Clients who come to us looking for support in their executive career searches vary by personality and experience as much as the rest of the population—with one exception. Often these high-powered executives think they know everything there is to know about negotiation. Perhaps in their respective fields, they do, however, typically when they negotiate their own compensation (unless we help them) they leave a lot of money on the table.
Why is that?
Dan Resendes, our Chief Consulting Officer, who has been supporting clients now for 17 years points out the following common mistakes executives make when approaching the negotiation of a new compensation package:
Hubris – they think they already know everything there is to know about this subject. Consider this: the average executive negotiates a package four or five times in his or her lifetime. We currently do this four or five times per week. Who do you think has more experience?
Myopia – most executives think only about the salary. That is only one item on our comprehensive compensation working list, so needless to say, if you only focus on salary you are definitely leaving money on the table.
Starting Point – many candidates ask us to research the average salary for a position, but that seems to us to be an unfortunate place to start any negotiation, rather than the full range of the compensation spectrum.
Email – some executives are uncomfortable face to face or even virtually when they are asking for concessions, so they hide behind emails. This is a bad strategy as it eliminates the necessary signaling and reading of signals that goes into all human communication—especially a process as nuanced as negotiating compensation.
Culture – company executives will often perceive candidates’ attempts at negotiating compensation as “outside of the culture, illogical, or unreasonable,” because candidates do not take the time to ask the right questions or do the research to understand the potential employer’s norms and mindset.
Our comprehensive, five-step career change process includes a number of sub-steps that assess and then redirect clients’ compensation strategy. We begin by understanding all ways in which the client has been remunerated in the past (what is normal and comfortable for the client?). Then we typically examine the opportunities in the benefits area—a compensation element that many clients would otherwise overlook. Additionally, we examine the further potential components related to relocation expenses and severance terms.
In total, over the last 30 years we have assembled an impressive list of more than 100 compensation items with which we prepare our clients to leave no stone un-turned. Of course we counsel our clients to always obtain an offer in writing no matter how cordial the relations are with the prospective employer, because only when you hold a valid offer in writing do you really have any significant leverage in the compensation negotiation.
There are also numerous cultural nuances that we coach our clients through, as well, for example, when the prospective employer asks, “What salary do you require?” we generally suggest that the client should not immediately offer a number, but rather respond with something like, “I am sure that your company has established a compensation range for this position and I would like to be respectful of your policies. When you look at my background and accomplishments, all I ask is that you make me a fair offer.” Despite clients’ natural inclination to grab the offer and run, this carefully choreographed stage of the negotiation can go on for a while as we help our clients understand the full range of compensation available through a company’s normal processes and policies before finally reaching a conclusion.
Does it work?
Well, we have helped more than 82 executive clients land the jobs of their choice (see the evidence on the Hiring Line) since the pandemic got serious in April, so, in a word: YES.
Here are a few anecdotes on specific compensation negotiations (this year) to underpin our point:
Client K: “The $10,000 signing bonus came as result of our conversation regarding offer negotiation and they ultimately came up from 60,000 shares to 67,500 The shares are worth $3.00 a share right now. About a $30,000 increase over the initial offer!!”
Client D: “Julie helped D with the offer, which came in better than expected, with stock options, 401(k) and a gas card (which he received because he pointed out the extra commute!). The salary is more than he made before and the benefits cost less.”
Client J: “You are amazing!!!!! Raised the offer up by over $80,000 PLUS […] the additional Restricted Stock Units […]! Congratulations on your hard work and the teamwork of Donna (sales), Hiyam (Clarity), Lori (writing), Christina and Jessica (research and admin support) and the shared knowledge from the TBG brain trust. […]”
Client T: “Came to us after being fired from his old job. His former compensation package was $660,000 as a CTO. We built out his value proposition, coached him on how to demonstrate that he is a profit center, treating technology as a business, and reconfigured his resume and verbal articulation expertise. In three months, he ended up obtaining an offer for $980,000. We successfully assisted T in negotiations, and he ended up accepting the opportunity at $1.2 million.”
So, why take the risk of leaving money on the table when an expert in career management can help you significantly increase your total compensation? And as long as you’re at it, why not go with the best? Contact the Barrett Group today.