Your comp questions answered: the art of negotiationFeatured
Hi Everyone! I'm going to be writing about compensation here each month. A few months ago I asked you what your top compensation questions were. You all shared thoughtful questions, many of which were about compensation negotiation. Last month, I answered questions about stock and equity compensation. Today I’m going to answer questions about negotiating pay from an employee perspective. I'll cover companies and compensation negotiation in a future post.There are typically three times during your tenure with a company that you negotiate for compensation:before you join / the hiring process;during a promotion or role change; andwhen you are thinking about leaving.Of all these scenarios, by far the weakest is when you're thinking about exiting the company. Looking for a competing counter-offer is a game of chicken, and it's one where you have to be ready to walk away. So I'm going to focus on the other two situations in this post.What should I ask about pay during the hiring process, and when?This is probably the most common thing I'm asked, including this specific question from Anonymous.• You can – and should! – ask your recruiter how much a role pays, and I recommend that you ask that earlier in the process if you'd have to make big life changes to take on the role. For example, if there's a relo involved or the role is remote, get the answer earlier in the process. If it's in commuting range, you can get more background information before steeling yourself for the money questions. Keep this in mind: while a recruiter may have salary information, the person doing a technical phone screen likely won't.• Prepare to answer "these are my requirements" with a range. While it's poor form (and in several jurisdictions illegal) to ask for your current pay rate, it is perfectly okay to ask for your requirements. If they ask you the question, don't try to dodge it.Get ready to answer the question by learning about the market. This can give you an idea what the role generally pays, but don't get too attached to a specific number. That's like picking a single day out of an entire year to represent the weather – the climate determines a range, but there's a lot of variety in there. Every company pays different ranges, with different priorities, emphasis, and budget.• Once you get an offer, you can – and should! – ask "where does this offer fall in the range for this role?" Also verify what the expected responsibilities are for the role and level. It may be counterintuitive, but you don't want to be at the very top of the range the day you're hired. That means you get little room to grow without going immediately for a promotion – a big assumption to make before you've even started. But if you're at the bottom of the hiring range, it's important to ask why and understand the intention of that offer.What should I do if the company's pay rates are lower than I am willing to take?Thanks for asking this question, @lucyz!First, be open with your potential employer about your requirements – and if you know there's a big difference do it early. It's unfortunate, but some companies can't pay at the top of the scale. What's more, high-priority roles differ between companies. As an example: in some businesses, legal or sales may command the high-end of market rates, while in others mid-market.Next, be clear with the company about the expectations for the role, and how they tie to pay ranges. What is the difference between this role and the next role above, for example? Are there opportunities to grow and expand your skillset? If they go above band to get you to join, and you agree, don't forget that this creates challenges for future raises. That's another good reason to understand the expectations for both this role and the next.Consider the entire package – wages, bonus, stock, benefits, and intangibles like flexibility. You may be able to negotiate any of these, and don't sleep on sign-on bonuses! Sometimes it's impractical to try to negotiate for recurring salary increases, but a one-time bonus may be easier to swing.What are ways to approach pay increases, especially when facing "budget constraints?"Thanks for asking this excellent question, @HannahBaldovino!I saved this one for last, because in many ways it's the hardest situation. You're already in a role... What if you are looking for a pay increase, but the company says "no" – and they say it's due to "budget" or "this is the job you took?" There aren't a ton of options here, but there are a few strategies.First, you can always ask "what is the pay range for my role?" though companies are not legally required to share it. Yep, they don't have to share it with you, though it's becoming more common. They may tell you, "you're near the top of the range" or "you're in the middle" – or nothing at all.You can also ask if you're not eligible for an increase due to performance targets. Does your most recent perf rating have a ceiling on the amount of raise available? If you had a high rating, are you eligible for a bonus?If you're near the top of the range – or if that's implied – ask about the expectations for your current role and the next role in the career ladder. How far to a promotion – and would that fulfill both your professional and compensation needs?And lastly, are you ready to walk away? This is very hard, but an important question. It's not disloyal to keep an eye on the market, your career, and opportunities to grow. No, I'm not saying you should bounce jobs every six months, but no one will care about your career more than you. Don't count on anyone else – not your manager or HR – to build your future for you.Once you're in a role, it's harder to work through these challenges than before your first day at a company. Before you join, there are so many unknowns. You know the job, you have the lay of the land, and you have a sense about how you're performing. It's nigh impossible to avoid all emotions when you're talking about compensation. Just remember to do your homework, stay calm, and write down your questions ahead of time.