Optimizing Your Compensation Package: Strategies for Successful Salary Negotiation

In today's competitive job market, the question of salary expectations often arises early in the hiring process, catching many candidates off guard. While discussing salary is less common for executive roles, it is essential for prospective candidates to be well-prepared when the topic arises. This article delves into the intricacies of addressing salary expectations and provides valuable insights on navigating negotiations for executive positions. 

 

Answering Questions About Salary Negotiation

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Companies often ask salary expectations as early as in the application process or during the screening interview.  Although it is less common for executive roles, it is important to be prepared with an answer. 

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Some reputable sources recommend avoiding answering the early questions about salary expectations and just recommend saying that you are willing to negotiate.  That is a viable approach.  Other sources recommend stating a salary range. 

 

A strong recommendation is to do research about that role, in your geographic market, and understand the market rate for that role.  If you have more experience or education than others who make up the “market rate” for that role, then you could argue for a higher range of pay.  In this way, it makes it feasible for you to say “the market rate for this type of position is $XX-$XX” and provide a range.  You can also add, “and I’m willing to negotiate once I understand the overall compensation package.”  This is much better to say than “I need” or “I want” which is not market based, it may not align with your value in the role and it may not align with their existing salary tiers. 

 

Providing a range will give you some room to negotiate since there are many elements of an executive compensation package. 

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Perspective of the Hiring Side

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The reason that companies ask about salary expectations is to confirm that there is some alignment before proceeding with the time-consuming interview process.  The budget or funding may limit what the hiring manager can offer as well as what other executives are paid. 

 

 If this is a new role, they may not have a sense of the appropriate compensation for the role and they may use the responses to identify a potential salary range.  In this case, it is helpful for you to provide a range to properly set their expectations. 

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When to Start Your Negotiation  

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Wait to negotiate until you have the whole package of compensation and benefits before you start negotiating.  This includes salary, bonus, equity, stock, time off, health benefits, as well as other perks.  You may find that some of the elements are very different than your current or prior roles.   

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One coaching client negotiated a large raise, but then found out that health benefits were not covered 100% like their last job.  The difference was significant over the course of a year and heavily cut into the benefit of the higher salary. 

 

Another coaching client was offered three salary options with different levels of equity.  The higher salary corresponded with the lowest level of equity.  This offering allows the candidate to determine what works best for them and is a great opportunity to trade off fixed compensation with a potential upside of equity. 

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Yet another coaching client was challenged because the hiring company could not match their target salary.  The client was able to negotiate a substantial signing bonus which more than made up for the salary shortfall.  Once employed, they found out that the reason that the hiring company couldn’t match their target salary is that they would make more money than their boss.  Over the course of the next year, with a planned organizational restructuring, the client earned a promotion and achieved their target salary. 

 

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The Actual Negotiation 

 

Once you know the complete package and you know the elements that you want to negotiate, set up a meeting with the person who presented you the offer.  It is often someone in HR and is sometimes the hiring manager.  Although the hiring manager is often responsible for the actual offer, HR is often involved so that they can answer questions about the benefits package.  It also allows the candidate and hiring manager to maintain their professional relationship related to the work and not compensation. 

 

It is best to start by reiterating your interest in the job and the company. 

 

Next, identify the number of items you want to discuss, leaving the salary to the end.  Say something like, “I have 5 items to discuss with you” 

 

Start with questions of clarification that are generally policy questions and not subject to negotiation generally. 

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 - When is it possible to use the vacation that has accrued?” 

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 - When do health benefits take effect?  

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Then ask about elements of the compensation package and see if it is possible to negotiate those items.  Sometimes the company cannot adjust their policies for individual employees.   

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 - Is it possible to increase the bonus percentage to XX%? 

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 - It is possible to increase the number of days of vacation? 

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Finally, address the salary portion of the compensation.  It is very effective to say, “well everything looks good with the compensation package overall, there is just one last item … if we can get to a salary of $XX, we have a deal, and I will sign immediately.”  Note that I used the pronoun “we” rather than “you”.  This is an effective way to say that “we” are agreeing on a rate, rather than creating the perception of “us” vs “them”. 

 

Use the pronoun “we” or “us” rather than “you” where possible. 

 

If you are talking to someone in HR, this is generally when they say they will have to talk with others to see what is possible.  If that happens, that is a good sign.  They have not said “no” immediately.  You can ask about how long it will take to get back to you and see if they have any other questions for you.   

 

If they cannot meet your desired salary, you could suggest a signing bonus.  This is a one-time payment that is generally paid within the first few weeks of employment.  It generally requires you to work with the company for a minimum of a year or you will have to repay the money.  It is a great way to make up for the salary shortfall, especially if you believe that your long-term growth in the company will bring you in line with your salary goals. 

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Conclusion

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Effectively handling salary expectations during the hiring process is crucial for candidates seeking executive roles. By conducting thorough research, offering a well-considered salary range, and waiting for a complete compensation package before negotiating, candidates can navigate discussions successfully. Demonstrating professionalism, collaboration, and a focus on mutual benefit can increase the chances of reaching a satisfactory agreement and securing the desired executive position.

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