You’re at your desk, minding your own business, and the phone rings. It’s me, or one of my competitors, eager to lure you away from your (mostly) happy home at XYZ Corporation or the Smith and Jones PR agency. If you’ve been at the same place for a number of years, racked up some solid accomplishments, and our client’s opportunity sounds interesting, something may come of it. New faces, challenges, possibly a new industry and a new location. And of course, more money.
How much more? Big question, and you want to use the move to maximize your earnings. As well you should, since a few years of only modest salary increases can wear down your spirit. Everyone likes a big bump, and we’d like you to see you happy. But one caveat: so much of what we read these days is internet fantasy, or written for an audience far below the compensation levels at which retained executive search comes into play. If you’re a head of communications, about to move into that position, or just a single level down from there, here’s what to expect and how to play it.
First of all, avoid asking the clichéd question, “How much does the job pay?” Flipping burgers at McDonald’s pays $8.25 an hour, you pay some guy thirty bucks to cut your lawn, and civil servants make whatever it says on the chart according to grade, step and locale. Executive positions don’t pay a specific amount, and putting the question that way makes you sound naïve.
Positions being filled by retained executive search firms have a range. Second pitfall: asking us, “so, what’s the range?” Any recruiter who answers this question will regret it because it’s guaranteed that a candidate who is told that the range on a job is, say, $250,000 to $300,000 base hears only the following words: “three hundred thousand dollars.” Doesn’t matter that he/she is currently at $190,000 and the very bottom of the range would be a very good increase. Offer that man or woman $299,999 and he/she will feel cheated.
Executives are lured from one job to another for a figure that the hiring company can afford and that the candidate finds motivating. Period. In the example above, if your salary was already $290,000, you weren’t wildly dissatisfied in your current position and the COLAs (cost-of-living-areas) were equivalent, we’d tell you we couldn’t afford you and ask you to recommend someone else. Unless you were perfect for the job, spoke Mandarin, had a Wharton MBA and our client was anxious, in which case we might go to them and ask them to come up with more cash. That’s the nature of the game at this level. It’s flexible depending on who we get. Which is also hard to talk about with a candidate, because he/she generally thinks he/she’s that exceptional one who should be paid over range!
As a benchmark, in today’s low-inflation environment, think of about a 15% increase. If your last yearly raise was around 5% that puts you three years ahead of the game. The figure will be higher if you’re being moved from Omaha to Los Angeles, less if you’re going from Washington, DC to Milwaukee. If it’s February and you just got a big raise, the new company might offer you a tad less; if it’s November and you’re expecting a raise soon just staying put, the figure is likely to be more.
What if you run those numbers and it just doesn’t do it for you? That happens with some people, and it’s fine if you’re clear with us from the start. “I make $150,000 now and I won’t move for less than $200,000 in my next job.” That’s clear, and we can deal with it. If we think there’s a realistic chance of our client springing for that number, we’ll suggest that we proceed. If we think you’re dreaming, we’ll tell you so, or hold off until we have another search that’s more appropriate. But you have to take the initiative and you have to be specific. Just pussyfooting around when the real issue is that you’re looking for a more substantial bump than usual won’t get you what you want and could brand you as wishy-washy. If you’re going to swing for the fences, do what Babe Ruth did: point to the outfield!
One last point. In this age of the internet, there’s a lot of information out there. Some of it is helpful, some misleading. People love to inflate stories about compensation. “Dija hear what Brian’s getting at Consolidated? It’s a huge package – nearly doubled his comp.” In our experience, he doubled his comp by getting a moderate increase and then counting his former base against his new base, bonus, options at an optimistic level, health insurance, parking space and an imaginary value for a better view out his office window. It makes a better story that way.
Have a straightforward conversation with us about comp, we know what’s really going on out there. We have an interest in your going to our client with a happy enough wallet that you can’t be recruited away by someone else too quickly. We solve our client’s problem only if you hang around long enough to get something done. We don’t want them to break the bank, true, but we also advise them to pay well enough to get someone sufficiently talented to add long-term value. That’s where your self-interest and that of our client coincides.
As always, clear communication is the key to getting a good offer. Know what you make and be able to articulate it clearly (and prove it, we sometimes ask for W-2s). Know what you want. And feel free to talk to us about what you’re worth. Before executive search consulting became widespread and people stayed with a single company their whole career, certain corporations were known to systematically underpay their people. One of the benefits of our field is that that sort of thing is simply no longer possible. We help keep the market efficient, and make sure that someone with real talent who’s underpaid doesn’t remain underpaid for long! Perhaps that someone is you.