For many, it’s the most gut-wrenching part of any job search. Talking compensation is a good thing – as it typically signifies you’re close to an offer – but be too passive or too aggressive and it’ll cost you. Either you’ll end up leaving money on the table, or worse, you’ll scare off a potential offer.
While admittedly there is no perfect strategy behind negotiating compensation, there are a few dos and don’ts to keep in mind, particularly when it comes to investment banking.
Understanding your market value is easier now than ever before. Salary.com and Glassdoor.com are easy methods, but a better option is to talk someone within the firm to understand the general compensation structure, the bonus plan and, perhaps more importantly, the company’s willingness to be flexible to compensation demands, said Roy Cohen, career coach and author of The Wall Street Professional’s Survival Guide. Use your network, use LinkedIn – find someone to chat with off-the-record. Having that knowledge gives you unseen leverage.
“Have a benchmark to presume what the position will bear,” he said. And know the firm in question. “Goldman Sachs, for instance, will tell you to go take a hike” if you press them too much, Cohen said. “They’re not as receptive to negotiation.”
If you bring up compensation early in the process, you’ve shown all your cards, says Hallie Crawford, an Atlanta-based career coach. While money should be a motivating factor in any job search, no hiring manager wants it to be the motivating factor. Leave the money question alone until they show significant interest. “They’ll think: ‘If someone other organization comes along with a better number, this person will likely disappear,” said Cohen.
If the first mention of compensation is a question, offer a range rather than a specific number, said Cohen. It will give you wiggle room later in the process as well as provide the company with incentive to beat your bottom figure. Offer a specific number and the firm is likely to at best match it.
If the range provided is below what you expected or what you require, don’t walk away from the conversation, says Crawford. “If you tell them why, there's a chance they may be able to increase their number, a small one, but you never know,” she said. “Continue through the process and negotiate for more.”
If you are working with a recruiter, let them know your salary requirements upfront, said Cohen. First off, they’ll likely insist on getting your number. Second, recruiters don’t get as turned off with conversations surrounding money as some hiring managers do. They want to fill the position and can often provide more transparency earlier in the process as they don’t want to waste their own time.
It’s pretty difficult advice to take, but if you see opportunity down the road and can afford to take a step back, be willing to swallow the pill, especially if you are moving industries. “Some people will take a lower paying job in order to transition into another industry and it's worth it for them to get their foot in the door,” said Crawford. “So sometimes taking a job with a slightly lower salary is a strategic career move depending on your situation and long term goals.”
“Always begin with gratitude,” said Cohen. Every question or response involving compensation should be prefaced with the fact that you’re highly interested in the position and the company. Give them a hook to grab on to.
“One of the biggest problems I see is when candidates ask about compensation without tying it into the organization,” said Sharon Rybak, head of talent acquisition at BNP Paribas. “You can say: ‘I’m very interested in the company, I think I’d love it here. I’ve walked you through my resume and background, would now be an appropriate time to review my compensation history?’”
When seeking a pay raise, it’s important to relay to the hiring manger that you are indeed taking a risk by quitting a job you know for one that you don’t, said Cohen. Transition risk can essentially be viewed as equity, if properly presented. This is only true when you are given an official offer and are in position to negotiate, he said.
If asked why you deserve more money than you are currently making, talk responsibility, not need. “Say: ‘You discover I bring a lot to the table, you’re asking me for more. My expectation is that it will be reflected in the numbers,” said Cohen.
When in doubt, if you’re extremely interested in the position, “take the coward’s approach,” said Cohen. “Say you are extremely excited envisioning working here, and ask if there is any ‘wiggle room’ to help make your decision an easier one.”
If you’re not dying for the job and just want the pay raise, heck, be as aggressive as you want.