Beware of Salary Surveys When You Negotiate

When you are asking for a raise, or applying for a new job, it’s often helpful to know the typical pay rate for your job function and geographic location. Some employers choose to pay a bit above or below the “going rate”, but it’s helpful to have a base line. Salary.com has done a nice job branding themselves as a good resources for job seekers, but can you rely on it?

Going in to negotiate with HR using information they distrust is never a good plan, and most of the free salary websites that accept user generated input are not viewed as credible by HR. You see, HR folks trust salary surveys where the input comes from payroll systems, not self-reported salaries. I spend quite a bit of time with HR professionals and am part of a few communities that share information with each other. Yesterday someone posted a question about which online salary surveys they found credible. About 20 people answered, and uniformly they picked Payscale over Salary.com. (Personally, I never look at either site). 

My point in writing this post is simple. Know how credible your data is before you negotiate with it.

Disclaimers:

1. The reality is that few HR people use online surveys. Most larger organizations simply pay for a professionally administered survey … there is too much at stake when you get salaries wrong. Unless you have a friend who works in compensation, or you are willing to pay big bucks, you typically will not be able to get your hands on one of the professional surveys.
2. I am not endorsing any site, or being compensated by anyone to write this blog post. 
3. I understand quite a bit about salary negotiations, but do not consider myself a compensation expert. That’s why this post is about negotiating strategy, not compensation.

Working with a Search Firm: Interview Etiquette

One of our most popular posts was on “How to Introduce Yourself to a Search Firm.” But what happens when you have already been contacted by a search firm and are going on an interview with one of their clients?

What is the etiquette for working with the search firm? What is expected of you? What can you expect from them?

Some firms may differ, but in general these are the expectations:

• Before the Interview:  The search firm will give you the date, time and location of the interview, and usually parking information and/or the closest metro stop.  The search firm will usually give you the name and title of everyone you are expecting to meet, and how long the interview is expected to last (but of course good interviews often run overtime). Your role: Your job is to research the people and the company, and to write down at least a dozen intelligent questions you would like to ask. (Hint: “Do you have Dental insurance?” is not an intelligent question). To arrive to an interview without preparing questions in advance is a breach of etiquette and for many interviewers, is an automatic strikeout. If you cannot think of what to ask, simply ask your search firm contact for some ideas, or see our post on how to research a company.
• Traveling to the Interview: Be sure you estimate your travel time properly and to bring the phone number for both the search firm, and the person you are meeting with.  Your role: Your role is to leave ample time for traffic and to arrive 10 minutes early. Late is simply unacceptable for a first impression. If you are going to be even one minute late, etiquette requires you to call ahead to the person you are going to meet, and to apologize again when you arrive. An astonishing number of interviews have been ruined by ignoring this simple point of etiquette. If you might be late, don’t hope for the best, just make the call at least ten minutes before your interview time. The benefit is that once you’ve made the call, you can relax. (You can always try calling the search firm as a backup plan, but bear in mind that they will likely be in another meeting and not available on short notice.)
• During the Interview:  Your role is to give crisp, clear, concise answers to most questions.  On a first interview, the hiring manager usually has to cover a lot of ground, so don’t get bogged down in protracted answers in any one area. Practice your answers, so you can keep them to about 3 minutes or less.  (Read more about the STAR method of answering questions here). Your search consultant will be able to brief you on the kinds of topics that will be covered, but they really should not be coaching you on how to answer specific questions.
• After the Interview: Most search firms want to hear from you right after the interview concludes. In my experience, candidates are rarely able to judge how it went, so typically we ask whether you are interested in proceeding to the next step if it is offered, and whether the hiring manager mentioned any next steps. Your role:  contact your search consultant immediately following the interview. Don’t make them call you to get feedback. Hiring managers always want to know your level of interest, and it’s embarrassing to your search consultant when they don’t know where you stand because you did not contact them. (Remember, we have no idea what time your interview actually  ended, so we can’t call you).
• Delicate issues: As the third party in the conversation, your search consultant should be able to address any difficult questions for you. Do you need to see a copy of the company benefits? Do you want to find out what happened to a prior employee in this role? Are you concerned that it seems like the department has a lot of turnover? What kind of salary are they considering?  Your search consultant can look into these issues for you, or suggest how you might diplomatically raise these points with the hiring manager.

Hot Career Sectors

A recent post focused on how you should follow your natural skills and interests to land your next job. But even though you shouldn’t choose your job based on money, it is interesting to see which industries are doing well (and paying well!) in this still-grim economy – especially relevant during this holiday season.

Many of the high-paying careers listed from the PayScale.com study are positions that require a bachelors degree (or higher?) and very skilled expertise.

So which jobs pay best after three or four years of experience?

• Mechanical Engineer – $73,200
• Software Developer – $82,400
• Electrical Engineer – $84,700
• Web Developer – $60,900
• Financial Advisor – $93,900
• Employment Recruiter – $55,400
• Construction Estimator – $67,400
• Project Engineer, Construction – $69,200
• Manufacturing Engineer – $73,900

Is College Worth It?

The Pew Research Center recently conducted two surveys to determine whether college is worth it. One was a telephone survey taken among a nationally representative sample of 2,142 adults ages 18 and older. The other was an online survey, done in association with the Chronicle of Higher Education, among the presidents of 1,055 two-year and four-year private, public, and for-profit colleges and universities.

Here is a summary of key findings:

• Cost and Value. A majority of Americans (57%) say the higher education system in the United States fails to provide students with good value for the money they and their families spend. An even larger majority—75%—says college is too expensive for most Americans to afford. At the same time, however, an overwhelming majority of college graduates—86%—say that college has been a good investment for them personally.
• Monetary Payoff. Adults who graduated from a four-year college believe that, on average, they are earning $20,000 more a year as a result of having gotten that degree. Adults who did not attend college believe that, on average, they are earning $20,000 a year less as a result. These matched estimates by the public are very close to the median gap in annual earnings between a high school and college graduate as reported by the U.S. Census Bureau in 2010: $19,550.
• Student Loans. A record share of students are leaving college with substantial debt. Among those who do, about half (48%) say that paying off that debt made it harder to pay other bills
• Why Not College? Nearly every parent surveyed (94%) says they expect their child to attend college, but even as college enrollments have reached record levels, most young adults in this country still do not attend a four-year college. The main barrier is financial. Among adults ages 18 to 34 who are not in school and do not have a bachelor’s degree, two-thirds say a major reason for not continuing their education is the need to support a family. Also, 57% say they would prefer to work and make money; and 48% say they can’t afford to go to college.
• Split Views of College Mission. Just under half of the public (47%) says the main purpose of a college education is to teach work-related skills and knowledge, while 39% say it is to help a student grow personally and intellectually; the remainder believe that both missions are equally important. College graduates place more emphasis on intellectual growth; those who are not college graduates place more emphasis on career preparation.
• For Most College Graduates, Missions Accomplished. Among survey respondents who graduated from a four-year college, 74% say their college education was very useful in helping them grow intellectually; 69% say it was very useful in helping them grow and mature as a person; and 55% say it was very useful in helping them prepare for a job or career.
• Above All, Character. While Americans value college, they value character even more. Asked what it takes for a young person to succeed in the world, 61% say a good work ethic is extremely important and 57% say the same about knowing how to get along with people. Just 42% say the same about a college education.
• Declining Student Quality. A majority of college presidents (58%) say public high school students arrive at college less well prepared than their counterparts of a decade ago; just 6% say they are better prepared. Also, 52% of presidents say college students today study less than their predecessors did a decade ago; just 7% say they study more.

For more about the two Pew surveys, go to the Pew Research Center site at: http://pewsocialtrends.org/2011/05/15/is-college-worth-it.

Talk About Pay Today, or Suffer Tomorrow

In a very useful article in The New York Times, Phyllis Korkki offers specific tips for how new employees should negotiate their salaries.

In this economy many job seekers would be thrilled to be offered a job at all, she notes. How ungrateful and even risky, they may think, to haggle over salary when the unemployment rate is so high.

But failing to negotiate with a new employer can be a mistake that takes years to undo, says Linda C. Babcock, an economics professor at Carnegie Mellon University who specializes in negotiation. Because most raises are based on percentage increases, she notes, all of your future raises — along with contributions to your retirement account — are likely to be lower than if you had negotiated a higher salary at the start.

Generally, if employers try to broach the salary issue early in the interview process, you should do everything possible to defer this discussion, and be as vague as you can. And once you get an offer, don’t accept it on the spot, she suggests. It is perfectly acceptable to say that while you are excited about the job, you need a few days to think about it.

Before the first interview and after the offer, gather as much salary intelligence as you can about the position. This will help determine your true value in the marketplace. In general, when you are ready to negotiate, “don’t ask for what you want, ask for more than you want,” Professor Babcock says. “You could typically ask for at least 10 percent more than they offer you.”

Once you have your number on the table, the employer might say, “Oh, we can’t possibly do that.” In many cases, that does not mean the negotiation is over, Professor Babcock stresses. “You say: ‘How close can you come to that figure?’ ”

If the company is reluctant to come closer, she says, you should consider asking, “Can we meet in the middle?” That’s often effective, she adds, “because it just seems fair.”

Job Offer Salary Negotiations Made Simple

Every so often, I see an otherwise highly qualified candidate try a negotiating tactic that results in their job offer being withdrawn, or worse, starts their employment off on the wrong foot.   They fail to understand that commanding a high salary is not about negotiating, but rather about proving value.

If you are new to negotiating, you might hear people who tell you not to negotiate salary until a company makes you a job offer.  One theory behind this “wait until the bitter end” advice is that your perceived value to the future employer goes up the more they get to know you (the reality is that it can just as easily go down).  A second theory behind the “wait” advice is that you have more leverage once they decide you are the one (not necessarily true).   A third theory is that whoever says their number first is at a disadvantage (again, not true).  But while all of these theories sound fine in your head, they ignore the context of interviewing.

 The truth is that your perceived value to an employer is always taken in context relative to all the other people competing with you for the same position, and as the job seeker, you never have good information about all those other people.

A well designed interview sequence looks at salary considerations the whole way through the process.  Smart employers know that salary is far too important to be left to the very end.    So if you have been signaling comfort level with one salary all the way through, and suddenly change your demands, your rookie negotiating tactics just make you look untrustworthy and unreliable – not the kind of person anyone wants to hire.

So if you want to command the highest possible salary for yourself, skip the negotiating strategies and instead focus on building your business case.  Only two things matter in salary negotiations, market rate and the premium a top performer can command. 

• If you want to know the true market rate for your skills, make friends with someone in HR and ask them to look up your title using two or three reputable salary surveys (not the free online salary calculators).
• To command a premium over market rate, you must prove the business impact you can make - help your future employer understand why you are worth that premium.   THAT is what the interview process is for, and THAT is how to negotiate the highest possible salary.

…. and never, ever, talk about your personal budget and how much you need to live on, that just proves you have no idea how the real world works.

How to Ask for a Raise: 7 Tips to Help You

You feel you deserve a higher salary.

Simply waiting for your boss to give you a raise won’t work. If it’s time to ask for a raise, how should you do it?  About.com gives us seven tips to help you accomplish that goal.  You need to do some research before you are ready to ask.

1.     Find out how much others working in your field are earning.
The first thing you should do before you ask for a raise is learn about typical salaries in your field. Look at salary surveys. If you belong to a professional association, check with it to see if it has salary information available.

2.     Figure out how much of a raise you deserve.
Salary calculators and surveys generally present you with a range of salaries. Determine where you fit into this range. Consider the number of years you’ve been working in the field and the length of time you’ve worked for your current employer.

3.     Evaluate the financial health of your employer
If your employer is having financial problems, this is not the right time to ask for a raise.

4.     Prepare your argument
Think of it as selling yourself just as you would do if you were trying to get hired. Make a list of all the things you’ve accomplished for the employer. Start with the most recent accomplishments and work your way backwards. Also make a list of your relevant skills — the things that make you successful at doing your job.

5.     Decide what you will do if you get turned down
Before you ask for a raise think about what you will do if your boss says “no” or agrees to give you a raise that is much smaller than the one you want.

6.     Set up an appointment to talk to your boss.
Show your boss how serious you are. Treat this as a business meeting. Set up a time to meet with your boss. Don’t discuss your raise via email, at the water cooler, or by telephone (unless you and your boss don’t work at the same location).

7.      Present your case.
Your boss may agree to give you a raise immediately. If that doesn’t happen you  may have to do some more convincing. For more, see