The Employment Edge #002 From Base to Benefits: Negotiating with Knowledge

Happy New Year! 🎉🎉🎉

Wishing all of our readers a 2024 filled with good health, the love of family and friends and continued success.

Let's kick off the year by looking at your numbers - this article is about breaking down your compensation and benefits so that you can negotiate your salary increase or job offers from a position of strength.

Ready? Let's go!

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A few years ago, a VP HR shared an experience of going to offer with a high-level candidate. The interview process went very well but it all fell apart because the candidate had forgotten to share details around their LTIP (long-term incentive plan). That was a difference of over 50K! And the company was simply blindsided but also not prepared to factor that extra cost into the offer.

The candidate wasted their time and the company's by not crunching their numbers ahead. Lesson: it's important you know your numbers before heading into interview.

Breaking Down Your Compensation and Benefits:

1. Base Salary: Traditionally I've recommended taking your base salary and asking for an increase of a conservative 10% - 15%. But that does not factor in all of the other aspects of your overall comp. If you currently earn $150K, asking for $165K - $170K could make sense. It no longer makes sense if your bonus drops from 20% to 15% or vacation goes from 5 weeks due to seniority to only 4 weeks, etc. You need to calculate all of those aspects which could then increase your base to 20%-25% or even more in some cases depending on the comp & ben mix of your new potential employer.
2. Bonus Structure: Delve into the complexity of your bonus—understand its calculation, performance metrics, and historical payouts. Do you currently have a 20% bonus but have been paid out 150% of that over the last 2 years? Conversely, is your bonus on paper 20% but you have yet to receive bonus over the last 2 years? Look at what's actually getting paid out. And don't forget to document when payout typically occurs. If you're looking at making a move in February but bonus is paid out in March, ask to start after payout or request your potential employer pays that amount in the form of signing bonus etc. You'll find most times they'll be more amenable to waiting.
3. LTIPs and STIPs: Calculate your long-term and short-term incentive plan(s), and payout timelines.
4. Stock Options: Factor in the value of stock options if part of your current package as well as vesting period.
5. Transportation Benefits: Calculate the worth of car or car allowances, gas cards, or any mileage reimbursements. While car allowances are a taxable benefit, it's still going to cost you if you have to buy a car to make it to ta job that doesn't offer a vehicle due to lack of travel.
6. Time Off: Consider vacation days, sick days, and other time-off benefits. If your company is closed for the week between Christmas and New Year's that's an additional week vacation. If you're accustomed to taking 3 weeks off at Christmas but your potential employer doesn't allow more than a week between Christmas and New Year's, your family travel plans over the holidays could be thwarted.
7. Benefits Plan: Examine health and wellness coverage, understanding employer contributions and your out-of-pocket expenses. Traditionally, dental plans are expensive especially under a family plan. If your company pays for that you may be out of pocket moving to another company that doesn't.
8. Work Arrangements: Assess remote work options or hybrid arrangements.
9. Professional Development: Check if your employer invests in your growth through courses, certifications, professional designation fees or other opportunities.Did we forget anything? 📣 If so, drop a comment!

Doing Your Homework for Fair Compensation: Before negotiations, access online salary guides and seek insights from industry peers outside your organization. This is especially crucial for new arrivals and individuals from traditionally marginalized or underrepresented groups. Black and brown professionals, members of traditionally marginalized and underrepresented groups, have historically been underpaid. Even with the talent shortage of 2021-2022 boosting compensation, many are still not where they should be when it comes to compensation.

May 2024 bring successful negotiations, rewarding opportunities, and fulfilling professional growth. Here's to navigating your path with confidence and purpose in a year filled with new possibility and opportunities!

It's time to focus on enhancing your leadership skills. Registration is now open for our upcoming cohort: https://lnkd.in/eC6ZJc6Z. Join our 8 week online program, typically paid for by your company.

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