6 Tips on How to Discuss & Negotiate Salary / Compensation
By: Jon Piggins, Director of Business Development
The Pay Equity & Salary History regulations that are being adopted by more cities & states are making the discussion around compensation a bit tricky. Back in the “old days” a recruiter or company would simply ask “How much are you making now?” and even request W2’s to support the figures provided. The questions you’ll most likely get today are “What are your salary/compensation expectations” or “what sort of compensation range would you need to consider making a move?”.
While laws surrounding the topic of compensation are well intentioned as an effort to chip away at pay inequity, they have created a bit of ambiguity around the subject. As recruiters, we talk to candidates & companies about compensation all the time and here are some recommendations to help you navigate the matter, with recruiters, hiring companies or even your current employer.
Do your homework & Educate yourself on the market: There are plenty of compensation surveys & calculators out there…here are a few common ones we often share with our clients & candidates.
https://www.dice.com/salary-calculator
https://www.payscale.com/salary-calculator
https://www.glassdoor.com/Salaries/know-your-worth.htm
https://hired.com/salary-calculator
Ask your recruiter: There are times when our clients have asked us to leave compensation open, but we try to nail it down to at least a range. You can also ask your recruiter…we spend every day talking to candidates, companies & each other about the current market, so any good recruiter should be able to give you a realistic estimate of someone with your experience, education, etc. is making these days…and don’t let initial figures rule anything out. We recently had a company peg their comp range at $170-$180k/yr & wound up offering someone well over $200k, but they were able to justify it because of how much our candidate was brining to the table (essentially a hire & a half).
Flip it: A great way to deal with questions surrounding your compensation expectations is to turn it back on your interviewer. Something like, “If it turns out that I’m the person you hire for this position, I’m sure we’d be able to reach a mutually agreeable salary, as I’m willing to be flexible. Can you give me an idea as to what the budgeted salary range is?” You’re not trying to be evasive, you’re establishing even footing & looking to have an open discussion around compensations…plus it frames things well, that you’re optimistic you’ll be able to figure things out if it turns out that there’s a fit and mutual interest.
OK, you’ve made it past the initial “How much do you (want to) make?” and “What does the position pay?” stage and we’re moving in the direction of an offer…here are some tips to help you across the finish line.
Provide context, your “why”: Its one thing to say “I need $180k to even look at something new.” Vs. “I’m really interested in what ABC Company is doing, but I’m currently at $180k with 2 kids in college & a mortgage in Mountain View, plus my Mom just moved in & we’re helping to take care of her until we find a more permanent option.”. Explaining your “why” gives context and humanizes things, so don’t be afraid to share some insight into what’s driving your compensations expectations and needs.
Be Flexible: Beyond cash, what else is important to you? e.g. Benefits, RSU’s/stock/options, opportunity, track record of the founders (have they had successful exits?), commute? Don’t forget to take a holistic view of the compensation package. We have many clients who work hard to not just remain competitive in the marketplace from a cash standpoint, but go above & beyond by offering benefits like; school or home loan pay downs, 529 education fund donations for employee’s children, and mandatory paid vacations.
Leverage (how to use it properly), “If-Then”: Another mistake we see is when people simply keep asking for more money to see if they can get it. Assuming you’re interested in potentially working at a company, figure out what you’d need to work there, and quantify your needs. Help your potential employer by giving them something when you’re asking them for more money, benefits, stock…it means a lot more to be able to extend and “If – Then” commitment vs. “can you increase the offer?”. It’s reciprocal, you’re giving your commitment in return for their increased offer, plus it gives your hiring manager the internal leverage to get approval for the increase…they’re not just asking for money, they’re guaranteeing a hire if the increase is approved. It goes something like this; “Based on our conversations, I believe I’ll be a good fit at “ABC Company” because of (X, Y, and Z). I know this position was slated for $150k/yr, that’s currently what I’m making. My expectation when I started looking for a new position was at least a 10% bump and if we can get to that I’m ready to give my notice, decline any counter offer & start within 2-3 weeks.”
Be Realistic: the Curse of the “Golden Handcuffs”: We get people coming out of the “FANGS” or other large, well established tech companies with deep pockets who say they’re bored & want in on the exciting startup world, but they want to have their cake & eat it too…they still want $350k/yr from a 20 person Series A company where the founders haven’t pulled a paycheck for 6 months. There’s a happy medium that needs to be reached & you have to be realistic about the risk-reward…and big companies aren’t always less risky. A quick way to fix a bad quarter or two @ a big company is to lay off a few thousand employees, especially the expensive ones.
The subject of compensation can be a touchy one and it isn’t something that most people deal with on a regular basis. However, there are plenty of ways the topic can be managed from initial conversations through to an offer. If you have any questions, or could use some help navigating the subject of “money”, please feel free to CONTACT US.