Topic: salary negotiation

Are Salary Ranges Total B.S.?

Marketing Headhunter Harry Joiner seems to think so. And he has several great questions he recommends asking a recruiter when assessing the earning potential for a position including:

  1. What did the last guy make?
  2. Does the company feel like the last guy was underpaid or overpaid?
  3. Why did the previous guy leave?
  4. What did he make in his new job elsewhere?
  5. Are there any internal candidates under consideration for the position?

Marketing Headhunter compares the job search market to the real estate market. Every employer wants the $220K candidate for $170 just like every person looking for a new home wants the best deal. Read his post here. It’s an excellent lesson in the art of salary negotiation.

Certainly it’s important to uncover the salary range for a position whenever possible. But knowing the back story on where the previous employee fell into that salary range can improve your chances for negotiating more effectively.

#Job Search Tweet-140 Job Search Nuggets

jobsearchtweet.midI’m excited to announce that my second book, #JobSearchTweet will be released shortly. The book delivers 140 tweet-like tips on just about every aspect of job search. It’s a book that you can read quickly but continue to reference for the duration of your career. Resumes, cover letters, thank you letters, references, recruiters, networking, social media, interviewing, and salary negotiation are all addressed. Here’s a sneak peak at a few of the tweets.

  • When writing a resume, include graduation dates; omitting them raises suspicion and calls more attention to the very thing you are trying to hide.
  • Half of hiring managers read cover letters and the other half do not; but you never know which half you are dealing with so always send one when applying for an open position.
  • Have a phone interview? Sit in front of a mirror to anchor you during the conversation and make you feel like you are talking to someone (even if that someone is yourself!)
  • When networking, ask people you meet a lot of questions about themselves. People think you are a great conversationalist when you let them do most of the talking.
  • With traditional networking you can only be in one place at a time; with online networking you can be interacting in multiple communities simultaneously.
  • The negotiation process begins the moment you submit your resume and continues until the offer is finalized. You can’t position yourself at one level on the resume and expect to be compensated at a higher level later on.

Interested in the other 134 tweets? Learn more about the book here and for more job search tips follow the #jobsearchtweet hashtag on Twitter.

Age Discrimination and Job Search: Who Made the Rules and How Can You Compete?

Rip Van WinkleI don’t think about my age too much. People often tell me that I look younger than I am so I’ve spent most of my adult life trying to look older, not younger. But recently, four events occurred within the same day that forced me to think about age and the perception that age can create.

  • I saw a lead that a major magazine was offering a job search makeover for women between 25 and 45 years old…I did the math and realized that if I had been interested, I wouldn’t be eligible.
  • A colleague posted on Facebook that he was celebrating his 35th birthday. I commented back that I recently celebrated my 35th birthday…for the 11th time.
  • I was exercising and monitoring my recommended heart rate and realized that I fall into the category for the oldest exercisers on the chart.
  • A client listed her work history on her resume back to 1995 and asked if she should remove that information because it was “ancient.” I didn’t even think my teenage kids thought 1995 was ancient history!

So what happened? I went to bed feeling young and woke up feeling old? I had become Rip Van Winkle overnight? How could this be? I think many boomer job seekers face the same dilemma. Age was never a factor in their job search, but now it is. I have heard stories from clients telling me recruiters have told them they are too old for certain positions. Others, who are often several years younger than me just assume they will be discriminated against based on their age. And everyone seems to have a different cut off for what they think “too old” is. Some say 40, others say 50 or 60.

In a job search there are some things we can control and many things we cannot. I always coach my clients to focus on the aspects of the search they can control. And while we can’t control our age or other people’s perceptions about our age, there are proactive steps all job seekers can take to make sure age bias is minimized.

Resume Development

  • Group earlier experience into a category that reads “Additional Experience.” Create an abbreviated overview of the positions you held more than 15 years ago, but include the dates. This allows the hiring manager to focus on more current and more relevant experience. Many people believe that by omitting the dates there is less likelihood that the bias will surface. I think the opposite. When the dates are missing, people wonder why and often assume you are even older than you are. If you chose to leave off certain employment experiences to make you look younger on paper, I say proceed with caution. If you are called in for an interview and it is obvious that you are much older than the information on your resume represents, you run the risk of making the hiring manager believe you are not truthful…not a great way to start out a relationship.
  • While I’m not usually a big fan of a “hobbies” section on a resume, the information displayed there can sometimes offset a potential age bias issue. If you regularly participate in a sport that showcases your active lifestyle, this is something I suggest including. And if you have certain technology skills that prove you are current in your field, I recommend adding that information as well.

Online Identity

Some job seekers believe that by not having a picture on online identity and networking sites, they decrease the chance of being discriminated against. Again, I disagree. If you do not post a picture in communities where they are the norm, people will think you have something to hide. Sometimes people post pictures that are 10-15 years old. Another mistake that could damage your credibility when you meet the person who viewed your profile in person. Your picture is part of your brand. Pay as much attention to it as you would your other marketing collateral. Lighting, makeup, clothing choice, an updated hairstyle, and maybe even a wee bit of photo-shopping (shhh) will help you present your best image while still being transparent and authentic.

Interview Strategy

Sometimes when a hiring authority figures out your age, they draw the conclusion that you command a certain salary and that perhaps they won’t be able to afford you. When interviewing, if you detect this feeling, be sure to be able to discuss your interest in the position, your desire for meaningful work, and your flexibility. This can help the hiring manager to understand that salary in not necessarily your main motivator. The reality is that many older workers are not more expensive; if anything they are often behind market value because of longevity with a previous employer. Large salary bumps generally occur by switching jobs more frequently; not by staying with the same employer over many years. So the very thing the employer is concerned about might actually turn out to be a non-issue. Better to explore the issue than let the hiring manager come to their own, and possibly incorrect, conclusion.

Job Search Research

No one is the right fit for every company. Some companies do have a more youth-oriented culture. But many do not and even tout themselves as best places for boomers or people over 50. AARP publishes a list each year called the Best Employers for Workers Over 50. By targeting the companies that embrace older workers you dramatically decrease the potential for encountering age bias.

Attitude

It sounds so cliche but it is true. If you believe you are old, others will believe it as well. If you refuse to put arbitrary limitations on age you increase the chances that others will reject these notions as well. Focus on the value you can bring to an employer, not the longevity of your career history. Leverage the latest social media technologies such as Twitter and Facebook to stay connected in current conversations. Ditch phrases such as “back in the day” and “when I was your age.” Rewrite the rules.

I take my cues on age from my soon to be 79 year “young” mother. She still wears her hair in a ponytail. She knows more about the hardware and software on her computer than most 25 year olds. She has no major health issues. And she can get away with wearing clothes designed for women more than half her age. So that’s my barometer. What’s yours?

The Skinny on Employee Compensation: It’s Getting Skinnier and What Does That Mean for Job Seekers?

beltOver the past few weeks I’ve been culling information from various compensation surveys, HR Magazine, and presentations by Mercer Consulting and ORC Worldwide to investigate compensation benchmarks for 2009 and trends for 2010.  Here’s what I have learned and what I believe to be the implications for job seekers.

2009/2010: Compensation Data: What’s Up?

According to research conducted by  ORC Worldwide, hiring is up in certain sectors (manufacturing and service), but there are multiple indicators that companies are continuing to be cautious. Top talent recruiting remains a buyer’s market and new hire compensation is still on the decline. In 2009, 29% of companies surveyed implemented salary freezes, 30% had mandatory layoffs, and 29% reported hiring freezes. According to the 2008-2009 SIRS® U.S. Budgets & Structures Surveys, the average salary increase dipped from 3.8 to 2.7 between 2008 and 2009 and 2010 projections are at 3%. Salary increases outside of the U.S. are following a similar pattern. ORC data suggests that in this tough economy, companies need to “do incentives right” to manage program objectives and employee engagement.

Implications for Job Seekers

We know it’s a tight labor market but sometimes knowing the statistics can help give you the push you need to create a more proactive search campaign.  A quick look at these statistics reveals that there are less open jobs to compete for and the importance of defining your unique value proposition and leveraging your network is critical. In addition, given the fact that many companies are experiencing salary freezes, you need to be more strategic in the way you negotiate your compensation package and explore non-monetary or low cost perks over base salary. You will be better prepared to negotiate fair and reasonable packages if you know some of the obstacles on the way in.

Looking to the Future: Compensation Strategies for 2010 and Beyond

According to Mercer’s U.S. Compensation Planning Surveys 2008/09  there is an increasing emphasis on performance differentiation. The performance rating system appears to be applied more cautiously now to make sure there is enough compensation allocated to reward top performers. Fewer employees are falling in the middle of the performance grading scale and more are falling below the midpoint of the salary increase range. Moving forward, the consulting firm suggests keeping employees engaged and being as transparent as possible when communicating company information to keep employees motivated and productive. While salary budgets are tight, employers can benefit from creating career development opportunities to keep employees interested in their work, implementing alternative work arrangements to cut costs, and proactively assessing pay equity in light of the 2009 Ledbetter Act and emerging Paycheck Fairness Act.

Implications for Job Seekers

In some ways this research is good news for job seekers because it shows that more companies are embracing a pay for performance culture and reserving the highest merit increases for the best performers while more carefully scrutinizing the work of average or below average performers. Job seekers have an opportunity to prove their value to a company in a business environment that is already hyper-sensitive to the costs associated with poor performers. Job seekers may find that in this economy, employers are more open to negotiate flex-time, telecommuting, job sharing and other non-traditional work arrangements in their continuous efforts to cut costs. And job seekers may be surprised to find increasing levels of employee engagement through inexpensive but intrinsically valuable rewards programs and career development options.

Recovery on the Horizon?

According to HR Magazine, a Watson Wyatt Worldwide survey of 179 companies reveals that as of last June, the number of respondents who reported that the worst had passed was nearly double the percentage that reported the same sentiments two months earlier. Results from the study show that for 2010, 62% of companies surveyed plan to cancel hiring freezes, 55% who had reduced salaries plan to role them back to previous levels, and 70% expected to start matching employees’ 401 (k) and 403 (b) contributions at pre-recession levels (with more than one-third noting they were unsure when this would occur). However many employers expect to see long-term changes in retirement decisions, staff sizes, and health cost-sharing, which will affect compensation strategies.

Implications for Job Seekers

The fourth quarter of 2009 and first quarter of 2010 may reflect an increase in hiring and an improvement in salary offers and certain employee perks. Employers may be more willing to hire and reward high performers because it costs less to maintain good talent with retention strategies than it does to attract new talent.

While these observations and statistics don’t necessarily represent every company and every industry, they do offer a glimpse into some marketplace trends and present job seekers with an opportunity to be more informed as they navigate their job search.

Salary Negotiation Words to Lose and Use

negotiation fightI recently saw Sam Horn, author of “Create the Perfect Pitch, Title, and Tagline for Anything” at the NRWA conference. Sam talked about the power of words when presenting ideas and discussed what she called “words to lose” and “words to use.” I started thinking about the importance of dropping “losing” words from salary negotiation conversations and replacing them with winning words to preserve the relationship the job seeker has tried so hard to build during the interview and ultimately land the job. Most negotiations fall apart because of the way job seekers ask for things, not because what they are asking for is unreasonable.  Consider these words to lose and words to use:

replace “but” with “and”

I am very interested in your open position, but the salary is too low.

I am very interested in your open position and I would like to discuss the opportunity to negotiate the compensation package.

The word “but” cuts people off while the word “and” suggests continuing the conversation to find resolution.

replace “you need to” with “if you could”

In order for me to consider this position you will need to increase the signing bonus.

If you could increase the signing bonus, I would be very interested in your offer.

The words “you need to” suggest an order while “if you could” suggests working collaboratively to find a solution.

replace “can’t, because” with “sure, as soon as”

I can’t accept the current offer because the amount of stock you are offering is too low.

I am eager to accept the offer as soon as we negotiate certain aspects of the package such as the stock options.

The words “can’t because” suggest an obstacle while the words “as soon as” suggest that there is a way to bypass the issue with the other person’s help.

replace “no way” with “I hope”

There’s no way I can accept this offer given the current commission structure.

I hope there is room to negotiate the current commission structure.

The words “no way” suggest finality while the words “I hope” leave the door open for more conversation.

What words do you need to lose from your negotiation conversations?

Job Seekers-What Could You Live Without?

milk and cookiesMy teenage son has been allergic to milk products his entire life. His reaction is pretty intense…immediate vomiting, drop in blood pressure, turning white as a ghost…all from a thimble-full of milk or a bite of cheese.  He is part of an allergy research study group and every year he spends a day in the hospital ingesting tiny amounts of milk and being observed, poked, and prodded for hours. And every year after a very overwhelming and unpleasant reaction, it is determined that he is still quite allergic. Today he went for his annual milk challenge at the hospital.

I have a ritual with him before each milk challenge where I speak directly to his stomach and say “Do not fear the cheese” (because he was given a piece of string cheese during his first milk challenge when he was two years old). I  joke that maybe if we could talk to those crazy people inside his stomach that think milk products are harmful, we could convince them they are not. And even though he now thinks this ritual is quite ridiculous, he acquiesces because he knows how happy it would make  me to see him enjoy a cheeseburger or an ice cream cone.

But his take on his allergies is entirely different. Since he has never been able to have milk or milk products before, he has acquired tastes for the things he can eat. He can have a frozen desert made of soy instead of ice cream or a fruit-based piece of candy instead of milk chocolate. For him, it’s just life as he has always known it and he doesn’t seem to care all that much if a pint of Ben & Jerry’s is in his future.

My son makes compromises every day without even realizing that he is making compromises. Today, this realization made me think about job seekers who often get frustrated if they can’t get a package that is similar to the one they had in their last job.  The issue may be anything from a lower compensation package, a shift to a less glamorous industry, or a smaller expense account. We often base our expectations for what we want on what we had before and perhaps even took for granted. But if we never had those things as a point of reference, it wouldn’t be as devastating to give them up. If we could shift our mindset to realize that there may be a substitute for something we can’t have in our next job, maybe the job would look more appealing.

So if you are currently in search or negotiating an offer, concentrate on how you can put together a package that will be satisfying now, in this new economy, rather than the one that existed in your last job. Think about what points you are willing to compromise on and what things you could live without. Because even if you are giving some things up if you take a certain position, you may be getting something of equal or greater value in return. Maybe it’s a shorter commute, a more flexible work schedule, or a unique perk. Maybe one job offer is not better or worse; just different.

After six long hours of testing today, the doctors once again concluded that my son has still not outgrown his allergy to milk and  needs to continue to avoid milk products in his daily diet. We joked that apparently his body still “fears the cheese” despite my counsel hours earlier. But while my son must continue to avoid dairy products, he has gained many life lessons in return because of his allergy including patience, persistence, flexibility, empathy for others with particular limitations, and the ability to compromise.

So in your job search, ask yourself what you could live without it you had to and what you in turn could gain from your compromise.

Salary Negotiation: How Much Are You Worth?

moneyI recently sat down with Jennifer Loftus, National Director for Astron Solutions. Jennifer develops, designs, and implements base pay compensation systems and she is an active member of SHRM’s Total Rewards Special Expertise panel. I asked her some of the questions job seekers often have about compensation and her responses should be required reading for anyone looking to better manage the salary negotiation conversation with prospective employers.

What resources or strategies do you recommend to help job seekers benchmark their value in the workplace?

Benchmarking a position’s value isn’t easy!  There’s lots of information out there.  The hard part is knowing what to focus on and what to ignore.

Job seekers should look to compensation data provided by their industry association to determine their personal value.  The Bureau of Labor Statistics is another potential source of information regarding compensation and benefits.  Many times, individuals rely on free sources of salary data they find on the Internet.  Internet-based sources often lack credibility.  They may present data without thoroughly analyzing for quality control issues.  Also, individuals – rather than employers – often report data to these sites, which can result in inflated salary figures.

When establishing your own job value, don’t lock yourself into a specific pay rate, such as $75,000 a year.  Rather, consider a pay range, such as $65,000 to $85,000, to give yourself the greatest opportunities.  Additionally, always keep a total rewards perspective.  Total rewards means that you as an employee receive more than your paycheck from your employer.  There are 5 elements of total rewards – cash compensation, benefits, work/life balance, career advancement and development, and performance management and recognition.  Consider your personal value in terms of all 5 of these elements, and their importance to you, before turning down a job offer where you think the salary is too low.

Additionally, always keep in mind that most organizations have a unique compensation philosophy.  For instance, some organizations want to be the top payer in Miami, FL.  Others want to be a middle of the road payer for engineering firms in Manhattan.  Another may be a low payer in Denver with robust benefits.  If you receive an offer that seems low, consider your personal compensation philosophy against the organization’s.  Salaries can vary widely between locations and industries.  Also consider the total rewards approach to see if your philosophy and the organization’s end up with the same total package at the end.

Are salaries trending downward?

It may appear that salaries are trending downward, due to layoffs.  Particularly in organizations laying off longer service employees or providing early retirement, average salaries for specific jobs may be lower.  However, we typically don’t see salaries permanently dropping in terms of real dollars over time.  Organizations very rarely lower their starting pay rates or salary ranges.

What industries are experiencing growth and are more likely to offer competitive salaries?

When you look for growth, think of industries that have to exist.  Healthcare and educational institutions are two that stand out.  Unfortunately, people will continue to need healthcare services.  Education is a key to success.  Both industries have weathered the recent economic storms better than others and continue to offer strong total rewards programs.  As for the competitive nature of the salaries they offer, non-profit organizations dominate both industries.  As such, their salaries overall may be lower than those found in for-profit industries such as banking, consulting, and high technology.  Although the pay rates in these industries may be lower, however, those rates have also been more stable than those of other industries.

Are there certain geographies in the country where job seekers are more likely to negotiate a better offer?

Job seekers are more likely to negotiate better offers in areas of the country with less recessionary impact.  For example, upstate New York took less of a direct hit than Wall Street in Manhattan when the economy shifted dramatically.  Additionally, locations that have typically had challenges in attracting and retaining talent – think climate extremes or areas that are harder to get to – also afford more negotiation opportunity.

What is the average cost of a benefits package per employee? Is it reasonable to try to negotiate fewer benefits in exchange for additional compensation?

In total, benefits typically run about 40% of base pay.  This figure includes both voluntary benefits, such as health insurance, vacation time, and retirement plan contributions, as well as mandatory benefits, such as social security, unemployment coverage, and worker’s compensation programs.  Voluntary benefits are typically 20% of base pay, mandatory benefits another 20%.  As an example, a person earning $50,000 would on average receive voluntary benefits worth $10,000 and mandatory benefits coverage worth another $10,000, for a total compensation package of $70,000.

Job seekers could try to negotiate lesser benefits in exchange for additional compensation.  Typically, however, employers provide benefits packages on a group basis.  This group approach often doesn’t afford negotiating flexibility to employers.  Customized benefits packages is a trend I expect to see more of moving forward.  Currently, however, individuals may have more success negotiating in the opposite direction – less compensation for more benefits.

What is the average merit increase for 2009? What other types of financial incentives can job seekers negotiate outside of base compensation?

Great timing on this question!  WorldatWork just released the results of the 2009 – 2010 Salary Budget Survey, which reports summary data from 2,743 organizations across the US and Canada.  According to WorldatWork, the average merit increase budget for 2010 is 2.8%.  If you remove all the zero increase budgets, or organizations that aren’t providing a merit increase in 2010, the average budget goes up slightly to 3.2%.  Those zeros are important – up to 43% of organizations are freezing pay for some or all of their employees in 2010.

Given the dramatic changes in the economy, I expect that organizations will begin to phase out merit pay.  Variable compensation will become an even more important part of employees’ total compensation.  Job seekers today can demonstrate their commitment to their potential employers’ success, and their own personal return on investment (ROI), by focusing negotiations away from base pay increases and towards bonus and incentive opportunities.  Job seekers can also turn to negotiating for additional benefits to build their total compensation package.

Is a signing bonus ever offered to a job seeker who is not leaving one employer to go to another? If so, describe a situation where a company would offer a candidate without a job to fall back on a sign on bonus?

Oh, yes!  Signing bonuses are not only for people who are changing jobs.  Many times healthcare organizations will offer signing bonuses to new graduate nurses and new graduates in other allied health fields where there is a shortage of talent.  With many employers competing for a handful of graduates, the competition among employers can be stiff.  I have also seen these types of signing bonuses used in the IT field.  The lack of talent and specialized knowledge in the market drives competitive employers to use signing bonuses and other lucrative attraction and retention techniques.

I see more job postings that state relocation is not available. Is this truly the case and what circumstances would warrant relocation assistance?

I too have heard that the number of relocations are down for a variety of reasons.  First, relocation can be costly.  With more local job seekers available due to the economy, the argument for relocation becomes less compelling.  If an organization can hire someone local with the same skill set as someone from far away, the organization would rather pay $0 to bring the new hire on board than the thousands of dollars associated with relocations.  Additionally, the organization bares a risk when relocating an employee.  If the individual doesn’t work out, or changes jobs relatively soon, the organization has incurred a large expense with minimal ROI.

When would relocation make sense?  Relocation is a viable option if the candidate has unique job skills that are in demand by the organization or has a book of business or a powerful network they’re bringing to the organization.  Additionally, if a position has been vacant for quite some time, it may be less expensive to relocate someone than to have vacancy cost dollars impacting the organization’s bottom line.

For more advice on compensation trends, job search, and career management check out Aston Solution’s blog Welcome the the World of HR or follow them on Twitter.

Being a Mom is a Six-Figure Job

houseworkIn honor of Mother’s Day I just checked out Salary.com’s salary calculator for moms. Salary.com valuated the “mom job” of both the working and stay-at-home moms and based on a survey of more than 12,000 mothers, Salary.com determined that the time mothers spend performing 10 typical job functions would equate to an annual salary of $122,732 for a stay-at-home mom. Working moms ‘at-home’ salary is $76,184 in 2009; this is in addition to the salary they earn in the workplace.

The job titles that best matched a mom’s definition of her work are (in order of hours spent per week): housekeeper, day care center teacher, cook, computer operator, facilities manager, van driver, psychologist, laundry machine operator, janitor, and chief executive officer.

That’s a good start for the list of responsibilities but I have a few more…referee (for all that sibling rivalry), child advocate (to deal with the abundance of injustices in most school systems), booking agent (think about all of those playdates), coach (yes, moms coach softball and basketball too), triage specialist (what mom doesn’t carry around a first-aid kit and know the latest splinter removal techniques?), nurse (how many times have you administered meds to your kids?), party planner (I’ve planned dozens of birthday and holiday parties so I think that qualifies me as an expert), costume designer (think of all those school plays), editor (how many of your kid’s research papers have you had to read?), fundraiser (schools always need money), tour guide (what mom among us hasn’t chaperoned a class trip?), and of course, entertainer (moms know that one needs no explanation). Now that’s a long list…I think I am ready for a raise! Happy Mother’s Day!

Sizzling Salary Disclosure Discussions

money.JPGCheck out this great post on salary disclosure from Nick Corocodilis on Ask the Headhunter as well as the 100+ comments around this subject on Laurie Ruettimann’s Punk Rock HR blog. I agree with Nick and Laurie…A candidate’s past salary is not a relevant benchmark for deciding compensation in a future position. The way I see it, hiring managers hold all the cards…they intimately know the job description, salary range, salary of the person who last held the position, and the salaries of their colleagues. If employers expect transparency from candidates, why shouldn’t candidates expect transparency from employers? Hiring managers often claim that they want to know what the candidate made in a previous position so they don’t waste their time pitching a job that is not aligned with the candidate’s salary expectations. If that’s really the case, doesn’t it make sense for the hiring manager to disclose the salary range for the open position first to avoid the candidate’s dance around the salary question?

Career Solvers Twitter Roundup

twitter.JPGWhen I want to get an important piece of job search information out to my readers quickly, I often write a mini blog post on the microblog Twitter. I’ve culled my top ten tweets over recent months and posted them below. If you want to read all my posts on Twitter you can find them here or set up your own account on Twitter and start receiving my updates.

  1. Are you a member of the networking hall of shame? 
  2. Has your interview wardrobe passed its expiration date?
  3. This is why non-competes are so lame. 
  4. Will resume copyrighting be the next big thing? 
  5. 46% of people want to know what salaries their colleagues make but 89% won’t share what they make with colleagues.  
  6. Looking to save some coin? Check out ten financial moves to make now.
  7. Severance benchmarks from Compensation Force.
  8. How to keep your salary up in a down economy.
  9. 37 excellent tips on networking from Job Mob.
  10. Do you have a business card that conveys your brand?