Compensation can be a touchy subject for all parties involved during the recruitment process. To some folks, it can be the most nerve wrecking part of the hiring process. If you are a candidate, you are concerned that what you request may be too low and under value you own experience or its too high an may take you out of consideration. You are probably also afraid of getting low balled by some recruiters. If you are a recruiter, you probably are afraid that your perfect candidate is going to be out of your pay range and than its back to square one. Or worst they try to re negotiated every step of the way. From my experiences the best approach is the simplest approach. Just be straight forward and transparent.
For HR departments – Compensation needs to be simplified and consistent across your operating company. It is probably best to hire a third party firm to perform a compensation analysis on your job titles, salary bands, levels, years of experience, geographical market, and existing workforce. If you set titles, requirements, and salary bands, this will help make the candidate experience pleasant for job seekers, remember this part of the process will impact your number of hires and reputation in the market place.
For Job Seekers – Before you hop in the job market you need to have an understanding of your own experience and what compensations comes with that. More often than not, candidates overprice themselves, because they “know someone” in the same field making twice as much as they are or because their stock options are so much greater. Thats bad practice and probably won’t really help you get a job. Think of it this way, if you are a passive job seeker (not looking to leave your current job) and a recruiter is trying to convince you to leave your current role with a competitive offer for a lateral position, you can expect a salary increase to be 10 to 15% more than what you are making now. If it is a promotion you can expect that to be 15 to 20%. Now on the flip side if you are successful and showered with hundreds of RSUs and ridiculous bonuses chances are you aren’t leaving your position for compensation, so you need to put a value on what you bring and be ready to walk away from some of that extra stuff. You need to really figure out why you are looking for a change, unless of course finding a new job is mandatory. If its about the work and advancement than you have to find a number that you are comfortable with. My advice is to look at your total compensation and compare it to the package that you are being offered. Be sure to look at all of your “guaranteed” money and not money tied to stock or company performance. If you have an offer from a competitor, let your recruiter know, chances are they will try to beat that offer. This will only help you.
For Recruiters – This is where we give ourselves a bad name and come off very shady or as they say on social media “shady af.” We really need to stop playing the compensation game and get it together. I am going to break this down to speak to a couple different audiences in our community.
Agency Recruiters – Figure out how you are going to get paid from filling this requirement. Are you going to be working on a mark-up or a bill rate? Make sure you look at your cost associate with filling the position (your burden). Do a compensation analysis on the req to understand what candidates should be making in your market at the right level of experience. Find a range that you and your client are comfortable with and then go recruit. If your range is $50-$70 per hour, have an identified a qualified candidate, ask them what their compensation expectation is NOT what they are making currently. If the candidate is out of your range, explain that to them and let them know. Explain why they don’t fit based on salary, however, let the candidate pull themselves out of the running or decided if your opportunity is worth the decrease in pay. Remember, you don’t know their situation, but if they are willing to move forward, proceed with caution. You should be talking them out of the job every step of the way. Make sure they want it and will accept an offer or you will be faced with an unhappy client.
Corporate Recruiter – Understand your salary band and requirements for the position you are working. Let the candidate know upfront what your range is and what the total compensation looks like. Don’t wait until an offer comes before you discuss compensation with candidates. Make sure you have given the candidate a fair and complete look into what the salary structure is for the position you are recruiting them for including any bonus, stock options, long term incentives, and/or medical benefits. Let your candidates make an educated decisions, they will love you for it in the end and probably have a future referral for you.
Compensation conversations are not so bad. They really are not as difficult to discuss if you are using a clean and ethical approach. Don’t be like a used car salesman (no shade there, I use to be one), just be a good and honest recruiter.