One of the biggest challenges I have had in my career is the subject of compensation. For most of my career, I accepted what was given to me, trusting my manager to fight for me. The reality is that while managers try to be fair, they also want to pay the amount that keeps you “satisfied” while not overpaying you compared to the market and your peer group. So a couple of lessons learned:
- When you’re switching jobs or companies is usually when you can get the biggest jump in compensation. Most hiring managers understand you’re looking for an increase, not a lateral move. If they are paying you the same you would be making at your current job, you really have to weigh the pros and cons and where your risk is….do you have more risk staying or moving? Are you overpaid in your current role? Is the role still worth it?
- Always have a range in mind: what’s the absolute minimum you’d accept, and what you’re aiming for. The minimum is the personal trigger for you to “potentially walk away” because the deal’s not worth it. It’s good to figure this out early, not while you’re negotiating. If the compensation changes significantly (e.g. more bonus than base) make sure you’re talking to your significant other if it means lifestyle changes.
- If there is someone you trust to help coach you, use them. The biggest increase I ever got was with someone from the inside who was coaching me on what was possible. Here’s the litmus test I’d use on who to confide to: “Would this person be genuinely happy if I received the maximum I could get?”
- If you will be getting a bonus, you will usually be pro-rated…meaning the bonus will be adjusted for the time you have worked at the new firm unless you negotiate to be kept “whole”. This is often where sign on bonuses are used so that you aren’t negatively impacted by the move. I can’t tell you how many people forget this part.
- If you’re happy with your current job, but not happy with your pay, it’s a good idea to have the conversation with your manager before those decisions are being made…usually at year end. For instance, a conversation such as “I really like this role and I’m learning a lot, but I would appreciate any help on increasing my base/bonus.” Explain why you feel this way…maybe you have been held flat for the last few years while your contribution has increased. At the very least, your manager will know that compensation is important to you.