Effective Salary Negotiation
One of the most important and complicated stages of the job search process is salary negotiation.
Robert Hellmann of Hellmann Career Consulting (HCC) recently presented a webinar on effective salary negotiation techniques in which he provides a start-to-finish action plan for managing this vital phase of your job search. A few of his essential points are worth amplifying, though I highly recommend you view the webinar in its entirety.
Timing is an important consideration when it comes to salary negotiation, Hellman says. It is best to negotiate when you are in a power position. So, when are you in a power position relative to your (potential) employer? After they have formally offered you the job — be it an initial position with the company or a new-to-you position — and not before. Note the emphasis on the word “after”: Negotiating on the spot upon receiving the offer does not work to your advantage. For this reason, Hellmann explains how to avoid bringing salary discussions into the earlier stages of mutual evaluation and provides scripting for postponing the negotiation and acceptance conversation. This is not a matter of gamesmanship or toying with the employer, rather it is meant to help you prepare for the discussion by giving you time to gather information and determine your priorities.
Be ready to do significant research in the time leading up to the salary negotiation. Specifically, you need to find out:
- The current market rate for the role you are discussing
- The full value you represent to the organization
- What you are truly willing and able to accept
In determining the market rate, there are a number of websites that provide salary data, but do more than just Google it. Reach out to your professional network. If you have recruiter contacts, ask them for their insights. Consulting with contacts from your professional associations can also yield additional useful information. For example, some peers may be willing to share the ranges they are aware of at their organizations, while others may share their own compensation structure or direct you to locally relevant resources. For example, the CFA Society Minnesota has published a local salary survey and is partnering with other Midwestern CFA societies to expand it.
Determining your full value to an employer is the one element of salary negotiation that should be incorporated into the interviewing process. You can do this by asking if the skills and experience you have will be of value in specific ways to the employer: The example Hellmann offers is that of having experience leading a cross-functional team through a technology conversion. If the firm you are in discussions with anticipates a similar sort of conversion, ask if your previous experience and leadership in such an undertaking would be valuable.
Researching what you are willing and able to live with as compensation is perhaps the easiest part of the process because you have most of the information available to you. And if you have had a professional level role previously, you have a benchmark. The important point here is that it is worth investing the time and energy to organize your thoughts and think carefully about your preferences on the structure of the total compensation. Is tuition assistance more valuable to you than relocation support? Is extra vacation more prized than access to the company’s insurance benefits as part of a severance package?
Finally, engage in the negotiation process with a flexible mindset. Think of and present your requirements in terms of ranges. Assume everything is negotiable but prepare for trade-offs. Most importantly though, remember that the endgame is a fair arrangement with your employer where the terms of your employment — the work you will do, the goals you will accomplish, the metrics that define success, and the way you will be compensated — set you up for long-term achievement.
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All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.
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