Author Topic: Advice on negotiating salary for promotion  (Read 3801 times)

BuckeyeFinance

  • 5 O'Clock Shadow
  • *
  • Posts: 64
Advice on negotiating salary for promotion
« on: May 14, 2015, 04:51:29 PM »
I make 66k and am likely to receive a promotion in the near future. I happen to know that my predecessor made 140k base salary in the position I'd be getting. I have considerably less experience (5 years to her 30). It would be a supervisory position in finance with up to 10 direct reports.  I think I have a real shot at a large (potentially HUGE) raise but how do I maintain any type of leverage when they know what I make now?  How do I approach this negotiation?

I was thinking of starting the conversation by saying something along the lines of: "The average salary nationwide for this position is $120k. That seems like a good place to start this discussion." 

Thoughts?

Bicycle_B

  • Handlebar Stache
  • *****
  • Posts: 1818
  • Mustachian-ish in Live Music Capital of the World
Re: Advice on negotiating salary for promotion
« Reply #1 on: May 14, 2015, 05:43:35 PM »
Great question!

I'm no expert, just offering ideas on positioning statements/approaches:

1. "I'd like this position to be the basis for a long period of contribution to the company, so the compensation should be enough to protect both of us against inquiries by other employers." (can be used as a lead-in to your $120k figure)
2.  "I want the compensation for this to be low enough so the company knows it's getting value, but high enough to know I'm valued." (can be used just like 1, or as a separate statement later)
3. Perhaps you can talk to HR, a manager you trust, or a trusted veteran who is knowledgeable in order to find out what principles, if any, the company has for setting salary.  Sometimes if you ask, there are real answers to this question, and they could shape what you then conclude is a reasonable amount. (Side question:  Does your company have cost pressures where the $140k is more than they want to pay in the future?  Not intending to discourage, just have seen such situations.)

By the way, Stuart Diamond's "Getting More" is a modern classic on negotiating, if you have time to read it.  Could help in other situations too.  Anyway, best wishes (and let us know what happens...)


okits

  • Senior Mustachian
  • ********
  • Posts: 10138
  • Location: Canada
Re: Advice on negotiating salary for promotion
« Reply #2 on: May 14, 2015, 06:38:57 PM »
I like BarrettSun's suggestions.

One thing to keep in the back of your mind is that companies tend to screw existing employees on internal promotions in terms of pay.  They know what you make now so feel a 20% increase is huge, regardless of the market rate for that job.  Consider, if they won't come to the table with a competitive figure, that you'll do this new job for 6-12 months, then move to a new company to get a fair pay figure. 

BuckeyeFinance

  • 5 O'Clock Shadow
  • *
  • Posts: 64
Re: Advice on negotiating salary for promotion
« Reply #3 on: May 14, 2015, 06:49:35 PM »
Great post barrettsuns. I love your first suggestion. I'm definitely going to use that.

As far as the company goes, I think they pay very fair salaries but I see your point. If that did end up being the case, I'd do just as you suggested though I hope that doesn't happen.

beltim

  • Magnum Stache
  • ******
  • Posts: 2966
Re: Advice on negotiating salary for promotion
« Reply #4 on: May 14, 2015, 07:02:34 PM »
I'm replying mostly to follow along.  But I like your notion of using that average salary as a starting negotiating point, and Barrett's suggestions as lead-ins to bring up that figure.  My guess is you won't get that because you're so junior, but it's a good starting point.  Do you have percentile ranges for the position?  If, say, the 10th percentile salary for that position is 85k, that might be a minimum to settle for.

BuckeyeFinance

  • 5 O'Clock Shadow
  • *
  • Posts: 64
Re: Advice on negotiating salary for promotion
« Reply #5 on: May 14, 2015, 07:07:05 PM »
Different websites offer vastly different figures on average salary for the same job title so it's tough to get consistent figures. I'll definitely settle for less but would be way more likely to leave in the near future once I gain enough experience to get way more elsewhere.

RichWard

  • 5 O'Clock Shadow
  • *
  • Posts: 41
Re: Advice on negotiating salary for promotion
« Reply #6 on: May 14, 2015, 08:02:50 PM »
I have used "average salary" based on X website or X company to try and get a raise and it didn't work very well.

The reply (and valid): That company/report is sponsored by a recruiting agency, they have an incentive to inflate wages to inflate their referral fee. Additionally, their average is based on inputs that are also skewed because xyz.

In my opinion, the best way to get your market worth is to apply externally. If you think you can get a similar position for 20-100% higher salary, you'd be crazy not to apply for it.

The best leverage you can have is another job offer.

JLee

  • Walrus Stache
  • *******
  • Posts: 6047
Re: Advice on negotiating salary for promotion
« Reply #7 on: May 15, 2015, 11:16:24 AM »
I like BarrettSun's suggestions.

One thing to keep in the back of your mind is that companies tend to screw existing employees on internal promotions in terms of pay.  They know what you make now so feel a 20% increase is huge, regardless of the market rate for that job.  Consider, if they won't come to the table with a competitive figure, that you'll do this new job for 6-12 months, then move to a new company to get a fair pay figure.
This is so true. An outside hire on my team makes ~$68k to my ~$58k and we have the same job. I was promoted up from inside.

frugaliknowit

  • Handlebar Stache
  • *****
  • Posts: 1687
Re: Advice on negotiating salary for promotion
« Reply #8 on: May 15, 2015, 01:37:22 PM »
I would be very shocked if they gave you anything close to 120K or even 99K.  They might not even be negotiable.

I would try to negotiate on the basis of market rate for the position, but I doubt you have much leverage.  If that's the case, ride it out for a year or two, then screw them (move somewhere else for 120k)!

RexualChocolate

  • Stubble
  • **
  • Posts: 222
Re: Advice on negotiating salary for promotion
« Reply #9 on: May 15, 2015, 01:44:41 PM »
I'd be surprised if they offered you more than 80k as an internal hire.

Job titles are completely meaningless, don't try to use that as a metric.

Take the promotion and see what they say. No way they give you a 50% raise as an internal hire. Start interviewing; unless youre a superstar, the only way to get paid in finance is to jump. 66k for 5 years experience is underpaid.

BuckeyeFinance

  • 5 O'Clock Shadow
  • *
  • Posts: 64
Re: Advice on negotiating salary for promotion
« Reply #10 on: May 15, 2015, 04:02:05 PM »
Plan is basically to negotiate as much as possible but in the end accept any offer and jump ship in a year or two if they aren't willing to ante up. I'll update you guys when this all plays out (which may still be a couple weeks).