Running a recruiting firm and as an Executive Coach for Ellevest, I get a lot of people asking me for career advice. I just recently got three calls in four days asking for exact the same question: how to negotiate a pay package for a new job. The askers were a CEO, a CMO, and a CPO.
And that goes to show that salary negotiations can be tough at any level. Pay packages include many elements, and the things we prioritize may change over time, based on what we believe will make us happy at that point.
Get that good data.
There are two kinds of data you’ll want: external and internal. To gather external data, start by asking friends in your field and trusted colleagues what the market pays for the job you’re considering. Then look to reputable compensation reports by leading firms (such as Radford) — many companies pay for and use these. Take the publicly available data that’s built on self-reported (read: inflated) salaries with a grain of salt, but I have heard good reports on PayScale from my compensation experts.
Next, find out the internal pay structure of your target company. Ask the hiring executive how pay ranges are determined. (In California, companies are now legally required to give you the answer.) Many states no longer allow employers to ask about your prior salary, so keep your focus on the value of this job, not the value of your last job.
If the company doesn’t have clear salary ranges, ask where your job contribution would stand, relative to others in the company. I’ve seen even two-person startups have the “relative contribution” talk.
Ideally, you and your potential employer should align here from the beginning, so that any decisions are transparent and defensible. Transparency is where the future is headed, so help your company take a step toward building more transparency and trust by sharing and asking.
Focus on the mutual win.
Position yourself psychologically on the same side of the table as your new manager. Your salary isn’t something that will deplete the company! In fact, the reason you’re being hired is to generate value for them. The chief product officer who called me received a hefty salary offer from an early-stage startup by emphasizing how her work would directly impact their revenue — with a strong multiplier.
Even if your role doesn’t have a clear revenue impact, identify the mutual win. It exists or you wouldn’t be excited about your job, but it might need clarifying. We all want to feel like a valued member on a winning team with an inspired mission. So translate as much of your work as possible into explicit value: revenue gain, risk avoidance, cost reduction.
Any time you feel yourself or your potential manager slipping into a defensive mindset, say something in the negotiation about how exciting it will be to collaborate and make a greater impact on the company together, so you’re both staying in the “what’s-possible-together” mindset.
Bundle your priorities.
Take a page from your cable company’s playbook (as painful as that may be) by negotiating salary, bonus, benefits, equity, flexibility — and anything else that matters to you — as a bundle. Negotiating piece by piece can accidentally make both of you feel like you lost. Understanding which items matter more to your boss, which items matter more to you, and where there the best deal is for both of you is entirely possible with good communication.
Negotiate for the greater good.
As hard as we are working to get to gender parity, we have to understand the cultural context we are in right now and what will work for us today. What we know is true for women today is that many of us negotiate more effectively when it’s for something greater than ourselves. So consider how your higher pay will create more economic stability for people you care about, whether those people are family members, your future self (she’s important!), or recipients of your donations to causes you believe in. I know a woman who literally donated her salary increase to a shelter, so she had the gumption to ask for what she thought was possible.
The research also shows that women are still at higher risk of being penalized for negotiating, but that taking a communal approach helps reduce that risk. So if you’re asking for a salary increase in your current job, your secret word is “we”.
Only you can decide what matters most.
The Silicon Valley CEO who called me was weighing whether to live near his extended family or take a new job at a bigger company in the Pacific Northwest that had a slightly lower salary, a lower cost of living, and no family nearby. What was more important? Only he could decide, and so we walked through each tradeoff to weigh what was right for him in his “bundle.”
In this particular situation, that move might have been right earlier in his career, but now that he had two kids, he understood the immense value of having nearby family who provided tremendous support. Where you are in your career will influence your mix of tradeoffs. (If you’re stuck, I find this visual illuminating as you consider what matters most.)
Science. It’s got your back.
Before making any decision, clear away the myths, so you can find the science. Get clear on the science on commuting (spoiler, the big house far away isn’t worth it), the reputation of the company culture you’re considering, and when money does (and, more importantly, doesn’t) correlate to our happiness.
And, for the 99.99% of us who haven’t attended Stanford Business School to learn the art and science of negotiation, here’s your quick primer thanks to the brilliant and generous Maggie Neale (print or video).
May you do your best work, on terms that work for your full life, and pay you well.