In theory, the wealth of information at your disposal should provide you with a substantial advantage when negotiating your salary. However, the reality is far from straightforward. Companies may be less inclined to deviate from their established salary ranges, and you might hesitate to assert your worth for fear of appearing unreasonable.
So, how should you approach salary discussions in this new era governed by pay transparency laws? What’s the most effective strategy for advocating for your compensation in cases where the pay spectrum is exceptionally wide? And, should you opt for a direct or more nuanced approach?
- 1 Insights from Experts
- 2 Harness your newfound empowerment.
- 3 Conduct thorough research.
- 4 Navigate the process astutely.
- 5 Present your case persuasively…
- 6 …and rise to the occasion if aiming high.
- 7 Steer clear of the fairness narrative; instead, focus on mutual interests.
- 8 Key Principles to RememberDo
- 9 Don’t
Insights from Experts
The specifics of pay transparency laws may differ from one jurisdiction to another, but in essence, they require employers to divulge salary-related information, such as pay brackets, in job advertisements and offers. The ultimate aim is to shed light on compensation practices, thereby contributing to the reduction of gender and racial wage disparities.
For job seekers, these laws offer increased agency in salary negotiations, as affirmed by David Buckmaster, author of “Fair Pay,” who has been involved in compensation projects with prominent companies like Nike and Starbucks. In the pre-transparency era, compensation was shrouded in mystery. According to Buckmaster, job candidates remained unaware of the earnings of their counterparts and how companies benchmarked salaries against market standards. He states, “Now, having a defined salary range alleviates some of that uncertainty.”
Nonetheless, this newfound transparency can lead job seekers to fixate excessively on salary at the expense of considering the broader employment package, warns Victoria Medvec, a professor at Northwestern’s Kellogg School of Management and author of “Negotiate Without Fear.” She underscores the importance of evaluating factors like your role, responsibilities, benefits, and flexibility. Here are some strategies to help you navigate these discussions and secure the compensation you deserve.
Harness your newfound empowerment.
According to Medvec, effectively negotiating your salary necessitates not only information but also tact, confidence, and the right mindset. She asserts, “Knowledge is your power, and you now possess an advantage because you are aware of the possibilities.”
While some salary bands may seem excessively broad, they highlight the potency of negotiation. Medvec explains, “This range exists because salary negotiation is a dynamic interplay between the employee and the employer, with some individuals excelling at it.” She emphasizes that it’s not solely about your willingness to request more; it’s also about possessing the information and self-assurance to present your case.
Do not succumb to self-doubt or intimidation, even if a specific figure appears unreachable, advises Buckmaster. For instance, if your current salary is $70,000 and you receive an offer for a role within a range of $100,000 to $150,000, you might hesitate to ask for the top end of the spectrum. However, Buckmaster asserts that your previous salary bears little relevance to what another company is willing to offer, stating, “Your prior earnings are inconsequential.”
Conduct thorough research.
Your objective is to enter negotiations with a clear, realistic understanding of how the employer perceives your market value. Achieving this requires diligent research to determine where you might fall within the company’s publicly disclosed compensation bands—whether at the upper echelon, middle tier, or salary transparency laws.
Buckmaster dispels any notion that, before pay transparency laws existed, HR randomly assigned compensation figures. He reveals a concealed “approval matrix” lying beneath the stated salary range—an aspect invisible to candidates. “Every company has a trigger point that necessitates additional approvals to justify placing someone at the pinnacle of the range,” he clarifies. Rather than feeling disheartened, use this insight to construct a compelling case. Explore job search platforms such as Glassdoor, Ladders, and Salary.com, and engage with recruiters and industry peers. Take an honest assessment of your experience and qualifications, placing greater emphasis on your actual job level and the scope of your past responsibilities. “Downplay titles; being a director at a startup is not equivalent to being one at a large corporation,” Buckmaster advises.
Though not universal or many negotiation about salary transpire after the company extends a job offer. If you believe your compensation should align with the high end of the range, Buckmaster suggests signaling your salary expectations earlier in the process. He recommends phrasing like, “I anticipate reviewing the offer and trust that my starting position within your pay range will correlate with my extensive experience in this role at XYZ company.”
Once an offer is extended, the window for negotiation is typically narrow. Buckmaster cautions against making repeated requests, as it may tarnish your reputation. He advises delivering a concise, compelling, and reasonable argument. “Most companies prefer straightforward, uncomplicated negotiations with their candidates,” he notes.
Present your case persuasively…
Securing a higher salary demands a clear articulation of why you merit it. Medvec suggests highlighting your differentiators: your background, skill set, and unique capabilities that align with the company’s needs. While you’ve already outlined your past achievements during the hiring process, it’s now time to project how you’ll contribute in the future—and how this should be reflected in your compensation.
Medvec recommends detailing how you will contribute to the company’s revenue growth, cost reduction, talent attraction, or entry into new markets. “Describe your specific role and responsibilities, including the tasks you’ll be handling,” she advises. Identifying how you’ll address the organization’s challenges positions you favorably.
Factor in the approval matrix, adds Buckmaster. “Assist the recruiter in presenting your case internally,” he suggests. “Support your arguments with solid business-oriented reasoning to facilitate approval.”
…and rise to the occasion if aiming high.
While negotiating above the stated pay range is feasible, your case must be airtight. Buckmaster indicates that many companies are comfortable with approximately 5% of their workforce earning above the maximum salary. Pay bands are not an exact science, and “occasionally, individuals surpass the system and secure higher salaries,” he observes. This can transpire for various reasons; perhaps the new hire is joining a smaller firm, has a manager akin to a peer, possesses specialized skills, or wields esoteric coding knowledge the company requires. “Or it might be that they possess exceptional, hard-to-find talents,” he elaborates.
However, a word of caution: If your salary exceeds the maximum, you may become ineligible for future salary increases. Therefore, it’s essential to inquire about the company’s policies. For senior positions, Medvec recommends consulting an employment attorney in the city where the company is headquartered. “Discover not just what others request, but also the details of their contracts, including stock options, equity, and employment guarantees,” she advises. “While it may be a costly half-hour, it is well worth it for senior-level positions.”
Steer clear of the fairness narrative; instead, focus on mutual interests.
While pay transparency laws were enacted to promote equitable compensation, it is unwise to base your individual negotiation on notions of fairness, according to Medvec. She advises against constructing an argument solely on what’s just or fair. Rather, she recommends referencing publicly available salary data to anchor your request, all while maintaining the conversation’s focus on the employer’s interests.
For example, Medvec suggests stating something along these lines: “I’m aware, based on publicly accessible information, that this position can pay up to $190,000. I believe I belong at the upper end of that salary range due to my unique qualifications in XYZ, and I’m confident in the value I bring. However, I’m also amenable to a base salary of $160,000 with an annual bonus of $50,000 upon achieving objectives important to your organization.” This approach ensures that you make strategic concessions that benefit both you and the company.
Key Principles to Remember
- Embrace your newfound advantage; pay transparency equips you with knowledge about what’s attainable.
- Allocate time for thorough research to build a compelling case for your desired salary.
- Present your argument in a way that enables the recruiter to advocate for you effectively within the organization.
- Doubt yourself, even when faced with seemingly unattainable figures. If you believe you’re worth it, make a compelling and rational case.
- Dwell on notions of fairness or righteousness; instead, center the conversation on shared interests between you and the employer.
- Assume unlimited negotiating flexibility; companies typically follow established processes and prefer efficient, straightforward negotiations.