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Compensation Strategies

Compensation Strategies. Dave Sparkman Adapted from: What Color is your Parachute?. How much do you/should you know?. Unemployment rate is _____? The U.S. economy produced more/fewer jobs last month? Are wages rising or falling? Demand for skilled workers is strong/weak?

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Compensation Strategies

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  1. Compensation Strategies Dave Sparkman Adapted from: What Color is your Parachute?

  2. How much do you/should you know? • Unemployment rate is _____? • The U.S. economy produced more/fewer jobs last month? • Are wages rising or falling? • Demand for skilled workers is strong/weak? • Professions in demand? • Cost to hire an exempt employee is ____? • I know EXACTLY what I want to make and that my market value corresponds to that number?

  3. So….why the quiz? • Do you know the jungle you’re hunting in? • If you don’t know what you’re looking for, you’re sure to find it • You should be gleaning information along the way to contribute to your eventual salary negotiation • EVERYTHING is a negotiation….are you ready to play?

  4. Overview • Those pesky questions • Who should go first? • The purpose of salary negotiation • Homework on what you need • Research on the market for your skills • Define ranges – for the employer and yourself • Know how to bring it to a close

  5. #1 – Those pesky questions… What is your compensation expectation? What is the salary range you’re looking for? Why? Because recruiters are paid to find out • It involves time • “Screening” process standard • The alternative is not to move forward

  6. #2 - Never discuss Salary until… The end of the interviewing process, when they have definitely said they want you • Hold off on the inevitable questions • Possible responses: • Discussion of salary is premature • I’ll get to that, but could you help me understand the job? • Here’s the range… • But…what if my compensation history is erratic? Shouldn’t I get it on the table?

  7. Conditions of the process…not until • They’ve gotten to see you at your best • You’ve gotten to know them – firm vs. flexible • You’ve found out what the job entails • They’ve found out how well you fit job requirements • You’re in the final interview at that place, for that job • You’ve decided…”I really want to work here” • They’ve said…”We want you” • They’ve said…”We’ve got to have you”

  8. #3 - The Purpose of the process… Is to uncover the most that an employer is willing to pay to get you • The employer wants the opposite • That creates a “negotiation” • That’s why there’s a range…. • Experience • Like-ability • Level of desperation • Leverage and Relationship

  9. #4 - Homework – what do you need? Just what do you spend money on…. • Housing • Food • Clothing • Automobile • Insurance • Medical expenses • Charity • Taxes • Savings • Child care • Entertainment

  10. #5 - Typical salaries for your field Let’s discuss what this process is worth… People • Talk directly to the employer (fast food) • Talk to a competitor (construction) • Call some help wanted ads • Explore project work • NETWORK Internet

  11. Internet research • Bls.gov/oco/ • Dol.gov • jobstar.org • salary.com • interbiznet.com • salarysource.com ($) • Christiancareerjourney.com

  12. #6 - Define a range for employer and yourself First, the Employer: • Employer uses market data to create range • Could merely be internal equity over time • May be straight forward – this is how much… THEN, you as a Candidate: • Not necessarily sure “why”: • Last compensation is good place to start, but… • “Your costs” is not a good reason • Create the “hook” just below the employer top of range

  13. Five numbers you need to know… • W-2’s don’t lie • Bottom line – have to hit this number • Dream – over the top • Comfortable, but not happy • Market = Reality

  14. #7 – How to bring a salary negotiation to a close Don’t just leave it “hanging” REMEMBER - - leverage and relationship • Ask when they would like a response • Perhaps go back, so you can ask some final questions • Take a little bit of time • We need to know “right now” • Regardless – be enthusiastic!! You’re not done yet… • You should always go back

  15. #7 – How to bring a salary negotiation to a close (cont) • What other forms of compensation are there? • Fringe Benefits – “Fringe” = 15-28% • Health benefits - Secretarial support • Vacation - Title • Training or education dollars - Office space • Parking - Pay grade • Future raises – don’t forget this one! • Severance provisions • End things on a graceful note • Get it in writing • Get a start date…and GET MOVING!

  16. Asking for a raise? • Why are you asking? • Financial pressures • Competitive offer • Knowledge of colleague’s pay • How well are you performing? • Timing is everything • What is your leverage and your relationship? • How should you ask?

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