The column executive briefing

Issue #XIX

“If you are the final candidate working with an executive search firm, negotiation of the compensation package is often easier as they act as the buffer and objective third party in facilitating this process.”

Part Two – The second thing to remember is always wait for the hiring company to open up the discussion related to compensation. Dialog concerning expectations and compensation for executive positions should be out-lined as early on in the process as possible, with both sides putting ‘must-haves’ on the table once a mutual interest has been determined. This can sometimes occur during the initial meeting — so be prepared. We know that traditional hiring practices discourage such discussions until well into the process, but each side enters the hiring process with certain expectations and desirables, and the sooner the company and the candidate reveal these, the better for both parties. In other words, some items are fixed and some items are moveable. Successful negotiation depends on discerning between the two, then focusing on how to structure the flexible areas in a way that achieves balance between the fixed. Keep in mind that every win-win negotiation is achieved when both parties understand that each must give a little in order to receive a little — and give a lot if they expect to receive the same in return.

Remember, $350,000 or comp package can come in many different forms — base salary, bonus, stock options, car allowance, and a number of other creative ways to reach that “magic number,” whatever it may be.

Putting everything on the table as early on in the process is extremely important. If the candidate was underpaid at his or her previous job, for example, it benefits them to address that up front — backed by facts and figures — before the hiring company or search firm verifies the candidate’s previous salary. Work from the assumption that everything will be verified. Unexpected discoveries almost always set negotiations back and are often “show stoppers.”

It takes a certain amount of confidence and diplomacy to enter salary negotiations early in the hiring process; this comes from doing your homework. However, it is wise if the candidate not introduce the issue of money first, but wait for the company to do so. Otherwise the candidate runs the risk of either “low-balling” or overpricing themselves — and in every case, turning the hiring company off before establishing your value in the company’s mind. Do not expect that a strong interview will drive up your value if you are currently earning far beyond the company’s stated compensation range.

Oftentimes, too, a candidate believes the new company should make up for a short-fall in how they should be compensated in their potential new role if their current package is far below the going market rate. But demands, presumed value, or desire to reap a six or seven figure salary mean little without the information and more importantly the ability to back it up. Or, from the other side of the table, the dream of bringing in top candidates for industry-average compensation packages rarely solidify in reality unless the company provides additional incentive, either in the form of a strong bonus or growth potential, and usually both.

If everyone involved in the process does their job — gathering supporting data, providing and verifying information, discerning wants from needs, and so on — there should not be any surprises at the end of the negotiation. With a little bit of preparation, coupled with open and honest communications, both parties should be able to reach a good solid agreement.