We want to make sure that you understand compensation and know how to negotiate for what ultimately matters to you. Compensation is a very broad topic, and it's not just about your cash compensation, so we want to make you aware of all the dimensions of the things you can ask, and then ultimately how you go about getting them.
We will start with Teal’s approach and how we think about compensation. We will dive deeper using the following agenda:
We want you to internalize that if you don't ask, you won't get it. Sure, there are some really wonderful companies that come out with an amazing first, best and final. That's awesome if you hit the career lottery, and you get one of those.
If you don’t get one of those, you should speak up. If you don’t ask, you definitely won’t get it. Too many of us have anxiety and a concern about the offer being revoked if we ask for more money or if we ask for the things that matter for us, but really then those things become like sand in the career gears and they wear on you.
Get your value. More often than not, companies expect you to do it. We want you to know your value, speak up and ask for it, because otherwise no one else will, and it can actually have quite the cost to you.
Obviously our jobs and our work are about far more than just money. They are about fulfillment and meaning and purpose, but we want to make sure that we get our value and that we negotiate for it, because again, a lot of times companies are expecting it. We want you to think about that and use whatever tools you need to give you that confidence to ask.
Here's a very simple little example:
You want to make sure that when you are in this moment of negotiating a new position, you want to maximize your value and get every dollar that you possibly can.
We've built a little tool, the Compensation Projector, for you to do some very simple projections about what the future could look like. More often than not, we focus on our budgeting and what we need now.
What the Compensation Projector wants you to do is put your compensation starting place. Then it wants you to put in how comfortable you would be changing jobs at a certain frequency. I walk you through an example of using this tool in the video.
Let’s talk about total compensation. What that means is what are all the things beyond just cash. A lot of us talk about our salary or our hourly rate, but what about all the other things that go into a full compensation package?
Compensation is everything a company is providing you in exchange for your work. If you think about yourself as a service provider, you are providing labor service value to a company, and they pay you or they compensate you for all of that. And it's not just cash.
There are a lot of things that go into that compensation in how you get your value. We want you to be aware of what all those variables are so that you can work with them. Sometimes companies might be a little more willing to part with some of them than others if they're concerned with cash, and then maybe they can give equity, maybe they can give more vacation time.
That's what we want you to know are all the dimensions of compensation, which we call total compensation. We’ve categorized those dimensions into five buckets.
Cash carries zero risk for you. It is an agreed amount that you’re going to get. This is the most commonly understood form of compensation.
Variable compensation is dynamic. It’s usually you sharing risk with the company based on performance. We would put this at a mid risk form of compensation because it is not guaranteed.
Equity compensation is when you take ownership in the company in various forms of structure. This is pretty high risk but could be high reward.
Benefits are pretty low risk, and we’ve broken benefits into two categories. This is not a formalized form of benefit language, but we call them level one and level two.
Level One benefits are generally tricky to negotiate because they are done system-wide at the company level.
Level Two benefits are fairly negotiable.
Terms are mid risk. If you commit to certain things that prevent you from doing work in the future, those have value. That is you giving up certain rights. You want to make sure that you get that value in different forms, so we’d put that at mid risk. These are more often than not negotiable.
That is a broad view of what we would call total compensation and the things that you can negotiate for.
We want you to be aware of all of these because some companies may be more or less willing to negotiate these depending on the category. If they're tight on cash, they might be very flexible on terms and benefits. If they're really strict on those, they might be willing to go a little higher on cash or equity.
We want you to know all the variables that you have available to you to ultimately get that package that gets you your maximum value.
Different occupations and different markets might command different salaries, so how do you research your market value? The more equipped you are with understanding the market, the more information you'll have to be able to push for the salary that's right for you.
Determining what you need is really important, right? Regardless of what the market says, your position can command.You need to know what matters to you because it's going to be your decision to decide whether to take this role or not.
There is far more to making a career decision than just compensation. Maybe you're going to get exposure to the right people, maybe this company's going to do really great and it’s going to have a long lasting, positive impression on your resume.
It’s important that you know the minimum that you need to make. You want to calculate your expenses and think about how much you want to be saving each month. This will help you get to a place where you can come from confidence and make career decisions in a confident, proactive way.
A big way to help you get to that place is to make sure that you are financially stable. Understanding what you need is really important before you embark into the negotiation. To help you do that, we've built a simple little spreadsheet tool, the Compensation Projector, that helps you calculate your budget.
Now that you know what you need to make, you want to understand your worth in the market. This is beyond what you need. This is what you deserve or what the market will pay you. The way that comes about is by understanding your expertise, what are your abilities, and skills, or the currency of careers.
That's what you get paid for. Then what is the market willing to pay for those? That is usually dictated by the location, the industry, the company, the stage of the company and the role itself, the occupation. Different skills in the same occupation would actually have a very different market value.
Let’s talk through the market. We’ve broken it into five dimensions that we think define your market.
You want to define the market rate for the role itself. Think about the location. Is the company in an early seed stage or is it a publicly traded company? Think about the industry because industries might pay different amounts of money for different roles. Of course, think about the company itself. It has its own form of compensation and how it thinks about paying.
Here's an example of a product manager role, and here are five very different scenarios on how a product manager could be compensated with pretty much the same level of experience.
Take a product manager that works at Penguin, a pretty straightforward publishing company that focuses on books. They're part of a conglomerate. In New York, the projected compensation, based on some research we did on Paysa and PayScale, it's around $90,000. If you go to Scholastic, which has a lot of digital tooling and they're building more and more apps, it goes up to $110,000.
If you go to an amazing startup in Atlanta, like Calendly right now, a PM makes $130,000. It's a tech company that is profitable and doing well. Then if you look at a company like Airbnb and their salary goes up to $160,000. Then Google is willing to pay $200,000 for a project manager. It's in Mountain View, it's publicly traded, and a really exceptional company, and their expectations are probably higher.
The same person that's going to get a product management job at Penguin may not get that same job at Google, but you can see it. The market value is different for that role. These are the different dimensions you want to think about.
You want to understand how companies pay, and there's different ways to get this information.
There are some other ways that you can also get the data out in the world.
The more research you do here, and the more information you have, the better equipped you will be to be confident throughout this process and ask for the values that you deserve.
It is important that you prepare for a negotiation conversation before you have it. You want to do this early in your job search process because you never know when this conversation might happen. We present the process in a very linear way, but different companies might do it in different ways.
They might ask you what you want to make when you apply. They may ask you right in your interview about your salary expectations. You want to prepare in advance and have a good sense of where you want to go, what your target is, and what the market is willing to pay for the role you’re in.
To start, you want to revisit what matters to you. Think about your values.
Think about where income and compensation falls into all these things because these are all things you can negotiate for. If you want that work life balance. If you want to be able to make sure you're working on the projects that are purposeful and meaningful to you, now is the time to do it.
You have the most leverage at this part in the process, so it's important that you go back and revisit. Understand what matters to you most now, focusing on your number, what is that number you want?
We recommend that you have three numbers. You have your target salary, which is what you’d be very excited to make. Then you would have a number 10-15% above, which would be amazing if you got it. Then you have your walk away number. If you are offered below that, then you just can’t take the job.
Once you start to have that conversation, whether it's in the interview, in the application, or once you get an offer, you want to be prepared and you want to be able to make your case for it.
With that, we've covered the components of preparing and getting yourself in the mindset for that discussion and having those points right in your back pocket so you can have that discussion when you need to.
Let’s talk about the negotiation itself and how you negotiate and some of the things to think about as you go through the process.
The goal is for both sides of the negotiation to feel like they have reached a positive outcome and both feel good. Oftentimes they’ll say that if both sides don’t hurt a little, then you didn’t push hard enough. You want both sides to reach a positive outcome.
Now you're going to have to reset your mindset a little bit.
A tool that we love and think that can help you with your negotiation is going to your work style. Think about what are the things that cause you angst or stress, and what are the things that excite you? Where are you naturally more capable and where might things take you a little bit more effort?
Use the work style tool. Go to it and read each section thoroughly. Hopefully that will give you some tips to better understand your style as you go into the negotiation.
Below is a list outlining the primary work styles and what comes easy and what might require more effort.
Comes easy: Articulating your value and worth
Takes Effort: Listening to others and reading the room before talking
Comes easy: Thinking on your feet during negotiation discussions
Takes effort: Organizing your thoughts and using data to support your negotiation
Comes easy: Listening to and reading people to plan your approach
Takes effort: Advocating for yourself and being assertive
Comes easy: Researching salary information and presenting data to back up your negotiation
Takes effort: Making decisions without enough data
As you go through the process, be prepared to answer salary questions at any part in the process. It might be at the very beginning when you apply online, it might be when you first walk into an interview, it might be at the end of an interview. It might be as a follow up to the interview, or it might be when you get that offer, so be prepared.
Again, it can come at any point in the process. It's nonlinear, we present it as a linear process, but it really is a non-linear process. So you want to do this research, you want to know what matters to you, and then it's going to change per company that you apply to. You want to be good with your foundations and what matters to you.
Be prepared with specific types of scripts for the different kinds of negotiation conversations you might have.
You also want to be prepared in case they come at you with a low number.
Once you get the offer, you don’t need to respond right away. Start by evaluating the offer.
You want to take your time, and you don't want to feel rushed in the process.
You want to know your value. Once you get that offer, you're going to want to make that counter. You're going to want to think about how you want to do it. Think about which medium is best for you to engage in that process, but advocate for yourself, have that confidence and go out and get your value.
The main things we want to make sure you walk away with are to understand what you need to make. What's your market value? How are you going to back that up with research? Prepare for the exchange to happen at any point in the process, and then advocate for yourself, ask for it.
If you don't ask, I promise you, you won't get it. If you ask, there's almost 0% chance that something bad can come of it. So ask, and you will be pleasantly surprised with the outcomes that you'll get.
Good luck with the process. Hopefully at this point you'll have landed a job you're incredibly excited about, with a value that you feel good about, and to help you propel into your career growth at this new employer.