We recently were fortunate enough to have expert compensation negotiator Jennifer Rubin join WealthChoice Community to share tips on how to negotiate and maximize your compensation. Jen is a Partner and Member at Mintz Levin practicing employment law in California and New York. Jen is also the only female partner in her office and runs a highly successful practice. Much of the success she has had in her industry and at her firm can be attributed to advocating for herself and knowing how to ask for what she is worth.
We’ve been hearing for years that women don’t ask for what they’re worth. This failure to negotiate on their behalf has sizeable financial implications.
For women, over the course of our working lives, not getting paid what we are worth means a loss of $1million between less money earned, less money saved less money invested, and less money to live our ideal life.
And this matters because most professional women are working to have a quality of life that is important to them.
Jen shared with us actionable steps that can make a difference in how you are paid. These are steps we hadn’t heard before, and we are very excited to share them.
KNOW THE COMPENSATION COMPONENTS AVAILABLE
Compensation comes in more forms than just salary. This will vary by organization, and it’s important to find out exactly what benefits your firm offers before you negotiate. Ask for the Benefits Plan so you can see the details of all compensation offered. Some common benefits are healthcare coverage, retirement plans and employer matches, Health Savings Accounts, life insurance. But, there are also other benefits that play an important part of your package: equity, education assistance, deferred compensation plans, vacation time.
When you negotiate, you want to focus on what benefits are important to you personally. It’s possible an employer can only allocate a certain amount to salary, but may have more flexibility granting other benefits, such as additional stock options, for example. You’ll need to know what the options are so you can ask for them. Negotiate the “package” that is important to you.
DO YOUR NEGOTIATION HOMEWORK
Another step to take before starting in on negotiating compensation is the data gathering step. Jen emphasized that this is absolutely critical to make your ask.
Take time to compose a “Compensation Resume.” This is a look back on your personal compensation history over the past few jobs. How much have you been paid for what jobs with what responsibility? How have you increased your worth by asking, or not? This can be very eye opening.
Find out what others in the role you want or have get paid. If you are interviewing for a new position you’ll want to get as much information as possible on this role before asking for money. Here Jen suggests asking questions directly to the employer. You are trying to understand where you fit in to the firm’s compensation structure. If you are in an existing position asking for additional compensation because you did an awesome job, you will also want this information. Side note: I personally found out recently that a colleague of mine at a former organization made double what I had been paid for a similar role. We shared similar experience and skills. But I had never asked what the salary ranges were for my role and didn’t have the data to know what to ask for.
Jen suggests asking your employer/prospective employer the following questions:
~What is the salary range for this position?
~What is the next step up from this role in the organization? And what are the salary ranges for those positions?
Your goal is to find out what others are getting paid for a comparable role at this firm, and what the compensation prospects are for you down the road. You might want to consider talking to employees at the firm if this is a new company you are interviewing for. Or confiding in a colleague you trust about what they earn. You can also check out websites Glassdoor and Salary.com for rough ideas of compensation for this firm and its competitors, but you will have more accurate data going directly to the source.
Last part of data gathering is knowing your value proposition. Exactly what value will the organization receive from you? Be realistic here, and give this good thought. Run this value proposition by someone who knows you well and will give you honest feedback.
NEGOTIATE FOR WHAT YOU ARE WORTH
Jen suggests some tips on how to set yourself up for a successful negotiation.
Negotiating as an existing employee:
This is usually an annual conversation you have with your employer on the value you bring them, and why you want to get paid more. Jen stressed the importance of being positive in compensation discussions. This is not the time to be hostile, defensive, and emotional. She breaks this conversation down into three discussion points:
1. This is what my performance was this year (with reference to as much concrete data as you can compile)
2. This is how the organization benefited from my work (again, reference the data if applicable)
3. This is the compensation I want based on the value I am providing the organization
Because you have done the research, you know what the range of compensation is for your role, and the value you brought the organization. In these discussions, it is important to emphasize the value you brought the firm, rather than what you believe you are entitled to.
Negotiating for a new position:
You’ve done your research, so you know what the salary ranges are for this role, and the benefits the organization offers. You have perfected your value proposition, and now you need to negotiate your compensation. Remember, you are negotiating a “package”, which may include other compensation components.
One way to negotiate is to suggest a Package Value as compensation, rather than a salary amount. For example, “I’m looking for a package value of $250k.” This could be a combination of compensation benefits that might include salary, stock options, vacation, deferred comp. Whatever you have determined is important to you, and compensates you based on the value you will bring the company.
You can also negotiate salary reviews. For example, you would like a salary review in six months based on negotiated performance targets. Another negotiation option is a bonus. If the firm offers a discretionary bonus, ask for specific bonus targets so you know the likelihood of actually receiving a bonus. Or you can negotiate a specific bonus amount.
Negotiating for what you are worth, and having successful negotiations, comes down to having the data so you know the playing field, being able to quantify the value you provide the organization, and then putting together a Package that works for you.
When you look at the data that shows women earn less than men for comparable jobs, a good portion of this comes down to our lack of asking for what we are worth. This is not new news, so let’s focus on how to better negotiate on our behalf. Jen’s tips are a great way to start.
