About Compensation

As I mentioned in an earlier post, compensation should be tied to the level of work an individual is doing for a company. What value does the company gain from that function? How does that role or that person's skills affect the bottom line? What is the street value for that person's abilities? How much would it cost to replace the person?

Compensation shouldn't be a number picked out of the clouds. If companies are smart, they are considering all of the above when preparing to make an offer to a candidate. It isn't uncommon for companies to set a range at the beginning of the hiring process that they'd like to stay within. Budgets matter. The range doesn't have to be set in stone, however. If you are a candidate who finds himself at the top of that range, or even above it, you aren't necessarily out of luck. You simply have the challenge of illustrating how your specific skills and abilities will have a greater return for the company than those of less expensive candidates. If your experience makes you better able to gain/retain/recapture business, you can positively affect that company's bottom line. If your capabilities are broader, perhaps you can take on more functions. Perhaps you have a knack for streamlining processes, negotiating more favorable business contracts and identifying wasteful spending within an organization. Highlighting all of the ways spending more money on hiring you will net them more money in the long run definitely perks the ears of decision makers who are smart enough to think big picture.

I can't stress enough the importance of keeping any discussions on compensation focused on your abilities and the financial impact you can have on the bottom line. It should never be about your bills and the financial obligations you have to meet. Yes, it may be about that in your head, but it can't be about that between you and an potential employer. "I need to make X amount because of my mortgage and car note" is your business only. You wouldn't expect a company to pay you less if you had fewer financial obligations, right? Can you imagine? "Since your house and car are paid off we're going to offer you $10,000 less." That would be insane. It's just as ridiculous for a candidate to justify their salary requirements with a detailed account of their debt. Keep it about the position. Keep it about the bottom line.