Most executives know that labor costs make up a significant portion of their budget and when those same executives think about their own compensation package, it is often approached with the same cost mindset.
A company’s labor costs are usually one of the top three expenses and sometimes it is the single largest business expense.
In recruiting, we talk about the cost per hire.
HR leaders talk about the cost of benefits.
Operations and finance leaders talk about the costs of payroll and related taxes.
The direct and indirect costs associated with hiring an employee have been the topic of countless hallway conversations, board meetings and budget reviews.
But talking about wages, benefits and equity during a recruitment process can be tricky, particularly in executive recruitment, when interviewers and interviewees are hesitant to share too much too soon.
In order to have an open dialogue about a compensation package early enough in an interview process to avoid wasting anyone’s time, there needs to be trust and an expectation of fairness on both sides.
Most executive salary conversations start without one, if not both, of these things.
What this means to you
While posting salary ranges are becoming more common place, the range can be so broad that it isn’t really actionable.
There’s the fear of the person who says their number first is the loser.
There’s also the question lingering in your mind: How much are they willing to pay ME?
Finally, there’s the reality of not wanting to close the door too soon on an opportunity that could be great for your career.
Typical Salary Talk
A common starting place for a typical salary discussion goes something like this:
My salary expectations are X + Y + Z.
If that works for this position, let’s talk. If not, there’s no reason for us to speak.
(That’s not a verbatim conversation I’ve had, but it’s the gist of what I’ve heard from lots of executives).
Another common starting place is a little less direct:
Based on the responsibilities of the role and my research on market rates, my salary expectations would be in the range of X to Y. However, I’m really interested in this position and the opportunity to contribute to [company name], so I’m open to a discussion about compensation.
If you’ve been in the same industry for years or you know that you have been paid competitively, you are often “in the ballpark” and the above framework works pretty well.
However, if you’re moving to a new industry, haven’t been paying much attention the last several years or haven’t done much research on salaries, you may feel at a loss to answer this question.
You can still go into a salary conversation with conviction.
If that’s you,
You need the Focus and Flip Strategy (In just 2 simple steps)
Step one: Focus on your Results
As you move through the interview process, ask yourself after every conversation if you confidently communicated your credibility.
Every single conversation presents an opportunity to do this.
Not in a pushy, “hey, look at me” way,
But in a “hey, look at my results” way.
You can be authentic and authoritative at the same time.
It’s okay if you don’t nail every conversation, but pinpointing the problem areas will position you for better success when you get to the salary negotiations
because
the decision maker must believe that you are the person who can solve their problem.
You can take action by developing your ability to demonstrate how your contributions can drive revenue growth, provide cost savings, process improvements, or other tangible outcomes.
Step two: Flip the Frame
What many capable executives miss is the opportunity to sell themselves during this portion of the interview process
because
they are stuck in the cost mindset that they know well and have navigated on behalf of their employer.
You can flip the frame by asking a question rather than giving an answer.
As a matter of fact,
One secret for an effective salary negotiation is to ask questions early and often.
Try out this script:
Historically, I have had a very competitive base salary as well as bonuses and (other compensation elements) that reflect my ability to meet and exceed my annual goals.
I realize that with {current industry trend} and the {2nd industry trend}, there have been quite a few changes in the job market.
What can you tell me the compensation package for this position? Pause.
If I was interviewing for a Head of TA position, it might sound like this:
Historically, I have had a very competitive base salary as well as bonuses that reflect my ability to meet and exceed my annual goals.
I realize that with the rise of remote work and the reshuffling of the workforce, there have been quite a few changes in the job market.
What can you tell me the compensation package for this position? Pause.
I’ll let you in on another secret:
The power of the pause is profound.
It gives the interviewer space to respond to your question (and very likely adding a few details you wouldn’t have gotten otherwise).
And, it allows you to ask additional questions.
This back and forth gives you the two things that every compensation conversation should have:
An opportunity to build trust and a sense of fairness.
The interviewer should be able to give you enough information that you feel confident moving forward.
If you don’t have enough information to feel confident to move forward, then the question is: should you?
Get out there.
You got this.