…So I’d normally use this Monday space to share my ‘quote of the week’ 1… but to be honest the focus for this week is ‘staying sharp/going deep’, and I’ve done that post a half dozen times before.
…Instead, let’s talk about compensation – specifically how to negotiate the biggest possible salary in your next job. I initially got into HR because I am just a little too fascinated by the subject of compensation, and I’m going through a phase right now where I’m spending an awful lot of time developing competencies around it. As such, this post is really timely.
So here we go: As always, please remember that any advice I give here is based on anecdotes from others in my profession coupled with my own meandering experience(s). Review it in that context:
1. If possible, hold off on your comp ask until you’ve done an on-site interview.
^And really, the later you disclose your comp ask in the process the better. This is because the deeper you advance into an interview process the more the hiring team wants you – which equals leverage. Most companies will ask you what you make and/or what you are looking to make during the initial phone screen (or at some point prior to doing an onsite).
This is because they (i) want to know if your ask is within their salary range and (ii) current earnings and comp ask are generally a good screening mechanism to assess qualifications (e.g. if a company is interviewing for a Director level role at a large cap company and your current earnings are, say, $55k, you probably aren’t qualified). And so companies will ask you for your salary history and current earnings (even giving up the anchor point here) because if your comp ask is too high or your current earnings too low they can just DQ you… and if not you’ve essentially told the employer what you’re willing to work for (your current salary) and what you’re willing to leave for (which will fit into their comp structure or else they’ll move on/DQ you).
^The interesting thing here though is that the more a company wants you, the more leverage you have. For example, if your ask is over the range and it’s a first round screen you may just get DQed (or told you are outside the range and asked for a lower number 2), but if you have advanced to the point in the interview process where the company really wants you then you have leverage. In such a case, if you have a comp ask that is outside the range then it becomes an anchor point from which the negotiation starts (as opposed to a tool to assess your viability for the role).
…I could talk about this forever… but the big takeaway here is that you should hold out on disclosing current comp/ask for as long as you can. You may have to disclose this earlier than you like if the recruiter/hiring manager insist… but if there is a path to push back/defer here then take it (keep things general for as long as you can).
2. Have a BATNA (Best Alternative to a Negotiated Agreement).
^This isn’t always possible (e.g. sometimes you’re unemployed or just have one job offer or whatever). But the ability to walk away is (after bullet #1) the greatest asset you own in any negotiation. Because anytime a company wants you enough to extend an offer this is always a great thing… but if you don’t have to accept because you have equally appealing alternatives this is an even better position to be in. Good hiring teams will always be interviewing multiple candidates and have multiple plausible applicants to extend offers to for just this reason… they don’t want to be stuck with no leverage if their first-choice candidate says no. But if you have a rare and valuable skill and multiple other alternatives, you are likely to find yourself in at least one situation where you are really well positioned to name the terms of your employment.
^I initially started with a list of six things to maximize your salary during negotiations, but I am at about 800 words already and it’s getting late. But the two things I shared here are the most important things, anyway. Essentially, (i) wait to until a hiring team really wants you before laying that big comp ask on them and (ii) have a viable secondary option to back into if the offer you get isn’t competitive enough.
^Companies generally have an advantage in salary negotiations, but this advantage mainly boils down to the fact that they (i) negotiate offers more often, (ii) have more candidates to choose from than you have employers to choose from, and (iii) have more information than you (market data and data they extract from you during the interview process). But you can eliminate the advantage employers gleam from bullets two and three by (i) casting a wide net when job searching, (ii) having a rare and valuable skill set and (iii) disclosing the information employers want to extract from you at the right time.