Negotiating Compensation - The "Experts" Are Misleading You

I have seen a disturbing surge in awful, counterproductive advice around salary negotiation on some very reputable websites recently.  The main premise of most seems to suggest that employers/hiring managers/recruiters are all operating from some nefarious playbook – and are all conspiring to make sure candidates are paid as little as possible.  They are written from such a cynical point of view that they border on paranoid.  They often advise candidates to either refuse to reveal their current comp packages (which can only come across as cagey) and/or to refuse to discuss compensation expectations whatsoever (which can only be perceived as avoidant immaturity).

 The sources of this advice, I find to be quite revealing: “life coaches”, “wealth advisors”, or “career coaches”.  The common thread in those giving the advice – they have no experience hiring people in corporate America – as either recruiters or hiring managers.  Instead, they seem to be projecting some of their own negative, personal experiences as candidates onto everyone else.

My perspective is informed by the 16 years I’ve been in the search industry – with 13 of those years managing hundreds of healthcare executive negotiations for organizations with annual operating revenues ranging from $40 million to $73 billion.  These organizations are spread throughout the U.S. and include Fortune 100 firms as well as privately-held and not-for-profit organizations.

Discussing salary and compensation expectations during the hiring process is something that any mature professional should be able to navigate.  Quite simply, there’s no trick, no mystery.  Companies don’t pick compensation packages out of thin air – they have salary ranges that are budgeted; the bonus & equity offerings often have required Board approval and are essentially set in stone.  Most organizations, to ensure that they are competitive, hire employee benefits consulting firms to provide industry-wide, detailed salary & benefits surveys.  These surveys are exhaustive and comprehensive.  It is the job of hiring managers & talent acquisition leaders to use all of the above guidance to make competitive compensation offers to prospective candidates.

If you suspect the company you’re negotiating with is trying to “low-ball” you, then you should seriously question the values & pedigree of the organization.  Do you really want to work for a short-sighted hiring manager who’d risk losing a key hire over a few percentage points in compensation? 

So, that’s the company perspective.  What about the candidate’s point of view?  The appropriate answer to the compensation question is:  here’s where I am now and here’s where I’d like to be and why.  Sure, you can add in that money is not the primary motivator for good measure (as long as that’s true). 

The key part of the above is the “why”.  That’s where these “life coaches” really tend to fall down in their reasoning.  As an accomplished professional you should be able to effectively make the case for the salary and total comp package you’re seeking.  Part of that may be based on your earnings history.  But, you might also need to point out that your current comp is particularly depressed because of certain circumstances.   Or you may need to point out that if you stayed with your current employer and took the next logical promotion, you’d be making X% more in the next year or so.  Or maybe that the other organizations with whom you are interviewing are in the range you’ve outlined.  More importantly, you need to be able to clearly and specifically outline the value you will bring to your prospective employer.  How will your experience allow you to impact the organization’s bottom line in year 1, year 2, etc.?  Cite specific examples of the impact you’ve had on your current organization’s profitability in recent years.

Now your prospective employer has all of that information on which to base an offer – as well as all of their clearly defined internal parameters.  They can agree or disagree with your reasoning.  They could agree completely but, simply not have the resources to meet your expectations.  We’re all professionals.  If that’s the case, we agree to amicably part ways.  They could disagree and push back based on the compensation surveys they’ve reviewed.  That’s fine, too.  As long as your reasoning is sound and your expectations are market-based, you can simply agree to disagree and walk away. 

Yes, candidates should strive to maximize their value during compensation negotiations.  Yes, there are some employers – a very, very small minority in my experience – who may not negotiate in good faith.  And, yes, oh yes, I know there’s a small group of “snake oil salesman” recruiters out there who give the rest of us a bad reputation.  Bottom line: negotiating salary is not like buying a car or buying a house.  That is, when negotiating salary, the individuals you’re interacting with are your prospective future boss and colleagues.  You’ll have to work with these people – sure, you got $5K more but, based on how you handled the negotiation, you’ve risked permanently and negatively impacting your professional reputation.  So, no need to be cagey – no need to assume everyone’s out to get you.  Be prepared with a well-thought out, fact-based justification for your expectations.  Handle the process like the mature, confident professional you are, and more often than not, everything will work out as it should. 

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? Steve McGovern and Executive Search Insights, 2016. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Steve McGovern and Executive Search Insights with appropriate and specific direction to the original content.?