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What to Do BEFORE You Negotiate


Do you expect to have a discussion (i.e. a negotiation) about compensation in the future? 


  • Perhaps you’ve taken on new responsibilities and your role has changed

  • Or maybe you’re looking for a new job and are surveying the employment hellscape of 2024


Regardless of your situation, if you’re going to talk about compensation, you better have an understanding of what your fair market value is BEFORE you do so.


Otherwise, you’re putting far too much faith in your employer to determine fair pay, and, while there are exceptions to every rule, I tend to find that initial company offers tend to reflect conservative estimates of what your market value is. 


So let’s begin…


How many “yous” are there?


The greater the number of people who have a similar set of skills, experience level, etc., as you — and the more insights into what they earn are available — the higher your confidence can be about what the going compensation is for your position. 


For example, let’s say you’re a recently graduated 22 year old from an ivy league college and you’re looking to make a name for yourself selecting the correct font and corporate logos on an I-Banking pitch deck at 2:00 a.m. (gotta start somewhere — no shade being thrown at entry level jobs here!). 


While you’re definitely exceptional (!!), there is a huge line of folks willing to do this job, as well as a number of companies offering a fairly standard compensation package for this type of position. In this fairly commoditized example, there will be a relatively tight cluster of compensation amounts which can be expected and earned.


From my experience, this entry level job type is the hardest to negotiate but also the most likely to pay consistently. 


On the other hand, let’s say you’re a fairly senior individual with a bespoke set of skills, industry contacts, and experience. You’re not one of a kind per se, but there are fewer folks able to fill this position and also fewer transactions for this role type to draw upon. 


In this instance, it’s more important than ever to seek out non-public information from within your network. The more relevant data points gathered, the more confidently we can extrapolate one’s fair market value. And confidence translates into better outcomes. This is where information and negotiation approach can drive significant value to you. 


Now let’s get specific…


Here are rough negotiation starting points to consider, based on your current job status: 


Happily employed/being pursued 

+15-20% improvement on total compensation 

Employed but looking to exit 

+10-15% improvement of total compensation depending on how fast you’d like to depart 

Not currently employed

+/- 5% of previous total compensation - TBD


If you’ve worked for the same company for a long time, recently been promoted, are changing roles, or are changing industries, the guidance above is less relevant and should be supported by other external sources. 


Now, go get your data!


Data Source 

Pros

Cons 

Your current/most recent compensation 

Readily accessible and highly applicable to you 

Potentially stale info


May not reflect your fair market wage if looking at new industries, roles, etc. 


Should not be considered an infallible source of truth 

The internet (salary.com, glassdoor, LevelsFYI, etc.)

Very easy to access and gather information by industry, geo, company 

Increasingly unreliable as seniority rises and can be stale data 


Less data available for smaller metropolitan areas 

Network

Real people, very specific and applicable information which can be used to extrapolate

Can be uncomfortable to tap into your network for comp guidance 


Reliant on assumption that others extracted fair market value 


Often requires some extrapolation between multiple data points as rarely is somebody a “perfect” substitute. 

 

In practice, you should be using all three sources of data to maximize the amount of data points and information gathered, and thus improve your confidence in your total compensation amount. 


How I can help with this process


My favorite time to work with clients is early in their job search so that we can nail down their expected compensation range and have a grounded expectation around what they should be paid. I use the framework above and help them gather and extrapolate data, then with this information, we use the remainder of the interview/negotiation process to improve our position along this continuum… and get the compensation they deserve. 


If you’re having a hard time gathering data — whether that’s because you have a highly unique skill set, or you simply don’t have the time or interest to do the research — I can help. 



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