The realities of an offer are important to consider when negotiating compensation. In an blog post from February this year, I discussed what a “good” job offer is in this competitive market. In short, a 5-10% bump in total compensation would be considered a strong offer. A link to that article is here.
In this post, I wanted to look at some realities of an offer and why a 5-10% increase is the market norm. The offer stage can be a highly emotional part of the search process. It’s important to remember that on both sides of the negotiation, this is a business decision. Money is important, and negotiating is part of the process, but remember these realities of an offer when approaching the negotiating table:
- Friends sort of lie – do not listen to friends or colleagues about their salary. Friends provide some of some of the most unreliable data available. First, people have egos and they tend to fudge the numbers. Second, even if your friend is completely honest about a huge job offer they got, one example does not represent the market as a whole.
- You aren’t underpaid – most job seekers I talk to feel they are underpaid. In reality, very few people are underpaid. If you are a top performer with good skills, you are much more likely to be on the upper end of the pay scale for your experience and skills. The economic law of supply and demand sets a pretty standard pay scale for a given skill, years of experience, credentials, etc.
- Titles don’t matter – don’t get hung up on titles. I was quoted in a Fortune magazine article the other day about this (link to Fortune article here). In short, titles aren’t universally defined. One firm’s Director is another’s Manager. The responsibilities of the job, how you will develop professionally, and what you are being paid is all that really matters.
- Evaluate money last – I always talk about job search motivations at length with a candidate – well before we look at an actual opportunity. Money is important, but it should almost never be a primary motivating factor when changing jobs. A reasonable offer that accomplishes many of the career goals and objectives you were seeking is a great job offer. Even if you receive a lateral offer, why would you not take a job that offered more responsibility, more growth, learning opportunities, etc.?