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Welcome to the JoyPowered Workspace Podcast, where we talk about putting the humanity back into HR. I am Susan White, a national HR consultant, here with my co host, JoDee Curtis, owner of Purple Ink and author of JoyPowered, a workspace game-changing fast-selling new book. JoDee, today’s topic is salary negotiations. What do we know about salary negotiations?
Yeah, always a difficult topic, right, for both the individual and the HR person, the manager, anyone on the corporate side, sometimes to think about how to best negotiate salaries. But in the November 2016, issue of SHRM’s HR Magazine, a few statistics they included were that salaries in the US have actually decreased 3.1% on average since 2008. However, all is not equal. Employees in lower paying and entry level positions have experienced a 14% inflation adjusted drop in wages since the recession of 2008. Why do you think that is?
You know, I don’t know, it’s been a long recovery, hasn’t it? And when we look out there, some states have been really aggressive about raising minimum wage, but others have just really beared down and really tried to keep wages low.
Right. Right. That’s my sense, too, is that since the recession new people were hired in at actually lower pay than maybe where the norm was before that, that is really reset that number.
Must be the supply and demand, the perception by employers and obviously the reality, they’re able to get people at lower wages for those entry level jobs.
Right, right. another statistic they included was that senior managers have seen a 3.5% real salary growth in the same period. So it’s not across the board, the higher earners are earning more, but the lower paying positions are earning less.
Doesn’t it feel good, does it?
Yeah. So Susan, when do you think, when is the right time as an employee to negotiate a salary?
You know, I really believe it’s before you say ‘yes’ to that employer. Most of your bargaining power exists before you agree to go join a firm. So as I talked to my clients, I talk about, you know, what you want to first of all, figure out what it is you want to do with your life and then you want to figure out where you want to do it. And then you really need to make sure before you sign on the dotted line that you are feeling comfortable and good about that salary. So that’s really the time I think, to do your negotiation.
Right. And how do you find that information on what the salary for a position should be?
You know, having worked on the corporate side for a long time, I know we try to be very careful before we share how much we’re willing to pay for a job with a candidate. Because you know, when you think about it, you’re trying to figure out how do I get the best value for the firm at the lowest price, right? And on the opposite side of the table, you have the job candidates trying to figure out how much can I get? So it’s not easy. Sometimes you won’t find it often in a job description, you know, how much is the salary range, so you have to do some homework. Some places that I recommend people go is go out to payscale.com or glassdoor.com, or even salary.com. You know, there’s three different ways of going out and taking a look on the internet, recognizing that it’s self reported, usually, information. JoDee, where do you usually send people?
To those exact same places. And I think sometimes too, it’s asking questions, although that you know, can be trickier but asking people who worked for other companies what, they believe or what they might be making, which of course, is an awkward question. And we had to be careful with that different companies have different philosophies on pay, some companies paid less, but have better benefits. Some companies pay more, but have less benefits to offer. So it can be dependent on a company’s pay philosophy. Do they want to be a leader in pay? Do they want to be on the lower end? Do they do they need to pay more to get people to come to work in those positions? Or do they have a culture that people want to work in that they don’t have to pay as much?
I think that’s a great point. And you also have to understand that some places when you go in, wherever you come in, maybe where you stay, and they sent you by bonuses, and so on and so forth. Other places have very formal review processes, and you might just get yourself onto a ladder. So where you start may not be nearly as important, you know as to what’s going to happen to you once you’re there. You know, JoDee, there is another resource that I have found to be very valuable. It’s the Department of Labor’s occupational Information Network, Onet. And I think it’s called I think if you want to look at it online, you go to onetonline.org. And what’s nice about it is that it’s the Department of Labor, your tax dollars and mine at work, because the Department of Labor, one of their responsibilities is to keep the American public educated about professions in the US, and they will talk about all different types of careers, they will explain all the knowledge, skills, abilities, other attributes you need to have in order to be in that profession, as well as they will report whether it’s a growing profession or if it’s a contracting one, and average salary by net nationally, and by state.
Right. Interesting. And that, of course, is important to the process as well as understanding what types of roles you’re looking for. Is it an expanding position, is it a position that companies have difficulty in hiring for? Or is it a position that they are going to get numerous qualified candidates to fill that role as well?
So, JoDee, the rule of thumb used to be before you would really consider moving to another company to a new job, the rule of thumb that I’d always heard was that you should be looking for at least a 15% increase. Have you heard that or do you have any guidance on that?
I have not heard that 15% number, or any number really, but I think we have to think about why are we changing jobs, and what is it that is most important to us and that salary and increase in salary might be nice for a while, but might not be really everything we’re looking for. Is it about the benefits? Is it about flexibility? Is it about having more paid time off? Is it about are you unhappy and the position you are and you’ll be more engaged or able to use your strengths more in a different role. So we have to think through all those options, I think before looking at a different job and expecting that 10% or 15%, or whatever that number might be, is really worth it.
I think that’s really fair. You know, you brought up a great point that… what really makes you happy? I wonder, would you approach negotiating for things other than salary any differently? Let’s say you wanted to work from home more than what you currently are. And so maybe you need to go in and negotiate it with your boss, or maybe you want more vacation, maybe this is the year you want to go to Europe, and it’s going to take, you know, good four weeks, and the company only allows three weeks. Any other approach you might use that’s different than negotiating for salary when it’s something that’s non money related?
Yeah, I think both of those are good, and I think sometimes too, when companies have a fairly rigid or precise compensation structure, that they don’t have a lot of flexibility in compensation. But they might have a lot more flexibility in some of those other things, even just working hours. I know semi-early in my career, I was the first person in an organization of 800 people to be full time yet to ask to only work four days a week. And it was that my kids were young, and it was a huge benefit for me to be able to do that. And I still believe to this day I worked harder and was more efficient and more productive during that time period because I was able to get that benefit and have an extra day off with my kids. So those types of things can be even more meaningful to people, than both on the individual side and on the corporate side as well too, to be able to offer those types of things that don’t cost anyone any more money.
You know, I spent ten years working four days a week for a large corporation. And it was funny, I would go in every Saturday or Sunday because I wanted to land on Monday and prove everybody else that I didn’t miss a beat by not being there on Friday.
That’s exactly what I did, too. I was just crazy efficient. And that was back in the day where it was more difficult to work from home, when I did. I didn’t have email access from home or I didn’t have easy email access from home. I could log in, but I couldn’t get it on my phone. And I’m not even sure if I had a cell phone.
What was so great about that is I know I felt so loyal to that company that you could not have gotten me out of there for any amount of money, right? Because I had felt I had the flexibility on Fridays to be a mother or to be a Girl Scout leader, whatever it was that was really important to me during those 10 years.
Right, right. That’s funny. We had that same experience, only I was off on Mondays.
Oh, so we both had our three day weekends. Right?
Which was invaluable, priceless, right?
So Susan, what are some tips on negotiating?
You know, JoDee, what I think I would do is I would start with really tracking my accomplishments. You know, that’s an important thing for any employee to really throughout the year, make note of when you really have a major contribution, perhaps you what customers you brought in, perhaps it’s new processes that you changed? Are you some innovation you’ve done so that you have a good record of it?
And really, that’s a great idea, regardless of whether or not you’re going into specifically negotiate. But just to remind yourself, and to remind your boss or manager, what it is you’ve done this past year,
I agree. And then the second thing I think is thank you about, you know, what is the target salary that I believe that I should be at? I know we talked about going out to glassdoor.com, or salary.com, or payscale.com to find out what people are reporting that they’re earning a particular jobs. So do something real self assessment. Where should I do I think I should be salary wise is probably step two.
Right, good idea.
And then step three, I think you ought to practice I’d sit down with someone and for let them pretend to be the boss so that they can raise objections that you can actually have some practice responding to.
Right, practicing anything… we think of practicing presentation sometimes. But so many conversations I think could go better if we practice them ahead of time or even encouraging other people we work with or talk to, to think about practicing a conversation of any kind can be so incredibly helpful.
Oh, I agree. It’s like exercising a muscle. Right? The more you do it, the stronger it gets. And I want people to give me objections that I, you know, practice responding to. And then I think the final step really, is to really figure out the right timing and prepare your boss. You let them know in advance that you want to come talk to them about your salary. Perhaps that’s a good approach. Or even think about, are there better times to reach your boss than others where they’re more receptive to ideas and things? So if it’s like the beginning of the month, and you always have very busy, you know, beginning some months, perhaps wait till the middle of the month to have that conversation.
Right. Right. Susan, what do you think are the risks of negotiating salary maybe both for the employee and the company?
Yeah, you know, I think if you’re a brand new hire, and you’re not saying yes, yet to that job offer you want to be really thoughtful about how you negotiate because you don’t want to start off with a new company with them having a bad taste in their mouth, you know, maybe they’ve offered you X dollars and you say, I really need XX dollars. You don’t want them to think, do I really want this person on my team? So I think you have to be really thoughtful about how you do it. And I actually like to script people on how they approach it, but I think it’s different though, if you are an existing employee, and you feel like you need to negotiate because you’re not getting fairly compensated over time. I think that’s a different conversation.
Right. And both of those, again, go back to understanding the role and the market value or even especially, at either point, I think you can ask the company, where did they get their information? How did they determine what they felt the position was worth, and what were those qualifications and do you meet those or not? So if you’re not able to find a lot of information on your own, ask them. The larger the company, I think many of them have more structured pay scales and more data on how they have determined the pay. But for a lot of smaller companies, sometimes they haven’t maybe researched the role or it was just what the person who was before you made and, and the skill sets and experiences might be different, but I think it’s fine to ask that question of them in a non judgmental format.
Not threatening, right, right. It’s funny, I’ll have a lot of sales people say to me, “I think they expect me negotiate. Susan, I’m very happy with this. But should I ask for more?” And I do think that, here’s how I would approach it, if I was working with if I had an employer make an offer to me. I think what I would do is whatever offer they gave me I would act delighted. I would be delighted in that. I’m so pleased. I really think I can contribute to your team. I would love to join XYZ company, everyone I’ve met there, I feel like are people that I really would enjoy working with. But then I’d say there’s only one element of the offer that I’m struggling with a bit. And then I’d get real quiet. So I go from this delight, at the beginning of the call to this very somber moment. And I’d say, I will need a couple of days to kind of think this through, there’s only one element of the offer. I’m telling you nine times out of 10. They’ll say, what, what is it about that offer that you’re struggling with? And then you can say, if it’s vacation, maybe not enough vacation. If its benefit package starting, you know, 30 days from now, or if it’s salary, I’d say, salary wise, I really need to be $10,000 more than where I am here. But I know that you’ve gone through a lot of work and research to come up with this offer is something that I just need to work through. I’m telling you, sometimes the person who made that offer will say, listen, let me go back and talk to the hiring manager or let me go back and put some numbers together and let me get back to you. That’s perfect. Or sometimes they’ll say to you, well I’m sorry, we did a lot of analysis, internal equity here, we benchmarked it across the nation, we really believe this is a fair offer. So I’m sure that it is. And understand I I’m so excited to get the offer. This is the element I need to spend some time on. Sometimes they’ll call you in that 48 hours you’ve asked for, and they’ll say, listen, we are not going to lose you over $10,000. Or we can’t give you 10, we can give you five, and that’s what you win. Now, there’s going to be a percentage of times when they go the whole 48 hours and you call them back and you want that job, you’re able to say, listen, you know how delighted I am with the offer that you made me. I did spend a couple of days I looked at the number from every different direction, I can make it work. I’m telling you, if you use that approach, that employer is not going to have a bad taste in their mouth. Instead, you very well may have walked away with something more than you could have had.
Right. Well said. I think, too, from the corporate side. I have certainly, in roles as an HR director or even in consulting with our clients about salary negotiations, many people come back to me, from very inexperienced people, to very experienced people who asked those same questions. And sometimes I was able to negotiate and sometimes I wasn’t. And sometimes I felt that we had done our homework and knew the true value or understood our position. And I was able to explain that and it worked well, in all situations, sometimes where I wasn’t able to negotiate but still was able to hire the candidate. And sometimes we did negotiate and it made sense for us to do so. So it doesn’t hurt, if you have your homework and if you know what you’re asking for.
I agree and if you use the right tone, right? It can wear it could wear on you, if somebody comes in and they say, especially if you had that conversation about salary early in the interviewing process, and everything was copacetic, and then at the end the person that surprises you and say, “well, I really can’t work for X dollars. I do need 10,000 more.” That’s I think when it gets into the little dicey, right,
Right. Right. We recommend to our clients many times to to have that paid philosophy or have that understanding of where they are in the marketplace in terms of both compensation and benefits so that if they come back to the candidate or to a current employee and say, Don’t forget, this is what our benefit package right presents. This is our paid time off policy, which many times is much more difficult to compare to other companies and you can be firmer in the offer that was made.
I think that’s really fair. So JoDee, I continue to read a lot about the gender gap that women are earning, I think on the average about 80% of men across the country. Why do you think that is and any suggestions that you might have either for women listening or even some of our employers that are trying hard to, you know, dispel that trend?
Yes. So I always feel as I’m a little bit naive on that topic, I’m certain there are companies out there who may just not pay as much. But I’ve also seen many companies too, where the women have taken time off, who have less experience in roles where they’re trying to make that comparison between a man and a woman where all factors are not the same. I’m certainly not justifying, or expecting that women should make less. But I think it again, it goes back to what we said earlier about understanding the differences. Sometimes we have to ask the questions about what the factors are in terms of the qualifications and the experience. Having said that it is also very well known and documented in many books that women are not as good at negotiating salaries from the beginning. And just as you mentioned earlier, that can be the key time to ask for that negotiation. And women seem to not have that confidence to ask as many questions as men do.
You know what, I think you’re right. And I thank goodness for the Equal Pay Act. I think that you know, especially in jobs that are very uniform or consistent, it’s very easy to make sure that women and men are paid on balance where it gets more difficult, I believe, as they continue to rise up in the ranks and more professional level… I read a study recently, they talked about that the more income that a woman makes, the more choices she has, and so the options tend to expand. So we see it I guess, for even from our own personal experiences, we see professional women, you know want to when they start having children to opt into part time careers or take more flexible options and employ those, which tend not to pay as much as somebody who is, you know, rising through the ranks, as many men often do to the executive level. Certainly when you look at CEOs across the country, the women still are in the minority, right. But I do also think it has to do with negotiation, that the confidence level that you sometimes need to have to look your boss in the eye and say, I think that I’m worth more.
So what you know, JoDee, I am interested. So what do you do or what do you think about when an employee comes to you and you find out that they have been talking to other employees about salary? I mean, what do you what do you suggest your clients that they do? I know that sometimes they get kind of heated and worried that, why are their employees talking about salaries?
Right. Well, I’ve actually seen it in employee manuals where companies say that employees are not allowed to talk about salaries with each other. But that is not… there is no rule or law out there that says employees can’t talk about it. So you can’t actually do anything about it that is legal or fair.
In fact that the National Labor Relations Board has come out very strongly that it is a Protected Concerted Activity, that employees whether it’s unionized or not, an environment, has the absolute right to talk about working conditions, including their pay.
Right. So it will happen, it will happen. And employers I think, again, it’s one more reason to have your ducks in a row about your philosophies and pay structures, and pay scales and making sure, especially where gender gap is an issue that making sure you’re paying people fairly and appropriately for the same positions.
And I think you’re so right. I think that transparency that if an employee comes forward and says to you listen, I’m not making what my coworkers are making and I feel like I’m being mistreated, that you have done that homework and you really do have a pay philosophy and ask that individual now why do you feel that you that you should be earning with so and so’s earning? You know, where do you feel that you’re being undervalued? And then listen, right?
Right. Let them make their case and see what makes sense. We did get some mail this week, Susan.
Oh, really? Hey, great, who from?
We had an email from Frank in Greenwood, Indiana, who said “every time I hear from a recruiter about a role I’ve applied for, they immediately want to know what my salary expectations are. I’m afraid if I say too high, they will eliminate me. And if I say too low, that is what they will offer me. How should I answer that question?”
Frank, I think that is a really legitimate concern. I know from the years that I’ve worked on the recruiting side of it, we would get usually so many applicants for jobs, and we would pick up the phone and call people to screen them just, you know, see, do we have the right fit here, is he somebody that we want to invite in to actually meet with the hiring manager. And the fact is, if someone’s used to earning $100,000, and the job we have to offer is $35,000, we think that’s a good time to clear the air before everybody gets dressed up and comes in. However, when I’m on the other side of it, and I’m coaching clients who are trying to find a job, I always say you want to get in front of the hiring manager, you want them to fall in love with you before you start talking salary. Because usually the HR screener or someone who’s screening, they usually don’t have a lot of latitude or decision making responsibility, or abilities relate to up a job or to increase the wage. You need the hiring manager to get engaged. So you’ve got to get past round one, and that round one is that phone screen. So I always say the important thing to answer is something along the lines of “I really want to Work for XYZ company, I really think I can make a difference. I’m not so worried about salary, it’s more about this opportunity.” But in that same breath, say, “but may ask, what is the hiring range?” Now, at that point, the screener has asked you the salary question. So it’s not like you’re asking it out of the, you know, the dark. Usually they will come back, say, Well, our hiring range is, you know, 35 to 50,000, whatever. And then you yourself can say, you know, I don’t think we have a match, or you can say, you know, fine, I, let’s talk more about the opportunity. I would really love to get in front of some of your hiring managers.
Yeah. Great advice. I know, at Purple Ink, we highly recommend, which is not typical, I don’t think… and you mentioned earlier that most employers do not include the salary range in the initial posting. And we actually recommend that to all of our clients because we feel like so much time can be wasted if you have a $50,000 position and $100,000 candidates apply, if you have and you’ve done your homework and you know what their ranges that you’re going to pay to include that from the very beginning. I do appreciate that can be good advice, though for the for the candidate to maybe get their foot in the door too. But I think from a time perspective, the hiring can be such a long and expensive process, that by including that in the beginning, people can make that decision as to whether it makes sense for them to apply or not.
I do like that idea. Yeah, I think it’s pretty rare. But I think that’s I think that’s a very smart advice you give. The other thing I hear from clients is that when they fill out a job application, so often they have to put some type of a salary in there like what was your most recent salary? The good news is there is some legislation and a few states that is barring that because they have found it to be discriminatory to individuals. And so who knows, maybe over time, that’ll be a question of the past, you know what was your most recent salary. But what I always say to people is put in zero. If it will take the number zero, put it in, because they don’t allow you to skip it. And that way you can have that conversation when they call you at least right. Anything you can do to help yourself not get screened out before you’re ready is a positive,
Right. Don’t you have another email? Susan?
We did. Hey, this one is from Laura in Westfield. And what she said is, I’m getting ready to negotiate for a raise. Should I send an email to my boss with all the reasons why? Should I call him, or do you think I should meet with him in person? What do you think JoDee?
Well, I think having face to face conversations is always the best answer. That doesn’t always work either if you’re not in the same location or you work remotely, but anytime you can have a face to face conversation around that is most helpful for both parties, I think. I do like what you mentioned about being prepared and thinking of your accomplishments. If you can give your boss a heads up as to what some of those are, or maybe what the topic is, he could also be prepared coming into the meeting as well. So it wouldn’t hurt to give them a heads up. What do you think?
Yeah, I agree. And the fact is, if you’re really keeping track throughout the year of your accomplishments and the real value that you brought, I would definitely if not send it in advance, if he or she knows we’re going to be talking about salary, at least bring it with you. Because I really do want to have some facts there as to what I’ve done over the past year, or at least over the past, you know, period of time, so that they’re more inclined, I think, to realize that from the pay perspective, maybe I’m worth more.
Right. I had a client tell me once, several years ago, he said, “JoDee, how much do people want to make?” And his answer was “more.” Because we all want to make more than what we make, right? So we have to have some, we have to be prepared for that. We have to have some thought we have to have done our homework, we have to track those accomplishments. We can’t just go in and tell our boss that we want to make more because we think we’re doing a good job, right? That’s not being an effective negotiator when we’re not prepared and haven’t done our homework to bring to them.
I totally agree.
Susan, on a different note in the news recently, the standard mileage reimbursement rate actually has gone down for 2017. Tell us a little bit about that.
You know, that isn’t that funny JoDee? It seems like all my life, the mileage expense was always going up and up and up. And it’s so surprises me that, you know, over the last 16 years, this is the fifth time that the reimbursable mileage rate has gone down. So it It just seems like a whole different trend at this point of history, doesn’t it?
And just to be specific, it was at 54 cents and 2016 and has dropped to 53 and a half cents, starting January 1, 2017. So we recommend to listeners that you update your expense reimbursement forms and procedures to account for that.
Don’t forget to communicate it to your staff. So there’s no bad ill will when they submit their mileage for reimbursement, right?
Right. And pretty much good news for all of us, though, on that when even though the reimbursement has dropped, that means a lower gas prices for all of us, and that’s how the IRS determines that number is by researching what the gas costs has been.
That makes great sense. And don’t forget that you can still reimburse for tolls and parking and all those types of things, but just the mileage rate is one, to pay attention to it. You know, there are A couple of other mileage reimbursement rates out there that I don’t often think about, but you know, charity, if you’re out doing charity work, you get reimbursed at 14 cents a mile. And medical use is actually moving down though from 19 cents a mile to 17 cents a mile. And that’s true for moving expenses too. So if you happen to do that, relocate employees, moving expenses have gone down from 19 to 17 cents a mile.
Very good. Thank you for sharing that. And to our listeners, thank you for listening today. If you have questions or feedback for us, follow us on Twitter @joypowered. Please tune in next month, as we talk about launching a job search.
Great. Thanks JoDee.