I run an executive coaching and career strategy firm that helps women accelerate their careers. A component of my practice is working with clients on how to get promoted and get raises and/or negotiate better salaries.
I’ve spent 20 years in technology and as an executive, and have worked at several large Fortune 500 companies. In that time, I have collected some knowledge that I think is important for anyone that is in the business of negotiating a salary for a new job or a raise in an existing role.
Understand What ‘Total Comp’ Means
The total compensation package, or “total comp” as you sometimes hear it called, is the total amount of your monetary and stock package a company is offering you for your job at said company. Total compensation, broken down, equals the following:
• Base Salary: What you are paid yearly• Stock: Company RSUs (restricted stock units) or shares (depending on if the company you work for is public or private)• Yearly Bonus: Typically about 15%-20% of your base salary. • Signing Bonus: A monetary or additional stock offering that you receive upon accepting and beginning employment at a company, or when you’ve been at a company for a certain period of time.
Other considerations when negotiating your salary for a new role, either at a new company or an existing company if you are changing positions:
• If you have a family and regular, consistent expenses, you may want to negotiate a higher base salary and forgo a signing bonus or additional stock offerings. • If the company has lots of promise, the market looks like it will improve and you are single, you may want to negotiate components of a better stock plan versus putting the focus on your base salary. • At times, when a base salary is not as high as you think it should be, companies will offer an additional signing bonus as an incentive. However, there is no promise you will receive a raise or other bonuses that will equate to that higher base salary amount year over year, so I recommend you look at signing bonuses as a nice-to-have and ensure you are happy with the base salary you are receiving.
Know What You’re Worth
Want to know how much you should be getting paid in a certain role at a company, or in a particular industry? Ask a white male. White men get paid, on average, more than any other gender or race. Many are willing to talk about what they make. Find a few folks in your network and reach out to find if they are willing to chat with you about best practices for negotiating and, in that discussion, ask what they made when they were in the role. Hopefully, they’ll tell you what they made and also what their total compensation package was for the role, and, if they were a manager, what the salary range is for title/grades. Go find a few friendlies and get started; you should be checking in with friends, colleagues and more at least yearly to ensure you are still in line, salary-wise.
Get The Compensation You Want
1. Pick two compensation areas where you are not willing to budge. Using myself as an example, base salary and bonus are the most important, so I want those to be high. I am willing to forgo a signing bonus and additional stock if I can ensure a higher base salary and bonus structure. I know that those two points are my firm negotiation points and that the other two aspects can flux. When you negotiate, base will typically be the starting negotiation point, so ensure you are ready to start discussions with that in mind.
2. Ask about the company’s bonus structure. Bonus structure is typically something that cannot flux without C-level or board-level approval (if you are a senior director or above). You typically are assigned a percentage, such as 15%, and that can go up or down depending upon performance. I recommend you talk to people who have been at the company or are still at the company and not within your immediate hiring division to find out more information on how this structure works.
3. Know your “make me happy” numbers. Figure out what your lowball number will be. If this gets offered to you, obviously, I recommend you negotiate up, but if you cannot, will this still make you happy? Ensure it will before you jump to take a role.
4. Gut check it. Spend 24 hours sitting on the final amount. Are you comfortable with it? Is it going to pay your bills, plus some? Spend some time thinking through it and letting it sit. Twenty-four to 48 hours is usually long enough.
How To Get ‘Add-Ons’ And Additional Benefits
Have you been at a company for one-plus years and are executing well, but think you provide more value to the company than you are being compensated for? One thing to consider is the unique value you offer to the company you are employed at. Do you have tens of thousands of Twitter followers that your company asks you to market their product or service to? Are you a frequent industry speaker that is requested at top events that your company doesn’t sponsor, increasing their reach through you? Have you written a book, or do you author articles for a popular blog?
It does not hurt to ask for additional compensation if this is outside your immediate purview. But you must be achieving great results inside working hours for your “regular” job, and then going above and beyond in a way that multiple people observe and comment on to receive these additional benefits.
These are just some starter tips, and hopefully, you’ve found them helpful. If you have questions or want more information, you can reach me email@example.com or on Twitter.