How to Negotiate Your Salary in the Age of Pay Transparency Laws


Having more information to gauge your worth should, in theory, give you more leverage in salary negotiations. But the reality is complicated. Companies could be less willing to stray from their set ranges, and you might feel hesitant to push for fear of looking unreasonable.

How should you approach salary conversations in this new era of pay transparency laws? What’s the best way to advocate for yourself when the pay band is exceptionally large? And is it better to be direct or subtle?

What the Experts Say

Pay transparency laws vary from state to state, but in a nutshell, they require employers to disclose information about pay, such as salary ranges, in job postings or in offers to candidates. The aim is to create more visibility in pay practices and help close gender and racial wage gaps.

For job seekers, the upshot is more agency in salary negotiations, says David Buckmaster, the author of Fair Pay, who’s worked on employee compensation projects for companies including Nike and Starbucks. Before these laws existed, Buckmaster says that compensation was like a mysterious black box. “Job candidates were in the dark about what comparable employees made and how the company benchmarked salaries to the rest of the market,” he says. “Now, having a pay range takes away some of those unknowns.”

The downside is that it can cause job seekers to hyper-fixate on salary, rather than the big picture of an employment offer, according to Victoria Medvec, a professor at the Kellogg School of Management at Northwestern and author of Negotiate Without Fear. “Your pay is a piece of it, but there are other aspects of the job to consider like your role, responsibilities, benefits, and flexibility,” she says. Here are some tips to help you navigate the conversation and get the compensation you deserve.

Appreciate your newfound power. 

Negotiating your salary requires information, tact, confidence — and the right mindset, says Medvec. “Knowledge is power, and you now have an advantage because you know what’s possible.”

While some salary bands might seem too broad to be useful, they underscore the power of negotiation, she says. “The range exists because negotiation is a dynamic interaction between the employee and employer and some people do it more effectively.” After all, she says, it’s not just about being willing to ask for more, it’s also about having the information and self-assurance to make your case.

Don’t get in your own head and don’t be intimidated or discouraged — even if a certain number feels out of reach, adds Buckmaster. For example, if you make $70,000 and you’re being offered a comparable job with a listed range of $100,000-$150,000, you might feel as if you can’t ask for the top of the range. But the fact is, your current salary has little bearing on what another company is willing to pay you, he says: “What you made before doesn’t matter.”

Do your research. 

Your goal is to go into the negotiation with an objective, realistic understanding of how the employer views your market value. This requires some homework to figure out where you might land within the company’s published compensation bands: at the top, in the middle, or toward the bottom.

“Before pay transparency laws existed, people may have assumed that HR has been randomly throwing darts at a dartboard to determine what people got paid, but there’s rigor behind the numbers,” says Buckmaster. He says that behind the listed range lies an “approval matrix” that’s invisible to candidates. “Every company has a trigger point that requires extra approvals to justify placing someone at the very top of the range.”

Don’t be disheartened; rather, use that knowledge to make a compelling case for yourself. Visit job search websites and databases, such as Glassdoor, Ladders, and Salary.com, and talk to recruiters and industry colleagues. Take a good, hard look at your experience and qualifications and be honest about your work history. “Evaluate your actual job level and the scope of your past responsibilities. De-emphasize titles. Being a director at a startup is not the same as being one at a large company,” Buckmaster says. 

Be savvy about the process. 

Many, but not all, salary negotiations take place after the company has extended an offer. But you might consider signaling your salary expectations earlier in the process if you think your pay ought to be on the high-end of the range, says Buckmaster. He suggests saying something along the lines of, “I’m looking forward to seeing the offer and trust that my starting position in your pay range will align with my significant experience doing this work at XYZ company.”

Once the company has made an offer, the opportunity to negotiate for more is usually quite narrow, so Buckmaster advises making your case wisely. “Don’t go back multiple times, otherwise it might affect your reputation on the way in,” he says. “You don’t want to come across as being challenging to work with.” Make your argument concise, crisp, and reasonable. “Most companies don’t want to have custom, complicated negotiations with everyone who comes in.”

State your case…

Negotiating a higher salary requires clearly articulating why you’re worth more. Medvec recommends focusing on your differentiators: your background, skill set, and special abilities that match the company’s needs. You’ve already outlined your past achievements in the hiring process, of course. Now it’s time to talk about how you’ll add value in the future — and how that should be reflected in your pay.

Medvec suggests laying out how you’ll help the company generate new lines of revenue, cut costs, attract talent, or enter new markets. “Talk about your exact role and responsibilities, including what specifically you’ll be doing,” she says. Pinpointing how you’re going to tackle their challenges puts you in a stronger position, she says.

Bear in mind that approval matrix, adds Buckmaster. “Help the recruiter tell your story internally,” he says. “Make their job easier with solid arguments oriented around the business. Otherwise they’re going to have a hard time getting it approved.”

… and bring your A-game if you’re aiming extra high. 

While it’s possible to negotiate above the stated pay range, your case has to be bulletproof. Many companies are comfortable with roughly 5% of their employees being paid over the maximum, according to Buckmaster. Pay bands are not an exact science and “sometimes people break the system and end up with higher salaries,” he says. This can happen for many reasons. Perhaps the new hire is joining a smaller company, or maybe their manager is more like a peer, or maybe the new employee is taking on a specialized role, or perhaps they know esoteric coding language that the company needs. “Or it could be that they’re uniquely gifted and hard to get,” he says.

A word of warning though: If you’re paid over the maximum, you might be ineligible for salary increases in the future, so be sure to inquire about the company’s policies. For senior roles, Medvec recommends booking a half hour with an employment lawyer in the city where the company is based. “Find out not just how much others ask for, but also what’s in their contracts, like stock, equity, and employment guarantees,” she says. “It will be an expensive 30 minutes, but well worth it for senior-level jobs.” 

Don’t focus on “fairness,” but rather mutual interests.

Pay-transparency laws were created to help ensure equitable compensation, but it’s not a good idea to frame your individual negotiation around fairness, according to Medvec. “Don’t create a rationale based on what’s right or what’s fair,” she says. Instead, “reference information about what others earn to anchor your request, but keep the conversation focused on the employer’s interests.”

For example, Medvec recommends saying something along the lines of: “I know from publicly available information that this role pays up to $190,000. I believe I’m at the top end of that pay range because I’m uniquely positioned to do XYZ, and I’m confident in what I bring to the table. But I’m also comfortable getting a base salary of $160,00 with a $50,000 annual bonus when I achieve the objectives that are important to you.” This way, you’re making strategic compromises that benefit both you and the organization.

Principles to Remember

Do

  • Appreciate your newfound advantage. Pay transparency empowers you with information about what’s possible.
  • Carve out time to do your homework so you can build a strong argument for the salary you want. 
  • Make sure the recruiter can tell your story to the decision-makers by framing your argument in terms of the business.

Don’t

  • Doubt yourself even if a certain number feels out of reach. If you think you’re worth it, make a strong, rational case. 
  • Belabor what’s fair or what’s right; rather, focus the conversation on yours and the employer’s mutual interests.
  • Make the mistake of assuming you can negotiate indefinitely; companies usually have a clear process and don’t want a drawn-out back-and-forth.



Source link: https://hbr.org/2023/09/how-to-negotiate-your-salary-in-the-age-of-pay-transparency-laws

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