Compensation Negotiations

Posted on: April 21st, 2015 by
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A TV host said that women are at a disadvantage when negotiating for a salary because they aren’t experienced or forceful enough. Not true. I always come out on the short end when I try to negotiate with my wife. Women have an intuitive sense of persuasion.

Here are some thoughts about negotiations, be it a man or woman. When you get a job offer with compensation dollars less than you expected, never say “no” to the offer. Instead, say “maybe” with the following alternatives:

1. Make sure you researched the position and comparable compensation. Look at the factors that determine salary levels such as education, prior experiences, responsibilities, and organizational level. Most companies want to pay at the mid-point or less within the salary range unless your skills are in demand or you have experiences that they must have. However, the lower the offer in the range, the more room to move up over time.

2. Communicate your rationale with these comments or questions:
“I was expecting a higher percent increase in salary. Do you have any flexibility within your control to increase the offer just a bit?”
“Given the market demand, this type of position is being paid between $X and $Y. (assuming you did your homework) Can you increase the offer to $Z?”
“Is there a reason why the salary is below or at the low end for this position?”
“The salary is below what I was expecting. If I accept your offer, can I have a performance and merit review after 6 months in order to move it closer to my anticipated value?” (Ask only if you’re really sure of yourself. There’s a risk involved)
“I would like to accept the offer even though it’s below my expectation. Can I expect a substantial increase/promotion after the first year assuming a high performance level?”
“Based on my track record of results, I know I can be an outstanding contributor to your objectives. I believe my value is worth an additional X% to your offer.” (Just make sure you can deliver)
“Until I know the complete compensation picture (bonus, incentive, benefits, costs to me, and expectation for results) I would find it hard to accept a final offer.”

In the end, you need to decide whether:
1. You’re in need of a new job and this is the best one so far, so you better take it
2. The job is what you want career-wise, even if the salary is below your expectations
3. You are willing to accept the offer as you see longer term opportunities
4. You feel comfortable enough to ask for an exception to the offer, at a higher level
5. You will stand behind your conviction of value and not accept the offer unless modified
6. You can find something better

Negotiations are dependent upon the balance of who needs the other more urgently. If you are one of a few that have something unique that the company needs, your position is strong. If you are one of many with the same skills in a flooded market, then you’re at a disadvantage in negotiations.

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Price Yourself Right

Posted on: April 14th, 2015 by
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How do you know if your job is currently priced right? You’ll need to do some digging but it’s readily available. What’s the value of that information? If you can’t answer that question, go back to sleep and let opportunity walk right past.

First, answer some basic questions: How would you rate your performance and value to your current company? Can you measure it? People looking for greater opportunity, higher compensation and a career jump are more likely to know the answer. What was your last performance rating and salary increase? This past year high performers received an average increase of 4.6% while a satisfactory performer was about 2.6%. Check out your professional or trade association for pay averages in your geography or use the Internet: Monster Salary Checker and Payscale are two of them.

Higher performers tend to measure and document their results before an appraisal review. They can quantify how they increased revenue, reduced cost, saved expenses or increased value. They can define how they added value to their boss. Anytime you can make your boss look good, it’s in your best interest.

Part of your compensation is dictated by the company’s performance and industry. Expanding companies need more quality employees and will pay more than their competitors who may be losing money. Those who are recruited and leave for a higher-level job receive a pay hike of 15% to 17% on average, or more if it’s a promotion.

So what can you do about it? You need to know these 5 things:
1. Your total comp package, including salary, bonuses, incentives and benefits
2. The least amount your willing to accept for a new job. This includes everything in #1, but also the cost of moving and resettling the family
3. The comparable compensation for this position in the marketplace: What is this job worth to other organizations in this market?
4. What is the total cost of moving? How much will the new company cover? Three elements are: The cost of leaving, the cost of relocation, and the cost of moving in.
5. If it doesn’t work out, what’s the cost financially, to your career, time on the market, and reputation? Do you have a severance agreement and contingency plan?

Test the marketplace inside and outside of your current industry. When you get an interested company, find out what your worth to them. Meet with your boss and say, “The marketplace is heating up. I like it here and enjoy working for you, but recruiters are calling and talking about a major increase. I’m not currently interviewing but I’d be interested to find out what the job opportunities for advancement are here over the next 6 to 12 months”.

The organization’s reaction to your inquiries will tell you a lot about what you should do.

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At a Crossroads?

Posted on: April 7th, 2015 by

During your career, there are a number of crossroads that force decision points. Each decision point leads you in a trajectory that accelerates your opportunities or stalls you out. How you make those decisions and why may determine your ultimate success.

Our careers tend to be like a 3-act play. Each act is a crossroads moment:

ACT I: This is the period that you’re “finding your way”. Sometimes your first few jobs are outside of your educational major. Not to worry, as it’s all part of the exploring process. However, within a five to 10-year period you should have a pretty good direction, if not a passion. If, while half-way through your first 10 years, you don’t view yourself as unique in the field you’ve chosen, start looking at another avenue that will unleash your passion. Toward the end of Act 1 you should be able to differentiate yourself from your peers. Those who are passionate about what they do, tend to gravitate to the top of their field.

ACT II: During this period a number of things are changing. You begin to shift from a set of hard skills-only to learning the soft skills: From execution-only to influencing others. You may shift from an individual contributor to a team leader or a supervisor. You should be gaining the attention of higher-level management. At a later stage you become a manager or a high-level individual contributor and see a wider canvas of the organization: The business, the opportunities, the competitive forces, and your role in a more targeted way. This is the time where you accelerate your experiences and decide how far you want to go toward your ultimate career goal. This is also the time when conflicting objectives occur: Family, peers, competition, marketplace forces, bosses, business changes and many others.

ACT III: Optimize your last 10-15 years until retirement. Now is the time you know whether you will achieve your ultimate career goal or not. You may have run out of time, or external forces prevent you from moving forward. This is decision time as to how you want to spend the final act of your career: Accelerating to your dream objective? Focus on creating a legacy? Mentoring those around you to achieve a higher level of performance? Serve on the boards of non-profit organizations? Teach a class or two at the local university? Whatever you decide to do will leave a meaningful mark.

Needless to say, these three acts are flexible depending upon things like the size of your organization, the industry your in, the cycle of the economy, your function, and many others. Nothing is gospel, but these crossroads can serve as a guideline as to what to expect and when.

One last comment: Happily-ever-after is a dream. You can’t stop learning or moving forward. You’re either advancing or you’re sliding.

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Ready For the Next Step Up?

Posted on: March 31st, 2015 by
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How do you know when your ready for the next step up the career ladder? If you think your ready because you can do your boss’s job, forget it. They’ll be looking for someone to take it to the next level, not just maintain the status quo.

If the company is preparing you for the next level, there should be a formal training program in place. How can you prepare for the next step?

1. Define the skills that are required at the next level – You should have an accurate position description of your next career move. If you don’t, you’re not ready. The template of responsibilities is your key to preparation.
2. Assess your current skills – Assess your skills against the template of the next level. Be harshly objective in your assessment. Some competencies you already have, others will be weak, and the rest of the competency skills will be missing.
3. Find someone who already is doing or has done the job you want. Ask them what it takes to be successful and what you need to do to prepare for the opportunity.
4. Develop a strategy to fill in the voids and beef up your weaknesses – Design an action plan to strengthen your weaknesses. Some can be achieved with courses and certifications while others may need “hands on” experience.
5. Put your strategies into action by talking with your supervisor, HR, or department head. One strategy is to move to a job at your same level in order to move up. Another: Assume the additional responsibility for a collateral function
6. Find supplemental funding to help you financially – Tuition reimbursement by your employer, a negotiated entry strategy with a new employer, a low cost loan for on-line courses
7. Take the first step with a reasonable time-line – Develop a time frame for each step in the strategy, then take the first step when you’re ready. The key is to begin the process.

A word about a graduate degree: Unless you feel very confident that you can reach the top of a functional area, i.e., Department Head, VP, or move into general management, it may not be worth the cost and time. Two years without an income while paying $100,000 or more over two years at a quality school will take at least 5 years to break even. On the other hand, is could put you at a senior level a few years later.

Whatever your career strategy, always remember:
1. Your only as good as your last success
2. Your competitors are also preparing themselves to move up
3. The marketplace moves quickly. Opportunities won’t wait for you.
4. Current skills have a shelf life. New skills will continually be required.
5. Look two moves out, not just one. Each job must link to another opportunity.
6. Have a back-up plan if your next dream job turns into a nightmare.

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You Have 15 Seconds — Convince Me

Posted on: March 24th, 2015 by
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Many job seekers who send in a resume don’t seem to realize that they have about 15 seconds to be noticed. Hiring agents scan 200 or more resumes and put them into 3 piles: A, B and C. Only the A resumes get read in detail.

So what does a job seeker need to do to get noticed and be put in the A pile? Design your resume so your major results and achievements are positioned at the top half of the first page. How do you accomplish that? Easy. Define your measureable results in a Summary Performance Statement right after your name and contact information. Here’s an example from a recent client of mine:

• 10.2% annual profit increase by implementing a digital marketing plan
• 22.4% annual customer growth over 5 years through innovative strategies
• 8.6% reduction of costs by implementing value analysis to the operating budget
• 83% increase in revenue by converting manual to real-time customer interactions

Why is this approach a powerful influencer to the hiring manager?
1. It summarizes multiple jobs and the results that were achieved
2. It documents the actual outcomes of the candidate
3. It communicates a serious, results-driven candidate
4. It positions the hiring manager to say, “This is someone I definitely want to talk to”

You’ve now gotten the positive attention of the hiring manager, who wants to find out:
1. How were these results achieved?
2. Can these results be duplicated in my organization?

These questions can only be answered through an interview. Of course, after this Summary Performance Statement are the individual companies, titles, dates, responsibilities and results of each employer. In that way the hiring agent can see where these results were achieved.

I’m sure you probably spent hours writing your resume, making sure that every detail was covered. But you probably focused on your responsibilities and activities but failed to document your results. If you assume 200 people are applying for this same job, probably 50% of them had similar responsibilities. The only thing that differentiates you from all others are the results you’ve achieved Without a measureable outcome, everyone else’s resume is a matter of judgment as to who can do the job.

You need to lead the pack of applicants in order to get an interview and become a candidate. Your results are the only indicator to a hiring manager that sets you apart from the rest.

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