Negotiating compensation is a delicate dance that begins when you first apply for a job.
Often, candidates are asked for information they may not wish to provide at the outset, when a job posting asks for their current or most recent compensation. "I have real reservations about disclosing comp without knowing who the other party is," says New York career counselor Roy Cohen.
On the other hand, if a company really pushes, Cohen believes you'll have to give it up. Holding out repeatedly, or pushing back too hard, can detract from your interview experience. "If we talk about salary and it's either too low too soon, or unavailable too soon, there's a chance that could eliminate us from consideration," he says.
'Bag of Tricks'
To tread that thin line between revealing your hand too early and coming off as obstinate, candidates need "a bag of tricks." For instance, one of Cohen's clients wanted to move from a sell-side position into portfolio management. Because bonuses on the sell side are much larger, even though base is small, compensation was a potential barrier. Although the job posting asked for compensation figures, the candidate omitted them from his cover letter. Although he was willing to take a 50 percent cut in total compensation, Cohen says, "we were concerned his bonus was so high it would rule him out."
The prospective employer's HR department called to request comp numbers. The candidate finessed the question well enough to get a face-to-face interview by saying: "I know what these positions typically pay, and I'm realistic in my expectations."
If an online application form makes a compensation figure a mandatory field, Cohen suggests giving a number you know will get you through that stage of the process, then raising your requirement when you're interviewed. If you're interviewing elsewhere, explain your situation has changed since you applied, and you now know you're worth more than you thought.
Where to Find Pay Data
As in any negotiation, having accurate information is vital. "You need to know your worth, specifically, for the kind of opportunity you're positioning yourself for," Cohen says. He suggests seeking compensation market data through several routes at once, then weighing and synthesizing them to come up with most reliable composite. Potential sources include:
- The CFA Institute's salary survey, conducted every two years (most recently published in October 2007).
- Friends and other industry contacts.
- Recruiters, especially if you're looking at cities or markets other than the one you're in now.
- The alumni association chapter in the city you're looking at.
- The Wall Street Journal.
Cohen cautions against basing your conclusion on information from a single source. And, make sure the figures you use are specific to the city where the job is located. There can be substantial regional differences.
Throughout the interview process, your goal should be to make yourself more desirable. That helps set the stage for successful negotiation. For example, when an employer asks to schedule an interview, don't say, "I'm free all week." If you do, your negotiating power plummets because you're admitting no one else is interviewing you during that time.
On the other hand, if you're in a fast-moving interview process with other employers, let the one you're currently talking with know that. Don't get specific - naming names can be counterproductive, because you'll be surrendering information that might leak out. And, Cohen warns, take care not to sound arrogant. "Don't say, 'I talked with X and they really like me.'"
Instead, he advises simply stating you have other active opportunities, in order to keep the current prospect informed. If that employer could lose you by moving too slowly, it's in their interest as well as yours they know what's going on.