What Are You Worth? Executive Search Expert Shares Top Tip
Compensation negotiation is one of our most common coaching topics. The most common question our coaches receive on this topic is “How do I respond to ‘What are your compensation expectations?’” Candidates struggle with knowing their worth, especially if they are pivoting or haven’t made a move in several years.
For additional perspective on navigating what can be tricky terrain, we took the topic to Jamie Crittenberger (MBA ’00), global partner with executive search firm Odgers Berndtson, to discuss strategies for answering salary questions with confidence.
Should a candidate answer the salary question or try to deflect it? Most career coaches will tell a job seeker to never answer this question. As a recruiter, how do you respond to a candidate that is vague or doesn’t answer the question?
This is a great question and likely might elicit multiple, different responses from search advisers depending on the situation. I wish that it were clear cut! For starters, though, being vague or not answering on the topic of compensation is not in a job seeker’s best interest, in my view.
Obviously, a conversation about compensation is a critical and important component to any job seeker’s overall analysis of a specific opportunity, and there are several factors to consider with regard to managing these discussions. The first issue is to understand why the question is being asked. It is typical at the outset of many high-level searches for senior executive roles for the hiring company to task the consulting firm with compensation analysis of the targeted market. In this case, often in situations of newly created positions, the hiring entity and the search firm are working together with potential candidates to set the range for base salary, bonus targets, and any other elements of overall compensation. In other words, the search adviser is polling the market of attractive prospects to understand how to create an attractive compensation package.
A search consultant who is straightforward with these questions is trying to get key market data quickly to the benefit of all involved — setting the parameters and managing expectations for the hiring entity while determining a fair market value of the potential candidate pool. In other cases, a search consultant may have received a precise budget range for a specific role from a hiring entity without much flexibility on the upside, so the feedback from a potential candidate is important in terms of matching expectations from a job seeker with the reality of the defined budget. In still another case, a search consultant may have a few levers of compensation to pull on behalf of a client — base salary, target bonus, discretionary bonus, long-term incentive programs or some other form of equity, for instance. In this situation, the search consultant is trying to understand the ways in which a hiring entity might be able to customize a compensation package for a candidate’s unique needs. In all of these scenarios, it is best for a job seeker to be clear — there is very little downside to being so.
With so many changes in jurisdictional regulations regarding what questions a hiring entity can ask a potential candidate, the new standard among elite global search firms is to ask a candidate “What are your compensation expectations in the role?” Remember, it is now illegal in many locations for a hiring entity to ask directly about current compensation. It is my experience over the past few years that most candidates, when asked of their expectations, will simply answer with “Well, this is what I am making now.” This is usually the case when there is a relationship of trust between the search adviser and potential candidate. But, to be clear, it is standard these days for a candidate not to be required to provide specific details around current compensation. This environment certainly favors the job seeker. Having said that, it still is best to approach the conversation with candor.
In terms of the opportunity to advance a process and to get more quickly to perfect information, it is typically smart for a job seeker to indicate early on in the process what their compensation expectations are for the role, and to ask the search adviser directly if the budget for the role has been set. If the budget has been set, then the job seeker should ask precise questions about the mix of elements of the compensation package.
In my experience, both job seekers and hiring entities prefer candor and transparency regarding the issue of compensation for the types of high-level roles that I work on. It is far better to understand early in the process what an outcome might look like. Is this realistic for me? Does my expectation match what I’m being told by the hiring manager or search adviser? Secrecy or avoidance of this critical component to a job search does not benefit anyone.
In terms of strategies to inform a job seeker about how to answer certain questions, candidates should be proactive and ask a recruiter questions such as:
- “Why do you need this compensation information?”;
- “Has the budget been set for the role by the company?”; and
- “Is there flexibility around compensation structure?”
Any good search consultant will appreciate honesty as it leads to timelier outcomes. It seems to me that the strategy of not divulging compensation is outdated and serves no helpful purpose for advancing a process with full information. At some point the conversation about the financials will take place, so my advice is to address it sooner rather than later. Understanding the why and when a recruiter is asking compensation questions is the most important concept for a candidate to respect and understand.
Regardless of how a candidate handles the initial question, how does a candidate know what the market rate is for a role? How does a candidate avoid leaving significant money on the table, or pricing themselves out? How would you advise a friend or classmate who wanted your perspective?
There is this thing called the Internet! Seriously, with so much access to compensation surveys and data available these days, it is much easier for a candidate to know the market. Ask questions, use public resources, talk to colleagues, and, if possible, establish relationships with high-level search consultants with large global firms so that you can have frank and confidential questions about the compensation marketplace in your field and function before you are in a time-sensitive negotiation. Every single Darden graduate should maintain relationships with search advisers at several of the top worldwide leadership and search firms. Take ownership of this situation early and often in your career. If you know people who have inside knowledge, and you have access to them, then establish regular contact with them. Isn’t this part of the Darden networking expectation among its graduates?
Even with the access I have to global compensation trends, I still ask questions of leaders in the industries I serve to help me understand up-to-date trends. I literally will call or email friends who are CEOs and board members in my space every 3-4 months and ask them what the compensation ranges and structures are for key roles in the industry around the world. Things change rapidly so you need to stay current. It takes only a few minutes to check in with recruiters and industry leaders.
If a classmate of mine from my Darden class wanted my perspective, then I would tell them to reach out to 3-4 search leaders in their space at firms like Odgers Berndtson, Korn Ferry, Heidrick and Struggles, Egon Zehnder, Spencer Stuart, Russell Reynolds or the other Top 10 global firms and ask to have a ten minute conversation. It is in the best interest of a global search leader to know the candidate pool — taking a few minutes to speak to a senior-level Darden grad is a great use of time for a successful search consultant!
It surprises me that more senior level executives don’t understand how important it is to have a small set of search advisers in their network with whom they share insight. The best way to understand market rates for roles is to ask the people who operate in the space every single day. And there are lots of UVA and Darden graduates operating in the world of elite global search consulting.
On a separate note, how is the hiring market looking, in general, from your seat? Any trends you are seeing in 2019?
While I work typically in a niche market — sports, entertainment and media — that has seen massive growth in my 30 years in the business, in terms of both job opportunities and the use of elite search firms for key roles, I do have broad exposure to the worldwide job market through my current work with Odgers Berndtson and my previous work with Spencer Stuart. The last few years have been terrific for the elite global search firms in terms of gross revenue and profitability, across almost every sector and geography. Clearly, this is an indication of global job growth. Even with the advent of online and other digital job placement platforms, the major search firms continue to grow. It is smart for job seekers to follow the publicly traded global search firms as an indicator of growth or volatility. I was recently on a panel with six search consultants from mixed search firms and sectors from all over the world — North America, Europe, Asia and South America — and the reports were positive. There has been steady growth across sectors, functional roles and territories.
Jamie Crittenberger is a Partner in the Global Sports Practice and leads the firm’s U.S.-based professional sports initiatives. Prior to joining Odgers Berndtson, he co-led Spencer Stuart’s sports business practice in the U.S.
Jamie specializes in leadership advisory for league, team, brand, property, and media clients. After 20 years working with sports, entertainment, and hospitality organizations across the consumer sector, Jamie understands the demands of CEO and functional roles and connects diverse industry talent pools.
Prior to entering leadership advisory in 2014, Jamie was CEO of Starbridge Media Group, the firm he co-founded to leverage the convergence of sports and entertainment across multiple platforms. His television production work garnered five Emmy Awards.
Previously, Jamie worked in operational roles for the NFL’s Washington Redskins, including during the team’s Super Bowl XXVI championship season, as well as SFX Sports, Clear Channel Entertainment, and Viacom.
Jamie holds a BA from the University of Virginia (UVA), where he lived on the Academic Village Lawn. He earned his MBA from UVA and was selected by the school to deliver its commencement address. He has coached high school and youth football, basketball, baseball, lacrosse, and soccer.