The Compensation Conversation
Every January, we get the calls: New Year = New Job.
People reach out, friends make introductions, and appointments are scheduled. Job seekers arrive well-prepared, able to talk about their successes and their goals. And then, the dreaded topic: compensation.
We always ask the question the same way “Where are you currently and what are you looking for in your next role?”
Money isn’t always a comfortable topic, especially for mission-driven professionals. Making matters worse, people worry about either overshooting the mark or starting with too low a requirement, and then being ruled out of a process or underpaid.
Here are several ways to approach the question, to increase the chances of getting what you want, out of both the conversation and your next offer.
Know Your Numbers
Before any interview, you need to have a firm grasp of three figures:
- Current Cash Compensation – What did you earn in each of the last two years? There’s really only one way to look at this number.
- Target Cash Compensation – Where are you currently compared to other people in similar roles? This should be based on external research, an understanding of what friends and colleagues with similar roles (in similar geographies) earn.
- Required Cash Compensation – What do you need to make in order to be comfortable? This should be based on your unique situation – your financial commitments and lifestyle preferences. This number could be exactly the same as one of the two numbers above, or more or less. It’s personal; only you know the answer to this question.
On the third point, we encourage you to be realistic with yourself. It’s worth noting that we often hear, “I’m making X, but I’m flexible.” This is especially true with candidates switching from the private sector to the typically more resource-constrained nonprofit sector. While we appreciate the flexibility at the outset, it can be frustrating to have candidates withdraw later in the process, after more fully reflecting on what a decrease in compensation would mean in their personal lives.
Know Your Feelings
An interview is not the place to sort through how you feel about any of the numbers laid out above. Once you know what your numbers are, practice discussing them professionally, without embarrassment, frustration, or apology. If you feel underpaid, have some data to make that case, and convey that data honestly and professionally. Did you just inherit a windfall and are now free to take a cut? Practice conveying your newfound flexibility professionally (and with humility).
Look Beyond The Numbers
Of course, compensation is about more than salary – it’s a full package. Think about your current benefits, including insurance (health, dental, vision, life), retirement, and vacation. If there are benefits that are more important to you than others, be sure to name them early. Every organization offers a different set of benefits, and it’s crucial that you’re clear on what your needs are so that there aren’t surprises when the offer comes at the end of a process.
Live By the Golden Rule
Determining compensation is a complex process, driven by a combination of candidate needs, financial resources available, and the broader salary structure of the organization making the hire. Getting to the right place is an iterative process that requires honest dialogue and a commitment to fairness. The best way to get to the right place is to engage in a transparent conversation with whoever is working with you to get to the right place. Here, at On-Ramps, we approach conversations with the goal of finding an outcome that satisfies everyone involved.
If you’re uncertain how to respond, imagine what you would want and need if you were on the other end of the conversation – that will be your best guide.
Note on discussing current compensation
There are many schools of thought about whether it’s fair to ask about current compensation when determining future compensation. Many people have argued that by sharing current compensation, particularly in cases in which someone might have a lower compensation than others because he or she is from a historically marginalized group, the disparity will be perpetuated. We agree that this can be a risk, but that it’s not mitigated by withholding information. The best way to mitigate the risk of underpayment is to have a firm handle on the market rate for your work, at your level, and to share the rationale for your target compensation.
Here at On-Ramps, we’re committed to working with clients to put forward fair, non-discriminatory offers. A candidate’s previous compensation is only one of the data points we use when making a recommendation on the contours of an offer.
– by Alana Lawson