Recently, during an evening with friends at the local club, the topic of compensation negotiation emerged as a dominant theme amidst discussions on various topics. It got me thinking and based on an analysis of various pieces of advice doled out by others over the years, and my own research, here’s a dossier on this important aspect of our corporate lives:
Ask! Are you aware that barely one-third of candidates even negotiate? And less than half of internal candidates talk about raises during annual appraisals? While people may have their own inhibitions for not doing so, it’s important to remember the old adage that you miss 100% of the shots you do not take!
It is not a win-lose situation. Many people hold the misconception that a compensation negotiation is a win-lose game between the candidate and the hiring organization by default. What recruiters and candidates need to realize is that they have a common goal – appropriate compensation for the skills and experience of the candidate possesses.
Research. Surprisingly (or maybe not surprisingly!), many people research their upcoming travel destination more than various aspects of their corporate life and career! But for compensation negotiation, you need to do your research—data talks. There’s a plethora of resources out there from salary surveys, websites specializing in compensation, your friends in the recruiting industry to help you become a better informed, prepared candidate.
Qualitative vs. Quantitative. Most executives have a nose for numbers. So, discussions typically revolve around the elasticity of the quantitative part of the compensation package. But, there are plenty of benefits in kind – vacation time, learning opportunities etc. You need to consider the total package, not just the cash component to get a package that best fits your needs.
Timing. As any good tennis player will tell you, you need to win during key moments to be successful. Compensation negotiations should always start after they are convinced you are the right candidate for the role.
Patience. A trait which is increasingly in short supply nowadays! You cannot push a hiring manager into quick decisions. You need to go with the flow. Similarly, take your time once you receive the offer so that you can give a data-backed, well-informed response rather than a quick, impulsive reply so as to avoid later regretting the inevitable omissions from your haste.
The serve vs. counter-serve. Do NOT give the number first. Let the organization make the offer, and you can then state your views and your counter-offer. Ensure you have a number in mind since compensation negotiations are unlikely to be fruitful if you have a maximalist view, without a target!
Don’t lose sight of the big picture. Going beyond compensation, if it is your dream role, do not miss the woods for the trees. I have seen many candidates let go of their dream role because of a firm’s uncompromising stance on an extra perk which the company did not even have in its policy! On the other hand, if the compensation if above and beyond your expectations, but the role is not up your alley, do not take the role. The glamour of high compensation wears away very quickly if you do not enjoy what you do on a day-to-day basis.
Do it yourself. Do NOT have somebody else negotiate for you. Some of my friends in the hiring industry have come across situations where candidates ask for a third party to negotiate on their behalf. If you are not confident of your own negotiating skills, how you can negotiate for the organization? At the senior level, negotiation skills do come into play.
Be flexible. Look at the total package. Policies differ from firm to firm. There’s no point in being headstrong about asking for a benefit, which may the norm at your previous company, when it is not offered to anyone in the new firm. Rather, look at benefits which the new firm offers, instead of focusing on your pervious perks.
Be organized and meticulous. Two highly under-rated traits, when it comes to a compensation negotiation. Since many people do not have a complete list of all their benefits in their current organization, quite often, candidates come up with items they “forgot” even after the hiring manager in the new firm has gone through all the approvals. Be clear about everything so that there is utmost transparency from day one.
Soft aspects. Soft skills are as important as data. Politeness endears you to the hiring manager. Let the person feel that they need to do whatever they can do hire you. Do not issue threats. A friend of mine once asked the candidate, who was the first in the shortlist by a distance, to walk away because he let his ego get the better of him.
Focus on value. Always remember that the firm is hiring for your skills and experience. So, bring them up whenever you can. Personal needs are a no-no. The new firm’s role is to compensate for your professional expertise, not to cater to your personal demands. Prioritize your requests based on value. And, lastly, do not forget to listen carefully to the hiring manager rather than thinking about what you are going to say!
My parting advice – often, you do not necessarily get what you deserve but what you negotiate. So, go ahead and do it well!