Compensation Negotiation: Understanding Your Value


You must be prepared to answer compensation-related questions before you start interviewing. Unfortunately, these are not always easy questions to answer. By gathering information from these sources, you should be able to come up with a salary range and compensation package needs and wants to use if these questions are brought up during an interview, during negotiation process, or when requesting a raise.

what_should_be_in_an_executive_employment_contractCurrent Compensation

One of the primary factors that will gauge your value to your next employer is your current compensation. Figure out the total monetary value of your current compensation and benefits, and of any payments you will lose by leaving your employer (such as this year’s bonuses). Then, consider how this differs from the compensation increase you want or need. You’ll also want to consider which benefits and perks (medical insurance, dental coverage, etc.) are necessary or desired.

New Role Responsibilities

If your role is a step up, rather than a lateral move, you will have higher value to the hiring organization. Will you have more responsibility? Will you manage a larger team? Will you have P&L responsibility? Consider the added responsibilities and requirements of your new role when creating your target compensation range.

Industry, Function, and Geographic Area

Your compensation level can be highly impacted by the industry, function, and geographic area you work in. When considering compensation based on your geographic location, you should ask yourself:

  • Am I in the top location for my industry?
  • What commute am I willing to make?
  • Do I want to move to a new location?
  • What location is most suitable for my personal/family life?
  • Would I prefer to telecommute?

When considering compensation based on your industry and function, your country government might have useful labor statistics related to trends by industry. For example, in the USA, the Bureau of Labor Statistics publishes information on unemployment rates, employment by occupation, salaries, and more. Ask yourself:

  • Are executives in my industry and function in high demand?
  • Am I in a developing or deteriorating industry?

Online Resources and Salary Benchmarking Tools

As you research your compensation, you’ll find it useful to look into various types of online resources as a way to benchmark your desired range. Some of these include trade or professional associations, executive-level websites, or magazines, several of which publish annual salary surveys. In addition, public filings, such as proxy statements, and sites like Equilar.com, Salary.com, SalaryExpert.com, and Glassdoor.com, will provide compensation data for specific companies, functions, locations, etc.

Environmental Challenges

The current economic market not only impacts the availability of executive positions, but it also can influence the compensation raise you’ll be able to earn. When the job market is crowded, you may have difficulty obtaining a position if your compensation requirements are too high. Other challenges that could impact your compensation include very specific location requirements or a recent reorganization at your company. Both of these scenarios could cause you to have a lower perceived value in comparison to other executives vying for the same position.

X factors

Are there any unique factors that give you an edge on your competition for the role? If so, these could help bump your salary range up from the employer’s perspective. Some of these can include:

  • Unique experiences that go beyond what other executives in similar roles may have.
  • A well-developed network that could help you perform your job better than others.
  • Specialized knowledge or skills that could give the employer a competitive advantage.

For more compensation and pay raise tips, download part five of The Ultimate Executive Career Guide.



The Ultimate Executive Career Guide: Compensation Negotiation

As a senior-level executive, you can use this guide to:

- Figure out your compensation value
- Navigate compensation questions during interviews
- Strategize how you counter and accept employment offers
- Negotiate a pay raise from your current employer
- And more!

Download Now!

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