Turbo-charge Your Paycheck? Good Luck
Through a recruiter, your former co-worker got an offer for 30 percent more than he was making. His employer offered him 50 percent more to stay. How do you orchestrate a deal like that for yourself?
Rule No. 1 is maddeningly simple: Big producers can pretty much write their own ticket. If you're in a direct revenue generating role and are a star who leaves your sales or profit targets in the dust, you can count on getting calls from headhunters. And you won't need a public Web site to tell you how to capitalize on them.
If you're not a budding rainmaker or master-of-the-universe trader, however, don't expect your compensation to take a quantum leap even if you get recruited. Although some people do reap such windfalls, recruiters say they're rare and even strong candidates have to overcome high hurdles to reach such pots of gold.
For instance, the lure of hedge fund wealth continues to draw hungry stares from sell-side researchers. But sell-side analysts lack crucial pieces of the portfolio manager's skill set, notes Sandy Gross of Pinetum Partners, a retained search firm for hedge funds. She says an analyst's chances of jumping to a fund fade after a few years with an investment bank.
If your contributions to the top or bottom line aren't readily measurable, dramatically raising your compensation will require proof that your value exceeds what you currently make. "Value" can be defined either by your unique ability to further a new employer's strategic goals, or by the compensation that your skill-set fetches elsewhere in the marketplace.
Large Pay Bumps Require Justification
Even a candidate who's clearly underpaid must "make the case" to a prospective employer to attain more than a modest raise when changing jobs, says Alan Geller, managing director at AG Barrington, a financial services technology recruiting firm. In the job market, as in the securities market, Geller says Wall Street firms strive to "sell high, buy low...The candidates always want to make more than the companies come to me budgeted, for the most part."
He relates an experience he had with a candidate whose pay had been frozen for three years at $95,000. The candidate felt he was worth $125,000. But clients, seeing the current compensation, resisted offering more than $110,000. Finally he received an offer of $120,000. When the candidate held out for the additional $5,000, the employer balked.
Leveraging an outside offer to get more money from a current employer is also fraught with challenges.
In the first place, any leverage will arise only after you've pursued the process all the way to a job offer. "Just getting a call (from a headhunter) means nothing," says Vicky Oliver, author of 301 Smart Answers to Tough Interview Questions. In most firms, an employee who complains about pay while dropping hints about leaving for greener pastures "will be seen as merely irritating."
No Dollar Signs in Your Eyes
Going through a full recruiting process means dealing in good faith and being mentally prepared to switch employers. That requires focusing on factors other than money, especially early in the process. Start by questioning the recruiter about the client and the role. "Compensation won't come up until last," says career counselor Win Sheffield. "If you're offered an opportunity, be sure to look at all sides of the proposition, not just the money."
Indeed, bringing up compensation too soon can cause a short-circuit. "I would cut off the process if I knew it would become a bidding war," says Gross. Geller believes hiring managers, too, tend to be repelled when candidates focus on compensation in an initial interview.
Finally, candidates who hope their current employer will counter-offer "better have a very clear perception of how their performance is viewed" by that employer, cautions Neil Diller, a New York career counselor and former Wall Street HR director. Getting called by a recruiter doesn't mean you're a top performer in your department. "If I'm not a top performer, then they may be very happy to let me go," says Diller.
What's more, many employers simply won't make counter-offers. Some firms underpay everyone as a matter of policy, and learn to live with the resulting high attrition rates, Diller says. Others view entertaining outside offers as disloyalty that offends their corporate culture. They'll gladly close the door on even a top performer who dares to look elsewhere.
If you get an outside offer but are ambivalent about leaving, you can encourage your current employer to counter-offer by signaling your wish to stay, says Sheffield.
There is a school of thought that holds it's unwise to accept a current employer's counter-offer. However, Oliver says that can be a good choice if compensation was your only reason for making a move. Of course, you can only do that once with a particular employer.