Any new senior management role, whether lateral in nature or on the more traditional "straight and narrow" route, brings with it a new opportunity to negotiate your salary and compensation. If you're already at senior management or C-Suite level then you've clearly demonstrated your superior negotiation skills. And yet for even the most experienced managers, the prospect of negotiating can still feel surprisingly uncomfortable, unnerving or even overwhelming.
So what's best practice if you are planning to handle negotiation of your executive contract yourself? In this blog post I highlight five key strategies to ensure you secure the best possible outcome.
Knowledge is power!
Whether joining a new business or moving within one, getting good advice can be invaluable. Good and proven recruiters (yes, they do exist!) will be able to tell you very quickly if a package is competitive and offer constructive advice. In some cases, particularly for board level appointments, there may be information in the public domain relating to competitors or peers that you can review or utilise.
Making comparisons internally can be more of a challenge, particularly when salary/package information is not widely shared and your peers are unlikely to be forthcoming about how much they get paid! Don’t be afraid to ask what the salary range is and what other individuals at your level are paid. Always ensure you fully understand how the package has been calculated and if you have a mentor or coach, seek their opinion.
Whilst an employer or prospective employer will have their figure or salary band/range, it’s important early on in the process to clearly define yours too - what's your "walk away" number for example? What's your higher or "optimistic" one and what's the number you'd be happy to settle for?
Take your time
Agreeing your compensation package is often a waiting game so be patient and accept that the process involves compromise and that it may need to go several rounds before mutual agreement is reached. Above all, don't be pressured into making a decision quickly. If you're feeling rushed, never be afraid to say so. There can and will be many legitimate reasons for a company needing a quick decision - time pressure relating to deadlines/projects, not losing other candidates if you do say no and so on.
That said, there should always be recognition of the fact that you will need time to digest information, speak to a partner or family/friends, and perhaps seek professional advice before making a final decision. Taking some time is important, but it's vital to ensure the amount of time you take is realistic and that everyone involved is aware. Accept that an employer may not be willing to wait forever and never go beyond an agreed deadline without communicating - it will always be taken as a bad sign!
Use your leverage
If you're at the "offer" stage then it stands to reason that you're at the top of your prospective company's list of candidates. So this is your chance to reiterate how your skills, experience and expertise can add value and help them achieve their objectives. Always remember that if you're not getting the result you're after you always have the option of walking away - but only do so if you're genuinely prepared to leave the opportunity behind.
Take a long term view
When you're negotiating your package, base salary is often just one part of the picture. You may find it helpful to identify and prioritise three or four benefits that are especially important to you, whether that's health insurance provision, holidays, pension plans, remote working opportunities, flexible hours, annual bonuses, professional development programmes or profit share incentives.
Try not to be dazzled by short-term perks and to maintain a sense of the bigger picture. In particular what's the potential and likely value, of your entire package over time? It may be about finding the ideal balance between salary and benefits, based on your own personal circumstances? Is a larger base salary more important? Or are you open to the slightly riskier but potentially more lucrative option of a lower base salary but with options for profit share or performance-based bonuses?
Keep your emotions in check
Negotiating an offer can be exciting, stressful and frustrating at times. While some candidates love the cut and thrust of a negotiation, others can find the whole activity uncomfortable or even overwhelming. The negotiation process has the potential to set the tone for your future relationship. So maintain a positive, confident and realistic attitude and think of it as an opportunity to demonstrate your ability to remain calm under pressure and your willingness to take on difficult conversations. Be patient, and probably most importantly of all, try not to take the process personally.
A contract negotiation is ultimately a business transaction in which both parties stand to gain. If it's carried out with sound knowledge, a sense of humility and good spirit, with a focus on a win-win outcome, then it can be a positive experience for all concerned.