How much are you REALLY worth?

There's not much happening in terms of front office hiring at the moment. Senior London headhunters inform us sadly that recruitment now is more arid than it was even in 2009.

Unsurprisingly, therefore, employers are unwilling to pay substantial uplifts to attract new hires. Once, it wasn't uncommon to negotiate a 50% pay rise for switching jobs. Now headhunters say 10-20% is the norm and that moving for no increase at all isn't unheard of.

"Clients are saying, 'If you want this job you can take the offer or leave it'," says the MD of one financial services search firm. "There's no danger money any more."

As we observed the other week, this is creating a serious mismatch in expectations: candidates expect big uplifts, banks won't pay them; no one's going anywhere.

If you're in this situation, or even if you're just contemplating looking for a new position and pondering how much you might get paid, here's how to calculate your true worth.

1) Average your total compensation over the past three years

What you've been paid in the past is the biggest determinant of what you're going to be paid in the future. "99% of the debate about pay comes down to historic compensation," says Lee Thacker at search firm Silvermine Partners.

Any organisation that's hiring you will look not just at what you earned for 2010, but what you earned for 2009 and 2008 as well.

"Most line managers will want to make an offer that's no more than 20% higher than the previous year's total compensation," says Jason Kennedy at recruiters Kennedy Group, "but HR will always want to look at pay levels over the prior three years."

If your compensation last year was substantially higher than the two years previously, the hiring bank will factor this in, says Kennedy. You may not get the 20% uplift on 2010 as a result.

On the other hand, if your compensation for 2010 was below that for 2008 and 2009, banks may choose to ignore the two earlier years and simply pay you based on 2010. "Banks have selective attention," says another headhunter. "They'll consider historic compensation only when it allows them to negotiate you down."

If you've been paid badly, or below market, for the past three years, breaking the mould and getting a substantial uplift that puts you on a par with peers will be

impossible. "If you've been underpaid historically, you may be in a very difficult position," cautions Stéphane Rambosson, former head of ECM for France at Citi and managing partner at search firm Veni Partners.

2) If you're a salesperson, look at how much business you'll bring with you

Banks are increasingly unwilling to pay according to formulae, but the old rules still sort of hold - albeit on a very discretionary basis.

If you're in sales, headhunters say you should expect to be paid anything from 7-10% of the revenues you bring with you. Typically, banks are unwilling to guarantee this or to put this in writing, but it should give you a ballpark figure and you might be able to negotiate a floor based on agreed targets.

3) If you're a prop trader, look at your P&L

There aren't many prop traders in investment banks any more. The few that remain will also find it difficult to negotiate formulaic pay packages. However, headhunters say the historic norms are still a guide. In theory, prop traders can still expect to be paid up to 20% of profits, depending upon the house. Flow traders are flying blind. See point 1 for hints.

4) Consider how popular you are with clients and colleagues

Hiring a new member of staff has become all about extensive due diligence. This means, "talking to 50 clients and colleagues" about what you're like, and having, "360 degree conversations" about your performance. The recruitment process takes a lot longer as a result.

Bottom line: if all your clients and colleagues rate you highly, you will be more attractive to your potential employer. Compared to point 1, this is a marginal factor, but it may improve your bargaining position.

5) Consider the compensation and revenue opportunities attached to the role you're applying for

Hiring banks will generally attach a compensation ceiling to a particular role and this will be related to the perceived revenue opportunity associated with it, says Rambossen.

Your worth is therefore not so much determined by your perception of your value as by the bank's perception of the value of the role. This may sound self-evident, but a lot of people forget it.

"Ultimately, unreasonable people are not given offers," says Thacker.