The U.S. Bureau of Labor Statistics reported that almost 4 million Americans walked off their jobs each month in April, May, and June of 2021. After months of flexibility and work-life balance provided by work-from-home arrangements due to COVID-19, employees are rejecting “business as usual” and demanding new working terms.
Monster.com commissioned a survey in June that revealed 92% of respondents were willing to change careers for the right opportunity.
If you are actively looking to jump ship, here are eight things to remember when it’s time to negotiate your employment agreement and compensation package.
FIRST: Never Go First
People don’t get paid what they’re worth. They get paid what they negotiate.
Generally, in a compensation negotiation between a new employee and an employer, there is nothing to be gained by being the first to put a number on the table. If you lead with $200K, for example, and the company was willing to offer $250K, they’ll accept your first bid and pocket the difference.
This is how far too many job seekers leave money on the table.
In some states, employers are not allowed to ask applicants for their current salary, but nothing prevents them from asking what the candidate’s salary requirements are.
Rather than naming your price, ask the hiring manager for a salary range that you might expect to fall in, based upon your experience and merit.
SECOND: Know What You’re Worth
The salary gaps between titles are significant as you rise into Director level and above in corporate America. The average Director’s compensation is $300,000 to $400,000 a year. There are big jumps in pay between Director, Senior Director, and VP, but all are still in the 6-figure annual compensation range. At SVP, the 7-figure benchmark often surpassed. EVPs are sometimes 3x or 4x what the SVP commands, and CEOs are famously drawing 8-figure annual salaries and even higher.
Also, as you climb, the compensation package shifts away from a concentration on base salary and into a variety of payouts like bonus targets and stock awards.
Our outplacement services at inclineHR can arm you with insights from your chosen industry to help determine a true fair-market value for your skills.
THIRD: Refuse to Settle for Less Ever Again
There is plenty to be said for gratitude. I admire my clients who recognize that they are already much further along than their parents ever managed. They drive high-mileage vehicles, take modest vacations, and live within their means. Life is good. Why rock the boat? “Driving a hard bargain” feels greedy to them.
This is how talented people find themselves grossly underpaid when compared to their peers. Far too often, it happens to women and people of color.
If this describes you, inclineHR career counselors have a specific talk track designed to help you close the gap when you negotiate your next salary.
- 66% of our executive coaching clients are female and/or diverse
- 94% are working parents
- 69% of our private-pay clients were promoted in the last 12 months with an average increase in annual earnings of 42%!
- 31% have been positioned for a promotion this year
FOURTH: Never Offer a Number You Can’t Accept
If the company dances around and will not lead with a number, you may have to go first. Knowing what you’re worth, open the negotiation with a salary range.
You say, “Based upon my skills and experiences, and conversations with highly-regarded headhunters, my market value is somewhere in the total compensation range of ‘X’ and ‘Y.’”
Just make sure you can happily accept the lower number, because that’s probably what the company will offer.
FIFTH: Leverage a Lowball Offer for More Perks
If you do get offered the lower number on your salary range – which you can expect ~75% of the time – that’s the time to lace in some add-ons. Psychologically, the more concessions your employer can make at this point, the easier it is to swallow the notion of coming in on the meager end of the salary range.
Push for perks that are no cost or low-cost to the company. Flexible office hours, or a hybrid remote work schedule. Four-day work weeks, or extra pay to continue your executive coaching program with inclineHR.
SIXTH: Pre-employment Terms
Think of pre-employment terms as “prenuptial” agreements between employers and employees that stipulate financial terms when relationships are severed without cause. The higher you climb in corporate org charts – usually VP and above – the more companies expect their candidates to negotiate pre-employment terms.
Pre-employment terms provide protection for both the company and the employee through a contractually binding agreement that is drawn up in advance to avoid costly lawsuits after the fact. Things get contentious when hundreds of thousands of dollars are on the line.
One clause inclineHR stresses to our clients is a Change of Control Provision. It provides a safety net for executives who might be forced out by an acquisition or a change in upper management. Imagine negotiating a million-dollar salary, relocating across the country, and watching your position be eliminated within weeks when the company is sold to another corporation. Without pre-agreed upon terms, this type of situation can get really, really nasty.
Maybe it goes without saying, but you should always get promises in writing. Even if it’s a casual conversation with your manager about working from home every Tuesday to accommodate childcare necessities. If you get a new manager who isn’t as sympathetic to your situation, you may find yourself under great duress to be in the office five days a week.
It is always best to work out terms before blood starts running hot. There is a distinct absence of goodwill when severance negotiations take place at the point of separation.
NEXT: Hire an Attorney
Some employment contracts for upper echelon executives are 100 pages long. It is well worth hiring an employment attorney to review the document and to pressure test all the agreements. A legal review will bring clarity to the contract or MOU and will reveal if anything is being left on the table vis-à-vis compensation and benefits.
It bears repeating: People don’t get paid what they’re worth. They get paid what they negotiate.
LAST: When You Get the Offer
Finally, you negotiate a very lucrative contract with another company that doubles or triples your current comp package. You turn in your resignation, and your HR manager asks to see your offer letter because they’d like to counter-offer.
What do you do?
Nine times out of ten, people who have invested enough time and energy to negotiate terms with a new employer have already made the emotional disconnect from their soon-to-be former workplace. There’s no turning back.
If the counteroffer is enticing enough to retain the employee, the person who stays is often still suspected as being “disloyal.” In the long run, they find out money isn’t the sole factor when it comes to job satisfaction, and they eventually leave the company for good.
If you are seriously considering a career move, make it a homerun move.
We believe our clients find the most success by leveraging multiple offers to land the title and compensation they’re seeking. The process is demanding and often distracting. That’s why career coaches guide jobseekers on their journey to a destination that best fits their professional and personal needs. We look at company culture, compensation packages, upward mobility, family-friendliness of their geographic location, and much more.
The time and money you invest in career counseling pays you back exponentially on the back end. On average, our promoted clients last year bettered their annual comp by 42%!
Contact inclineHR for coaching or offer negotiations.
We Build Exceptional Leaders.