Catching You Up

If you missed last week’s blog post then you did not get the chance to meet Allison Behringer, her podcast called The Intern, the pay raise negotiation she had with her boss, James, and my first four recommendations to get a more equitable raise.  This week I share my final four (could the NCAA come after me for using that term?) recommendations for Allison and you, the readers.

Living Wage, Living Large, and It’s All Relative

At one point in the negotiation, James states he remembers Allison said she was “living large” with her current pay. Gleaned from the podcast, Allison came from working at a non-profit for $14,000. She has more than tripled her income in this one move. I worked for $14,200 in my second year of full-time work in 1986. I can only imagine the relief of actually earning money that sounds like 21^st century income instead of money Alex P. Keating would have made fun of.

Allison also seems to be responsible for her own financial security and no one else’s financial security. No spouse, ill parent, children, or other dependents. Had she three children, she probably would not have ever said “living large.” More importantly, should the pay for a job change based on the personal situation of the individual? Does this mean that all childless individuals should always earn less than parents? Should single people earn less than married people?  Such logic has nothing to do with the value of the job.

My Advice to Allison: Agree that you made that statement which she did. Then state, “that may be true compared to my work at a non-profit but that has absolutely nothing to do with the value of the job. I’m here looking for the appropriate title and pay for the job that I am doing, podcast producer and talent. An off the cuff comment does not negate that I am not earning the market value of the job.”

Friends and Human Resource Should Not be Go-To People

For the most part, Allison is talking with the wrong people. She chats with Maya, her go-to person at work. Maya is in Human Resources (HR) and Allison’s thinks, “so if anyone knows about negotiation and what’s a reasonable salary ask at this company, it’s her.” What Allison is forgetting is that Maya ‘s job is to help the company get the best talent for the least pay. It’s her fiduciary responsibility.   According to one survey 1 in 5 HR managers are even aware of a gender pay gap at their company.   Human Resources is the last place any of us should go to for help in our negotiation because they will be either directly involved in the negotiation or supporting the negotiation in the background. Allison just gave James all the information he needs on what she plans to do in her negotiation by talking with Maya. Maya also did not give any advice that I would call very helpful. Allison even states in the podcast some of the advice seems odd.

Allison also talks with her roommate, Avery. Avery urges Allison forward by stating, “I would be surprised if they don’t increase your salary.” That is great for a cheerleader, which is the role a roommate should play.

My Advice to Allison: More important than a cheerleader, Allison needs someone who is on her side only (not HR) and understands negotiating (not her roommate).

More useful than planning all the reasons of why Allison will get the raise is to list all the arguments James will give her as to why she will not get the raise and create a response to each.  Allison, I so wish you got one of my video courses or worked with me directly to prepare for the negotiation.

What’s Your Impact

Allison mentions the 70,000 downloads and sponsorship she has landed for the podcast. The thing that is skimmed over is the business the podcast has generated for the company. James agrees that the podcast is bringing in business. That is the number I really want to know about. That is the number that opens budgets and gets really good pay raises.

My Advice to Allison: Ask for a report from sales or marketing that shows the number of leads and the closed deals The Intern podcast has generated. In a perfect world the report will show you hard numbers such as 100 leads that generated 5 closed deals worth $100,000. Find out the close percentage and the average value of a deal from a sales representative if you cannot get all the data so you can estimate those numbers if you need.

What’s Your Worth

I saved the best for last. Know your worth and value are common comments when talking about women and pay negotiations. I find it a troublesome expression. If you have gotten this far through this blog post, you will notice the focus is on the value of the job, not the value of the individual. I think this is a critical switch in perspective. It takes the personal away from things. This is important for when an employer tries to make you believe you are less than capable and therefore not worthy of earning the average pay of a job. Focusing on the value of the job instead of yourself will embolden you to think, “Heck, if I really am not even average then I would be fired. I’m not fired so I should earn at least the average value of the job.”

My Advice to Allison: Think about job market not the Allison market. Just like a house, a job has an ever-changing market. Each year check out the going rate of the job you do and see if you are being paid appropriately. In the future use online sites like Indeed.com, Salary.com, and Payscale.com instead of talking to a few people. That is not enough information to know what the market is. Other ways to research the market include headhunters and professional associations.

My Advice to Everyone: Listen to Allison’s amazing podcast. It gives you a chance to hear an actual pay raise negotiation. It’s not nearly as bad as everyone envisions. Allison got a raise just like 75% of people who negotiate for a pay raise. If Allison and you take some of the advice from this blog post, the raise will be more inline with the market value of the job.   Thanks Allison for this great opportunity to learn from your experience.

Thanks to Leah Moschella of Boston GLOW, I know about this amazing podcast, The Intern, produced by Allison Behringer. I am now a fan of Allison. The episode entitled What’s Your Worth shares a real life negotiation for a pay raise. To the best of my knowledge it is the only real life pay raise negotiation that we are allowed to be a fly on the wall. I had the chance to talk on the phone with Allison. She confirms this is not the full story of her negotiation. She crafted the many parts of the process into one succinct, enjoyable, and engaging story. The resulting story is a master class for everyone. Employees should listen to hear a negotiation before they have their own. Managers should listen to learn what is going on in the employee’s head. Men should listen so they can hear how different women’s negotiations sound from their own.

Spoiler alert:  Allison got a raise.  I believe there was the possibility for a bigger raise.  What could have been done differently to get an equitable result for the employer and the employee? Many things. There are eight things in particular that I believe are worthy of highlighting. This blog post will cover the first four. I’ll post part two with the remaining four next week.

F**cking Unheard Of

Here’s what James the Manager said as reason for giving a raise that keeps Allison underpaid.

     James the Manager: What I’m saying is, like, you’re six months in. You have this product that you essentially own. You are driving it. That’s kind of f**king unheard of. That’s really an amazing opportunity.

What I’m saying, James, is that Allison should be paid for the thing that she is doing that is f**king unheard of. You would not let her own the product if she was not good enough to own it. She far exceeds expectations and is doing producer work with an intern title. Let’s pay her as such instead of talk about her work as an opportunity for her career.

My Advice to Allison:  Agree that you own the podcast and that it is unheard of.  That is exactly why you deserve better pay.  Allison is like most women who according to McKinsey, have to perform while men only have to show potential for promotions.  Performing at such a high level should be rewarded now with pay and a possible promotion, not later.

Intern

Allison was hired as an intern. Internships by definition are designed to give experience to people with no experience. Internships have an expiration date. They are not to last forever. When hired, the agreement Allison signed stated that the compensation would be revisited in three months. It is now six months after she was hired. She is producing and hosting a podcast with 70,000+ downloads and sponsors. Both are above the success factors established for the job.

My advice to Allison: The ask should not be for a raise but for producer title and the appropriate pay as a producer. Comments that “To be fair, to be fair, like no intern is getting paid that,“ would not be made as objections to appropriate pay if the ask is different from a raise with the same title.

Not Cool

     James the Manager: We want to, like, look at this and then again at the end of season   one. More because we think it’s, we just think it’s, like, not particularly cool to sort of, kind of, renegotiate right in the middle of something.

Brilliant move, James. He just made Allison feel unprofessional for holding James to the agreement the company made with her to review her pay and that they are actually three month delinquent in doing so. Brilliant.

My advice to Allison: Call him on it. It’s disingenuous. “James, it’s not ‘not cool.’ It’s the agreement we made when I joined the company.”   Allison does not share in the podcast that there are any stipulations other than time passing for the review. If that is the case then she can counter James when he says, “three months in, we didn’t have anything.” Her response should not be to agree with him but to say, “there were no other conditions for a review other than time. I guess I’m the one who could say ‘not cool’ to changing the rules in the middle of something.”

Percentage is Meaningless

James the Manager can get as please as he wants about giving a 10% raise but as the math and the research shows, he’s at best 25% of the way to an appropriate raise. Let’s walk through it.

Employers are budgeting raises for 2016 at 3% on average. The rule of thumb is you should never change jobs unless you get a 10% increase than what you are currently earning. Well, if that is the rule of thumb for candidates then it’s the rule of thumb for employers to offer about 10% more than you are currently earning regardless what the market value of the job is. That is the first problem with using percentage to figure out a raise or starting salary – it does not take into account the current market rate. The other problem is that statistically women and people of color are earning 20%+ less than men who are white or has Asian ancestry.  Statistically, a 10% raise will not get them to the appropriate pay.

Here’s where those math word problems from school come in handy.

Allison is earning $50,000. According to her research, her job should pay $70,000 – $80,000. What percentage increase does Allison need to earn the appropriate amount for her job?

(70,000-50,000)/50,000 = 20,000/50,000 = 40%

(80,000-50,000)/50,000 = 30,000/50,000 = 60%

Answer is 40% – 60%. An average 3% pay raise will not get Allison to pay equity. A 10% pay raise, which is considered the equivalent of a promotion or new job is not enough to get Allison to the market rate for the job.

My Advice to Allison: Ask James why he thinks 10% is such an amazing amount. He states 10% with such flare that he obviously does. After he responds, talk how percentage is meaningless when you start so below market. An intern should start below market of an employee but using that intern pay to determine full-time real employment pay is meaningless. It is for this reason 10% is a meaningless reference point.

To be continued next week in part 2.

Women Will Negotiate Salaries

One of the themes in my blog is that women tend to negotiatiate their salary less often than men.  Recently in the National Bureau of Economic Research, Andreas Leibbrandt and John A. List published their findings regarding this issue.  Interestingly (at least to me) the results indicate that women would actively negotiate their salaries if they were invited to do so at a slightly higher rate then men.  This can be accomplished when a job advertisement includes a reference to the salary being negotiable.  Specifically the listing included “…but the applicant can negotiate a higher wage.”

I love the experiment but I am not a fan of the language used in the experiment. I  love that Leibbrandt and List do a good job showcasing that women can and will negotiate their income.  It highlights that negotiating is happening some of the time and can happen more often with some relatively small alterations to job postings.  To me the language seems a bit too inviting.   Companies plan for and expect compensation negotiations when hiring yet they do not create a proverbial billboard to advertise the fact.  They may expect it but they truly love when their first offer is accepted.  They like using the savings for other resources or the bottom line.

Invitation in Invisible Ink

The take away for women is to know that  “…but the applicant can negotiate a higher wage” is always there for every single job opening but in invisible ink. Two main concerns  I hear from women about negotiating are the fear of the job offer being revoked and starting a working relationship on a bad foot.   The invitation to negotiate seems to diminish such fears.  Realizing that the invitation like the salary itself are often not conveyed in the actual job listing is a good first step to overcoming the fear.

What other fears do you have about negotiating your salary?

Copyright 2012 by Katie Donovan

A recent post on BlogHer.com is a great recount of a woman’s recent job search and how she tried negotiating her salary for the first time.   I recommend reading the post because it illustrates two key aspects of negotiating:

1. Research is the foundation to establish a target salary
2. You don’t need to make a specific counter-offer to be successful

Spoiler Alert

You’ll be encouraged to know that in the end she gets a bigger salary than she set as her goal.  That’s a great success!  The process to get there had a couple of missteps but we all have to crawl, walk, and then run when we are learning a new skill.    Let’s examine and learn from her negotiations.

Improving Negotiation Tactics

Her first job offer came with a salary offer that was 8% lower than her target salary.  She then  “…told the human resources person with whom I was communicating that I’d like to make my target number, but that I’d consider additional benefits (i.e. more paid vacation days) in lieu of salary if the salary number was non-negotiable.”

The positive is that she opened her mouth.  The areas that have room for improvement are:

1. She told her target number
2. She stated that she was open to additional benefits in lieu of salary

Why are these areas for improvement?  First, you should name a salary greater than what you want because the negotiations could go 2 or 3 rounds.  If the first salary you name is your true desired salary then there is no place for you to go but below your desired salary.  Not a fun place to go.  Second, stating what you would consider in lieu of salary is negotiating against yourself.  All that does is weaken your initial negotiation.   The hiring manager or recruiter will come back with or without a counter offer.  You don’t need to do their work for them.

She was unable to come to an agreement with the first company.  Then she received a second job offer and the salary was 17% below her target salary.  She repeated the same process from the first negotiation and  was again unable to come to agreement.

Confidence and Negotiations

And then she received her third and fourth job offers.  Both were above her target salary.  One was 117% and the other 141%.   This is when she was brilliant.  “After I told each of the companies about the other, (without making any requests, save a request for a few days in which to make my decision) each presented me with another offer.”

Truly the confidence she gained from having two offers helped her negotiate with each company.   But notice she never stated that she needed another offer she just let them know that she needed to consider the offer and she let them know why.  They did the work to sweeten the offer.  She was able to get both companies to make two additional offers by just letting them know each time that she needed to consider the offers

I believe there are three great takeaways from this first-person account that any beginner salary negotiator can use.

1. Research salaries to set a target salary
2. Act with confidence
3. Explain why you need to consider an offer

Combined these three tactics should help you receive a better salary and benefits package.

@ Copyright 2011, Katie Donovan. All rights reserved. Reproduction without explicit permission is prohibited