The Salary Negotiation
Even the phrase has a negative connotation. When I see negotiation, I visualize a game of tug of war and the back and forth between two sides. That’s not a great way to think about your salary. And a tug of war shouldn’t be your mindset for approaching those conversations.
Salary conversations rank in the top three critical conversations that people want to know how to manage, and with the increased movement in the job market, many people are having them more frequently.
Changing companies is the right time to negotiate. Everything is up for discussion, and as the potential hire, you’re in a strong position. Once you’re offered a role, the negotiation of compensation and benefits may shift to a recruiter or an outsider resource who takes some of the awkwardness out of a conversation with a future manager.
You should consider a new role with a good understanding of how a company manages promotions and increases responsibility. When could you expect to take on more? What are the experiences of the peer group you’re joining? Will you be in the top third, middle third or bottom third with regard to skills and experience? What is the average time your peers have been in their roles? These are good questions and fair discussion as you consider a new opportunity.
Think of salaries as one part of a bigger compensation and benefits discussion. Companies negotiate in different ways. Flexibility in a work week, location of a role and mid-year bonuses are all ways a company may enhance a compensation package. If you’re in the market, you should know how your skills are viewed in the marketplace and how comparable roles are being positioned.
And if you make a move, be sure that it’s expanding your role in a way that feels like mobility to you. It may be an increased title and compensation, but it could also be increased responsibility and exposure to a new skill set. Don’t just move for money. It’s hard to take that forward to the next role or next step if what you’re doing hasn’t grown along with your salary.
Those may be the easier salary conversations because it’s an expected part of the hiring process. Just be sure that you’re ready with what matters to you and you have good insight to position it.
But what about the recurring conversations?
You’re with a company that you like and in a culture that you respect, but you just don’t think you’re paid fairly. How do you navigate a conversation about money?
For a conversation that people feel is a critical one, a lot of employees don’t know the basics of how compensation is managed within their companies. From grade levels to salary bands, more than 50% of the people who ask us about these conversations, don’t know how their company manages the process. And that sets you up for the wrong time and the wrong approach.
Learn the basics from your HR team and then consider the following three steps to involve your manager in a discussion.
Make the conversation about more than your salary.
Money is emotional. To an employee, it feels like a quantification of what your work is worth. To a manager, it’s one part of a much bigger picture around roles and responsibilities. Too often, employees think about money as a separate conversation independent of their work and their value to a role.
And that’s a mistake. Money follows value. Change the conversation to what you’re doing, how you’re contributing and talk to your manager about what you’d like to take on next. Increase your role and your value to the company, and the company will increase your compensation.
The easiest time for a company and a manager to increase a salary is when someone adds responsibility and steps into a new role. The hardest time for a company to increase a salary is when nothing has changed….except how you’re feeling about your role.
When you’re asked to take on more or offered a new position, you’ve aligned to the compensation discussion that’s similar to joining a company. Lead with the increased responsibility and value, and then explore and discuss what changes with your compensation package.
Time the conversation from your manager’s perspective.
The biggest disconnect is timing. If you’ve been with a company for a while, you may be relying on your manager to set the timing of a discussion or annual review. But managers view those discussions as resetting their entire team, and they’re working with guidelines that are set across the entire company. Their focus is resetting everyone to current roles, not making significant changes during those conversations.
Your desire to talk about what you do next may hit them too late to consider it. And if your peers were proactive in managing a career discussion, your manager may assume that you’re not as interested as they are in a next step.
I recently ran an assessment as part of a coaching engagement and asked two leaders what they thought the employee wanted to do next. Both replied: “I have no idea. I’ve never thought about what Joe will do next.” And that tells me Joe hasn’t made it known what he wants to explore or take on. And he’ll be frustrated when the manager doesn’t create that opportunity for him.
You have to keep this conversation alive and well-positioned. It’s a conversation about next steps and even two steps down the road. Most managers are very willing to help this process. They just don’t have the time to drive it for you. We’ve talked a lot about taking ownership for your career, and our latest book Disrupted: How to Reset Your Brand and Your Career offers guidance on how to do it.
Know the market and the value of your role.
We’re a little biased against chasing every opportunity that comes your way because we see people follow the wrong things and miss the opportunity to grow their skill sets. A lot has changed in opportunities, and you will move more in your career than you may have considered a decade ago. But what hasn’t changed is skill development. You need to be adding skills and expanding skills in order to increase your value to any company.
And you should stay involved in how your role is valued in the market and within your company. The increased movement has put a lot of information out there in terms of positions available and the salary range of the positions. Stay informed on your skillset. If a recruiter reaches out, it’s worth learning how they got to you and how they thought about your skillset.
Your peer network is also a great way to stay informed on how roles are growing and skills you need to be developing. Keep your manager informed and offer input on how roles are evolving. It helps them think more broadly about skills and development.
But a word of caution. Don’t use the market insight as a way to push negotiation on your manager. Don’t wait until you’re frustrated and feeling stuck to have a conversation about your opportunity and increased responsibility.
Too often, we see an employee leverage another opportunity as a way to force a compensation discussion. This puts a company on the defensive and many will try to “save” you because they don’t want to lose you. They add compensation and even new titles to try and keep you. But both sides resent this tactic within six months. The employee still feels taken advantage of because they had to threaten to leave in order to get what they felt they should have been offered all along. The manager resents it because they feel they’re now paying a premium for a role they weren’t sure you were ready for. And ironically, many of these employees leave anyway within a year.
There’s a much better way to continue to grow in responsibility and compensation.
Take ownership for how you move within a company. Be proactive in talking about where you are today and where you would like to be tomorrow. Focus on the value you can add to the company and involve your manager in helping you plan for the next steps ahead.
Movement within a company and to different companies is a reset we should all expect. And when you begin to think about a value conversation instead of a salary negotiation, compensation joins the conversation easily.
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