pay to consider is the industry. A great tactic to net you the highest possible salary is to apply for similar positions in different industries. To do this, you’ll need to dig deeper to see how each industry values your job. For example, the typical salary of an HR rep might vary considerably depending on if they’re working in the energy industry or education.

• Location. Just as the cost of living and minimum wage rates differ from state to state, so does the definition of competitive pay. An employee in San Francisco should expect higher compensation rates than someone in the rural midwest, for instance. The more specific information you can uncover in your research, the better equipped you’ll be for identifying what pay packages are genuinely competitive in a given region.

• Availability. Everyone knows the law of supply and demand: the rarer and more sought after something is, the more valuable it is, and the more common and less desired something is, the less valuable it is. This principle applies to the job market as well as anything else.

  So if you have a highly specialized skill set that’s difficult to find and in high demand, competitive pay may imply even greater compensation than that +10% market rate we discussed earlier. On the flip side, if you have very basic skills and are one of dozens of qualified candidates, you can expect competitive pay to be on the lower end of the spectrum. Remember that location also affects availability. There might be many computer programmers in Silicon Valley, but the Rust Belt might not have such a deep pool of candidates. Tip: If you can find out how many other candidates are applying for a job and for how long the company has been trying to fill the vacancy, you’ll have a better idea of the supply and demand for the specific position in question.

• Experience level. Entry-level applicants with little or no experience can expect lower compensation rates than those with a wealth of experience applying to higher-level positions.

  Things like education level, certifications, awards, and practical experience all determine your experience level. When you’re researching salary data, incorporate your experience level for more accurate results and expectations of how competitive pay should look.

What Does a Competitive Compensation Package Include?

• Employer-sponsored health insurance. Health insurance consistently ranks as the most important benefit for employees in the United States. The cost of insuring yourself privately is exorbitant in the extreme, so having this expense reduced significantly through high-quality employer-sponsored health insurance is a massive boon.

  Most companies also offer dental and vision insurance plans. Some even offer more advanced health care options, like flexible spending accounts.

• Paid time off. Employees place a high premium on the ability to take time for themselves every now and then. Not having to worry about your income just because you want to take a vacation is a massive quality of life boost for employees.

  Some companies offer unlimited vacation policies, which sound great in theory but do come with drawbacks (namely, not being paid for unused vacation days). Studies show that the average American has around 8 days of PTO each year, so offering more than this will be competitive for most job openings. Note that senior-level people can expect more days of PTO.

• Retirement plan. Saving for retirement is tough, but with employer-matching programs that lower your pre-tax income (and your tax burden), it becomes easier to plan for the future. 401(k) plans are the most common, but some companies will set you up with IRA or Roth IRA plans. Competitive applicants expect a higher rate or cap on employer matching contributions to these plans.

• Use of a company car

• Bonuses and/or commission payments

• Paid parental leave

• Remote work options

• Flexible scheduling

• Disability insurance

• Life insurance

• Tuition reimbursement

• Commute reimbursement

• Free on-site meals, gym, childcare, or other facilities

• Stock options

• Relocation bonus

How to Negotiate Competitive Pay

1. Determine your goals. The first step in any negotiation is determining what you want out of a compensation package. That means prioritizing: do you care most about earning a big paycheck, having competitive bonus structures, having a good health insurance plan, creating a flexible schedule, or something else?

   Every individual will value non-monetary perks differently, so assess what your must-haves are before starting your research, let alone negotiations. You must also consider how much you’ll have to pay for health insurance if your prospective employer doesn’t offer generous plans or how much more you’ll need to dedicate to your retirement savings if the employer doesn’t provide a good 401(k) matching program. With this information, you’ll have a fuller picture of what various compensation packages are worth.

2. Know your value. Remember all that research you did on what typical pay rates are for your industry, position, location, and experience level? Time to put it to use. By knowing what the average salary is for a candidate in your situation, you’ll know what a competitive salary should look like – at or above that rate.

   Aside from finding this number, you should also take time to self-assess. Reflect on your achievements and how your experience has boosted your value. This helps prevent you from selling yourself short on salary requirements and develop confidence walking into negotiations.

3. Stay strong. You have a list of wants and needs, as well as the data that supports why an employer should meet those conditions. Don’t lose sight of those two things. You’ll need to state your case, and while you should always be respectful, don’t cede ground on essential topics.

   Employers have access to the same salary data you do (and then some), so showing them that you’ve done your research proves that you’re not so naive to think an offer on the low end of the salary range is genuinely competitive. Use your data to present your case and be ready for a compromise offer or an outright refusal. Consider the low end of what you’re willing to accept in the case of a compromise and determine whether the company is still meeting your minimum requirements. Also, consider the opportunities for advancement, because that’s worth something as well.

4. Keep up with trends. Even after you’ve successfully negotiated a truly competitive salary, the journey isn’t over. Your job’s responsibilities, market rates for similar professionals, and the value of new certifications or qualifications are all factors that change as your career continues. As you’ve seen, those changes all bear on what constitutes competitive pay for you.

   Consistently reevaluate what constitutes a competitive salary, so you always receive compensation in line with what you’re worth.

The Importance of Offering Competitive Pay

Frequently Asked Questions

1. Is a competitive salary good?

Yes, a competitive salary is good. It is good for the employees and it is good for the business. With a competitive salary, employees will feel more valued. This can lead to greater job satisfaction and motivation.

In turn, the business will see greater productivity, so as long as the salaries are within their budget, the business will see a net gain.

2. How can I get competitive pay?

To get competitive pay, you first must do your research. Using online resources, calculate the median pay for your position. Also research the current job market and figure out if your job is competitive. Consider your geographical location as well and factor in cost of living expenses. Research pay structures based on experience.

When all this is said and done, then determine your goals. Set a salary for yourself and decide whether you would accept benefits in lieu of a higher salary. Finally be persistent and flexible without compromising your goals.

3. How is competitive salary calculated?

A competitive salary is calculated based on the position, industry, geographical location, and experience of the employee. A business will take all of these factors to consider how much to offer an employee. Businesses usually work within a budget for salaries and benefits, so they will also factor this into their considerations.

Final Thoughts

Key Takeaways:

• Pay grades define the amount of salary or wages available at each step in the employment process.

• The two main factors that determine pay grade are level of responsibilities and position within a career path.

• Pay grades are formatted as a range in which the salary or wages will be determined.

• Pay grades offer incentives for employees and encourage motivation.

• Pay grades at different levels of seniority can overlap to provide flexibility for an organization.

What Is A Pay Grade?

• Specific responsibilities for the position

• Level of seniority

• Overall job difficulty

• Prior work experience

• Education

• Performance

• Length of time in the field

How Does A Pay Grade Work?

• Sales manager

• Office clerk

• Wildlife biologist

• Makeup artist

• Interior designer

• Bank teller

• Public relations specialist

• The pay grade range for the Sr. level marketer would probably fall around $61,000-$120,000.

• On the other hand, the entry-level marketer would experience a range closer to $30,000-$75,000.

• The associate marketer would fall somewhere between the two.

Pay Grades in Public Sector Workplaces

• Military

• Law Enforcement

• Public Education

• Transit

• Healthcare

• Infrastructure

More Pay Steps that Encourage Motivation

Overlapping Salaires are Common

How Much are Raises in America?

Tips For Negotiating Salary or Pay Grade

1. Do Research on the Market Average. Doing the proper research in the market average salary for your position is crucial to your negotiation’s success. This can create a good foundation for your stance as to why you deserve a higher pay grade.

   Some Factors to Consider Researching Might Include:

   • What are direct competitors paying on average?

   • What is the national average for your job title?

   • What is the average salary in your city or State?

   • What is the average salary for an employee in your position with your level of experience?

   • What are the recruiters in your location and industry offering?

2. Be Organized. There’s nothing that will deter a potential or current employer faster than a disorganized approach. You’re bringing a request to there attention, and that means it should be professionally prepared. Take time to organize your needs, thoughts, and research conclusions into a rational argument for your value.

3. Be Flexible to Alternative Options. Your current employer may have their hands tied budget-wise when it comes to offering a higher pay grade. This doesn’t completely degrade negotiations, and they could have other offers that are equally as valuable. Be flexible in your discussion and open to hearing their alternatives to a higher salary.

   Examples of Possible Benefit Alternatives an Employer can Provide Include:

   • One work at home week per month

   • An extra three personal days per year

   • Stock options

   • More paid sick days

   • Dental benefits

   • Tuition reimbursement

   • Commuting costs

4. Be Confident, but Not Conceited. The fine line between going into a salary negotiation confident without being conceited can make the difference between attaining your request or not. You should have enough confidence to accurately articulate your strengths and accomplishments in your time working. However, try to keep this confidence in your value from coming across as too self-indulgent.

   Employers respond well to level-headed professionalism and mentioning definitive achievements.

5. Express Your Gratitude. Whether you’re negotiating a starting salary with a potential employer, or the details of a promotion with a current company, being gracious for their offer is key. Even if the pay grade didn’t live up to your original expectation, they’re still extending an offer.

   When you’re dealing with negotiating the terms of a raise with your current employer, be sure to thank them for all the experience you’ve gained while working for the organization. Experience can be just as valuable as dollar signs, and you should be appreciative of this when asking for more.

6. Set An Exact Target Pay Grade. You should try to be as specific as possible when negotiating your salary. You should go into it with a target number in mind that you’d like to hit.

   When deciding on a pay grade range to counter offer an employer, make sure that the lower half of your request is still a salary number that you would accept. Most companies are in the business of adhering to a budget, and if you give them a smaller number than you actually want, it could lead to accepting an offer for less than you need.

7. Don’t Be Scared to Leave or Decline an Offer. Something to consider before embarking on salary negotiations is that there’s always the possibility that it can result in you moving on to other options. Whether that means leaving your current company or declining a job offer because it’s not meeting your minimum salary requirements.

   Don’t be too scared to walk away from an offer, even if it means going back to job searching. Finding the right position is a process. Letting the fear of not finding anything else affect your decisions can paralyze you into settling for an offer that won’t meet your needs or is less than you deserve.

Frequently Asked Questions

1. What defines a pay grade?

A pay grade is defined as a level of compensation that reflects the responsibility and authority of an employee. Pay grades are used to determine what should be the appropriate salary or wages for an employee at a particular time in their career path.

2. What is the grade of an employee?

An employee grade groups employees of similar positions and ranks them to assign compensation rates and salary structures. Employee grades are closely tied to pay grades. Think of employee grades as the genesis of pay grades. An organization must first rank employees based on skills, authority, experience, and responsibilities before they can come up with an appropriate pay grade.

Understanding economic supply and demand provides valuable insight into any given market. You’ve probably seen a basic demand-supply graph used to illustrate the relationship between a product’s market price and the quantity demanded by consumers.

Consumer surplus and producer surplus are important pieces of the equation. Markets tend to fluctuate, especially because consumers are able or willing to spend at different price points for any given product or service. This is where a surplus is created.

Key Takeaways:

• To calculate consumer surplus you need to know the difference between the cost consumers are willing to pay for a product or service and the actual market price.

To calculate extended consumer surplus you need to know the difference between the price the consumer is willing to pay and the price at equilibrium on the supply and demand curve, then multiply this by 0.5 the quantity at equilibrium where supply and demand are equal.
Producer surplus is the difference between the minimum price a producer is willing to accept for their goods or services and the final price they receive.

• A social surplus is the sum of consumer surplus and producer surplus.

• Price floors set a minimum on a price. Price ceilings set a maximum on a price. Both are tools enforced by governments when they feel their benefits outweigh their market inefficiencies.

What Is Consumer Surplus?

Based on the economic theory of marginal utility, consumer surplus is an economic measurement calculating the excess cost that consumers are willing to pay for a product or service in comparison to the actual market price.

How to Calculate Consumer Surplus

When looking at a demand-supply graph, the demand curve is always going to be sloping downward due to the law of diminished marginal utility. We can measure consumer surplus with the following basic formula:

In our earlier example with the television, we can see that consumer surplus equals $1,300 minus $950 to give us a total of $350 for our surplus.

On a larger scale, we can use an extended consumer surplus formula:

• Qd = the quantity at equilibrium where supply and demand are equal

• ΔP = Pmax – Pd

• Pmax = the price a consumer is willing to pay

• Pd = the price at equilibrium where supply and demand are equal

If this formula looks vaguely familiar, that’s because we’re actually solving for the area of the consumer surplus triangle on a demand-supply graph. As a reminder, the formula to calculate the area of a triangle is (½) x base x-height.

But then why does the consumer surplus formula require subtraction?

Good question. Keep in mind that the height of the triangle we’re solving for isn’t starting at 0 on the graph. Instead, it’s determined by the distance from the equilibrium price to the point where the demand curve intersects with the vertical axis. Because of this, our height is going to be the difference between those two points rather than the value of the topmost point on the axis.

Let’s take a look at an example using the extended formula.

What Is Producer Surplus?

Supply and demand are all about balance, so the opposite side of the equation results in a producer surplus, which is the difference between the minimum price a producer is willing to accept for their goods or services and the final price they receive. A surplus happens when market prices exceed the lowest price point that a producer will accept.

Let’s look at an example to better understand producer surplus.

How to Calculate Producer Surplus

When looking at a demand-supply graph, the supply curve is always going to be sloping upward due to the law of increasing returns. We can calculate producer surplus with this formula:

Understandably, producers can’t earn a profit if they aren’t able to recoup at least the marginal cost they spent to produce and transport their products. A free market has this natural push-pull effect that prevents either the consumer or the producer from fully dictating price points.

However, some businesses are able to take advantage of price discrimination in order to increase company profits.

Price Discrimination

This selling strategy involves charging different prices for the same goods or services based on the business’s estimation of the maximum amount they think the customer is willing to pay.

For example, suppose you’re looking at renting a house on the beach for a week. In that case, the exact same house is going to cost a lot more if you’re renting during peak tourist season versus the off-season when the renter is desperately trying to prevent the house from sitting empty.

Most brand-name goods know that there’s power in a name and people are willing to pay much more to be “on brand” rather than buy a cheaper, almost identical alternative that’s lacking a famous logo.

Airlines are also notorious for price discrimination. They know that people are willing to pay more for convenience.

Because there’s less of a demand for early morning and late-night flights, the airline is able to price fares differently depending on the time of day, even though the cost of flying and fueling a plane from Destination A to Destination B isn’t going to change. This is called the elasticity of demand.

What Is Social Surplus?

Also referred to as economic surplus or total surplus, a social surplus is the sum of consumer surplus and producer surplus. When looking at a demand-supply graph, the social surplus is the total area between the supply curve, the demand curve, and the point of equilibrium.

A deadweight loss, which occurs when the economy is producing at an inefficient quantity, is the loss in total surplus.

When the market is operating at optimal efficiency, it’s impossible to increase consumer surplus without reducing producer surplus, and it’s also impossible to improve producer surplus without lowering consumer surplus.

Total surplus is larger at equilibrium quantity and price than it would be at any other quantity and price.

How Do Price Floors and Price Ceilings Affect the Market?

A healthy market is able to adapt and settle naturally on an equilibrium point that balances price and quantity. Imposing a price floor or ceiling prevents the market from adjusting to its ideal point of equilibrium and maximum efficiency while also transferring some of the consumer surplus to producers and vice-versa.

A price ceiling is a maximum price a producer is allowed to charge consumers in exchange for a good or service.

The government’s impact on the drug market is an excellent example of price ceilings. Let’s say that a pharmaceutical company created a new life-saving drug. The market-price equilibrium, if left to the free market without any restrictions, would be $800, with an expected 50,000 people using the drug per month.

But the government wants to make the drug more affordable, so it imposes a price ceiling at $500.

So, what happens?

First, the pharmaceutical company is going to produce a lower amount of product. Their supply is going to reflect the price ceiling line on the graph instead of the market equilibrium point. This reduces the social surplus and increases deadweight loss. Basically, money is being discarded without benefitting anyone.

In addition, some of the producer surpluses end up being transferred to consumers, which is why consumers largely favor price ceilings. However, the gain to consumers is less than the loss to producers, aka still a deadweight loss. The market is not operating as efficiently as it could be.

A price floor is the lowest price that can legally be paid for goods or services.

For example, let’s say the city government is concerned about a historical theater going out of business. It has a long tradition of providing entertainment to the community giving local musicians and actors a place to perform. The government decides to set a minimum ticket price at $10 for performances.

As a result of the higher price per ticket, demand for tickets falls. The theater had been selling 1,500 tickets for $7 at the equilibrium point, but now they’re selling 1,100 for $10. Although the price floor caused some of the consumer surplus to be transferred to the producer, which is why producers often favor price floors, the market is still looking at an overall deadweight loss.

Frequently Asked Questions

1. Is there any benefit in understanding consumer surplus?

Yes, there is a great benefit to understanding consumer surplus. If you are a consumer, knowing about consumer surplus empowers you to make smart long term definitions. For example, if you buy a product at a price less than you’re willing to spend, you know you have a consumer surplus. This concept can guide you to a decision to either spend or save that “surplus” based on your needs and wants.

2. Who is affected by consumer surplus?

Consumers and producers are affected by consumer surplus. A consumer is obviously affected by a consumer surplus because it provides a concept on how to approach paying for goods or services. Similarly, a producer needs to consider the difference in which they are willing to set a price against what is the greatest amount of goods or services they can sell. This in part is based on the where the consumer surplus ends at equilibrium.

Final Thoughts

The market is fluid. When it’s allowed to operate freely, consumers and producers tend to push and pull until equilibrium is reached and the market is able to regulate its supply and demand with maximum efficiency.

Understanding the basics of supply and demand; consumer, producer, and social surplus; price discrimination; deadweight loss; price ceilings; and price floors are critical to making comprehensive business decisions about quantity and pricing.

In many cases, the terms product owner and product manager are used interchangeably. However, there are key differences between the two careers.

Therefore, if you’re a current or prospective marketing worker looking to fill an advanced role, you might be curious about the difference between product owners and product managers. After all, even though the positions are similar, they have different requirements and daily tasks.

For example, while a product manager plays a strategic role in using the market and other team members to bring a company’s vision and objectives to life, a product owner will instead maximize the value of the product by communicating the voice of the customer.

Overall, to find out more about all of the important differences between product owners and product managers, this article will dive into everything you need to know.

What Is a Product Owner?

Product Owners are responsible for maximizing the value of a product through research that can be provided to a development team. Often, this involves working with Scrum to create a backlog of customer or user stories and opinions. This information can then be presented in meetings, allowing a team to implement a tactical approach to development.

Typically, this job requires skill and responsibility, as the product owner will be the sole employee responsible for backlog grooming. Additionally, these professionals will be expected to:

• Gather customer feedback and arrange it into user stories in the product backlog.

• Building a production process that gives the development team a clear outline of current and future work.

• Attending agile and scrum meetings to keep tabs on how development is aligning with the product manager’s roadmap.

• Effectively communicating the thoughts and opinions of customers to the development team.

• Providing feedback on the product manager’s current roadmap.

Overall, the role of a product owner is customer-centric and narrowly focused. In turn, the detailed analysis provided by a product manager is a highly useful tool for developing effective products.

What Requirements Do Product Owners Have?

A product owner serves a complex role that requires effective teamwork, independent work, and a comprehensive understanding of scum and agile. With that in mind, having the right education and skills is crucial for starting your career.

Typically, a product owner will need at least a Bachelor’s Degree to start their career. Common relevant degrees include Business, Computer Science, or Computer Engineering. Additionally, while 67% of product managers in the workforce have Bachelor’s Degrees, it’s worth noting that 23% need a Master’s Degree to start their career.

Many product owners also choose to take supplemental courses to bolster their understanding of certain tools. For example, the Professional Scrum Product Owner (PSPO) teaches participants about Scrum and provides two levels of certifications for completion. Likewise, the Certified SAFe Product Owner is also a Scrum training that takes place over the course of two days.

Overall, here are the main skills required to be a product owner:

• Scrum and Agile Software Development Methodology. Most of a product owner’s job will involve working with Scrum, as the framework allows professionals to develop, deliver and sustain products in complex environments.

• User Interface (UI). Understanding UI allows product owners to communicate information to customers and users effectively. This makes it a crucial area where product owners can bridge the communication gap between the company and the customer.

• Product Backlog. In many cases, product owners are solely responsible for the product backlog. That makes this skill especially important for finding and prioritizing customer stories.

What Is a Product Manager?

Project managers are professional overseers who use their skills and expertise to formulate a long-term vision for products through observing trends and opportunities in the marketplace. In turn, these observations can also help product managers determine what should be built in the future.

With that in mind, this role requires a great deal of knowledge and responsibility. In many ways, product managers are the leaders of the project and are entrusted with finding the right direction for the product being sold.

Overall, your success will be measured by how successful the product is over its lifecycle, which requires having a vision for the product, understanding your customers, and taking the helm as an effective team leader.

Here are some examples of a product manager’s tasks:

• Performing detailed research that uncovers user needs, as well as potential gaps in the market.

• Formulating a long-term strategy for products.

• Creating and effectively communicating roadmaps to the team.

• Deciding what the team should build next.

• Using customer feedback to implement new functional features.

What Requirements Do Product Managers Have?

The guidance provided by a product manager is crucial for the success of any team, and that guidance can’t be provided without the proper skills and education.

Usually, product managers will need at least a Bachelor’s level education to start their career. The most commonly pursued degrees are in Business, Marketing, Electrical Engineering, and Computer Science. Around 17% of product managers have a Master’s degree, meaning that you should be able to land a job with only a Bachelor’s.

Additionally, there are specific product management certifications you can achieve that can give you an edge on the job market. Some of the most common of which include:

• Professional Certified Marketer (PCM)

• Project Management Professional (PMP)

• Certified Scrum Product Owner (CSPO)

• Certified Product Manager (CPM)

• Certified Scrum Master (CSM)

In general, while both product owners and product managers need experience with scrum, here are some examples of skills that are unique to product managers:

• Product and Data Management: product managers have to know how to effectively develop, plan, price, forecast, launch, and market the product. This requires them to understand the product inside and out, as well as the tools needed to manage that product’s data.

• Market Research: Understanding the customer is a crucial part of product management and requires that managers know how to collect and analyze both qualitative and quantitative data about the market.

• Roadmapping: product managers must know how to take all of their research and create an effective game plan for the future of a product. Effective interpersonal skills are also required to communicate the roadmap to other team members.

What Are Some Differences Between Product Owners and Product Managers

There are a few crucial differences between product owners and product managers that can help you determine which career is right for you. Here are those differences outlined:

1. Education Requirements

   While both careers require you to have at least a Bachelor’s degree, the type of degree required to achieve a career varies. For example, 14% of employees currently working as product owners have a degree in computer science, compared to only 6% of product managers.

   In general, product owners are much more likely to have a computer science or engineering background, while product managers are more likely to have a business or marketing background.

2. Salary and Job Outlook

   Product owners and product managers have different average salaries in the U.S., in part due to their skills and responsibilities. For example:

   • Product Owner: The average product owner in the U.S. earns $104,000 per year ($50.32 per hour). Product owners in the 90th percentile can earn up to $133,000, while product owners in the 10th percentile might earn only $81,000. Between 2018 and 2028, this career is expected to grow 8% and produce 21,800 job opportunities nationwide.

   • Product Manager: The average product manager in the U.S. earns $113,000 per year ($54.77 per hour). Product managers in the 90th percentile can earn up to $153,000, while product managers in the 10th percentile might earn only $84,000. Between 2018 and 2028, the career is expected to grow by 8% as well.

   With this comparison in mind, it’s clear that a career as a product manager offers a slightly higher salary. The average product manager earns 8.65% more than the average product owner, while product managers within the top 90% of earners earn a considerable 15% more.

   Growth-wise, both jobs are also very similar. Both are expected to experience 8% job growth within the next decade and also have over 150,000 jobs currently on the job market.

3. Leadership

   One of the biggest differences between product owners and product managers is the level of leadership required for each job. Despite being called an “owner,” product owners do not serve as much of a leadership role within the development process.

   While the information they provide through backlogs and customer stories is vital for creating a roadmap, they don’t actually create the roadmaps themselves.

   On the other hand, product managers are responsible for developing product roadmaps, as well as communicating them effectively to the team. This means that the role of a product manager is more focused on leadership than the role of a product owner.

4. Responsibilities

   On a basic level, product owners and product managers perform different tasks and have different responsibilities in the workplace. Product owners work independently to gather important customer feedback, which can then be compiled into useful information for the team, while product managers are responsible for using their knowledge of the market to formulate a long-term vision for the product.

   More specifically, a product owner will use scrum to analyze customer data and then use that data to generate backlogs. These backlogs are essentially customer stories that can be used to determine the current successes and shortcomings of the product. Ultimately, the goal of a product owner’s task is to provide insightful information that can be used to better the product.

   On the other hand, product managers work more broadly with the market and will analyze a variety of trends in order to discern the most effective roadmaps. Then, once a good roadmap is envisioned, product managers will need to communicate the plan with team members.

   Without the guidance of product managers, planning and carrying-out future plans for a product is near impossible.

5. Metrics of Success

   A key difference between product owners and product managers is what defines a successful day of work. For a product owner, success is as simple as accurately completing customer stories and other performance metrics the company requires.

   However, success is more complex for product managers. In a way, the success of the product is intrinsically linked to the success of the product manager. Overall, due to their leadership role, a product manager’s success is determined by the product’s NPS, conversions, revenue, and churn.

   All of which can be risky and difficult to achieve, depending on the market, but also highly rewarding benchmarks of success.

Product Owner vs. Product Manager FAQ

1. Are product owners higher than product managers?

   Usually no, product owners are not higher than product managers. In fact, at larger companies, this is typically the opposite, with the product manager holding a higher position than the product owner.

   Ultimately, this is because product owners will gather customer stories that can be reported to a product manager. In turn, the product manager will then use that information to develop a thoughtful roadmap for the product. Additionally, product managers will report important information to the team and do their best to keep the team on track.

   Therefore, product managers are more of team leaders when compared to product owners.

2. Do companies need a product manager and a product owner?

   No, some companies choose not to have both a product manager and a product owner. Most commonly, a product manager can exist without a product owner, as product managers can assume the role of finding the customer’s “voice” on their own.

   However, there are a few cases where companies choose to have a product owner instead of a product manager, but this is far less common. Overall, many companies choose to have both roles, where the product manager works in the front office while the product owner works in the back office.

3. Do product owners report to product managers?

   Yes, product owners often report to product managers. Product managers are responsible for the product roadmap, and a good roadmap cannot be produced without a plethora of information. With that in mind, product owners are responsible for gathering some of the most important information available to teams: customer feedback.

   Though product owners may not always deliver information to product managers directly, it is routine for junior product managers to collect reports from product owners and deliver them to the product manager.

Final Thoughts

While product owners and product managers both play an important role in the success of a company’s product, they are also different professionals with different specialties.

In general, product owners are focused on using scrum to create a product backlog filled with valuable information about customer stories, while product managers research the market and work with their team to develop a vision that can be turned into an effective product roadmap.

In other words, product owners aim to provide the perspective of the customer, while product managers seek to plan the future of the product.

Overall, you can have a successful business, marketing, or IT career with a company whether you pursue a career as a product owner or a product manager. Just keep in mind that the salary, level of leadership, and daily tasks will be different depending on the career you choose.