Posts Tagged ‘salary negotiation’
Consider the following management scenario: you’re the leader of a highly successful team, but one that has recently had to tighten its belt financially. While you are committed to training and building success long-term future, your current reputation and success rests heavily on one or two key members. And one of them just announced that he wants to leave.
Worse, he’s come out and criticized the organization publicly, stating that the fiscal constraints have hampered your organization’s ability to attract the top talent it needs to ensure a successful future—and he isn’t prepared to waste his time at any organization that isn’t meeting his level of ambition.
(Privately, you suspect that his real concern with “fiscal restraint” is much closer to home: despite being your highest-paid employee, he knows he could make more elsewhere.)
So what do you do?
Those with even a passing acquaintance with the world of English soccer may have recognized that the above scenario bears more than a little resemblance to a situation that played itself out in the public eye last week: the Wayne Rooney contract saga.
For those unfamiliar, Rooney–pictured left–is the star player at Manchester United. At the start of this season, he was pulling in a salary of around 90,000 pounds per week, on a contract set to expire in two years. In August, he announced to the club that he wanted to leave at the end of his contract period—and the information became public last week. When pressed to justify his reasoning, Rooney issued a statement that essentially expressed his belief that the club is in terminal decline.
Two days later, he signed a new five-year contract—rumored to double his previous salary—with United manager Sir Alex Ferguson praising Rooney because “he has accepted the challenge to guide the younger players and establish himself as one of United’s great players. It shows character and belief in what we stand for.”
PR spin aside, the saga reflects just how dangerous it can be for any organization to become too reliant on a handful of key operators. Whatever happens for Rooney now, he has damaged both his own and his team’s brand—and while he has secured a better deal for himself, nothing else he mentioned has changed. The club that he believed to be in decline—in part because they can’t afford to match the astronomical salaries being paid elsewhere—is actually in a less competitive position now that they’ve tied up a much more significant portion of their revenue in his wages than before.
There are many who believe that the management at Manchester United did the right thing under the circumstances. But there are some cases where retaining your top talent is less important than upholding the values of your organization. This should have been one of them. Quite apart from the fact that the deal agreed with Rooney is enough to pay at least two high-caliber players, management has now set up a situation where other players may feel emboldened to do the same
There’s an old cliché in sport that says that no one player is bigger than the team. In this case, that has proved that to be untrue. Whether the fix pays off in the short term or not, it’s hard to escape the notion that it sets up a situation in the long term where the club is regarded as something of a cash cow for top talent, rather than an organization known for its excellence. And once you’ve got to the point where the only incentive you can offer is financial reward, you really are in trouble.
–Phil Stott, Vault.com
From the recent Vault.com and SixFigureStart Ask Anything teleclass, here are some questions on salary:
Lisa asks: What’s the best way to approach a recruiter about salary negotiation…I’d like to know a) how someone new to the workforce should approach negotiation, and b) how that changes when you’ve got a few years of experience.
Recruiters will demand to know salary before they present you to the client. They need to know that you are in the ballpark of what their client is expecting. It also is good market knowledge for them to have. So you need to know that whatever you say goes to their client.
When you are new, you might think you have no negotiating leverage. It is true that the big management training programs or analyst/ associate programs at banks and consulting firms have set salaries with little negotiating. But for everywhere else, and that means most other jobs, there is no standard salary. You are paid what the employer has in their budget and what they think you are worth. So look at the market value of your skills (computer, languages, analytical, coursework), your internships and part-time jobs, and your degrees. Know what benefit you will bring to your employers bottom line and what comparable people doing these same roles are making. When you are new, employers will try to pay you based on your years of full-time experience because you have relatively little. You want them to focus on skills and results.
When you are experienced, it’s trickier because there are more variables but the essential lessons remain the same. Know your market and how you contribute. That is your value and that should be your price.
Bhavani asks: Due to the recession, I committed to a job offer which payed very less(peanuts) but was offered a good job profile. As time progressed I realized that the company did not deliver on its promises and I plan to quit soon. As I apply for jobs, I am expected to quote a salary based on my current salary. The current salary is very little and I believe that with my experience and education I should be able to quote a higher salary. How can one deal with this situation?
Your current salary is a very strong anchor to what employers think they need to pay you. So you need to do whatever you can to establish your value before divulging how little you make. Focus on what you are bringing to the job and what comparable people in these roles are making. See the points above. Now that you have established that this is the correct anchor you can explain your salary as an anomaly and one of the reasons you are leaving. Employers are happy to get good hires at a fair price even if that means paying a lot more than what you happened to make before.
Gordon asks: How do I respond when a job posting (application) asks for salary history and minimum salary requirement?
This is why I don’t recommend that people spend a lot of time responding to job postings. There is very little room to maneuver as some employers will toss out applications with missing information, such as salary and salary requirements. I won’t even move ahead with presenting candidates to my clients/ hiring managers without salary info. So you have to respond with the truth, and boom, the salary you name anchors how the employer perceives you.
If you don’t want to respond (such as Bhavani might not give his question above) you need to find another way to apply that circumvents the application. Network into the decision-makers and bypass the recruiter. Make a pitch that focuses on your value so that salary is a secondary consideration.
–Posted by Caroline Ceniza-Levine, SixFigureStart