When people graduate from college or graduate programs, compensation is often managed to align with industry or functional expectations. Parity, right? That perception holds until you have your first conversations with peers in the workplace, and realize that not everyone has the same compensation, especially at the 12 to 18-month mark as people begin to explore new paths and options.
Compensation can be a deeply personal topic, one that is almost always filled with uncertainty and speculation. Forums like Blind and Glassdoor can provide some datapoints, but inconsistent opinions from anonymous sources, wide compensation ranges, and lack of verifiability of user-reported datapoints can lead to more questions than answers. This is particularly true in 2021, when the job market is overheated and compensation trends are fast-changing.
How do I find the right answer?
There are lots of different resources to benchmark pay in post-graduate roles. You can certainly benchmark from current salaries that are in employment reports from MBA programs. Warning: you may find out that you’re being paid less than new grads, given how hot the job market is. Translate that insight into a gentle point of negotiation!
Also, be transparent with your manager during compensation and performance reviews. The best managed organizations want to make people happy, and foster open communication about many issues that have the potential to be awkward, including compensation. If you think you are underpaid, prepare evidence showcasing how your value to the team exceeds initial expectations and/or the contributions of peers and your pay. We often help in these situations, serving as a sounding board before you raise the issue with your manager. How you approach the conversation can be critical. So is the information provided through your manager’s response.
What elements of compensation are most important?
Almost every cliché works when it comes to discussing compensation. This is particularly true when you’re trying to compare the compensation in one job with another.
When we guide clients on compensation benchmarks and negotiations, our discussions include:
Other tangible benefits (i.e. discounted mobile phone service, Friday office meals)
Skills you’re building
Relationships you’re building
Oftentimes, compensation discussions focus on the first two factors. However, skills & relationships that you’re building are even more valuable in your early career. As was found toward the end of the pandemic, employees are often willing to take less pay for the opportunity to work at home. In fact, we have counselled numerous clients towards taking roles that better fit with what they valued out of their careers, rather than monetary compensation alone. Doing so often leads to professional successes that drive compensation beyond what they would have achieved through focusing on compensation alone.
What elements of compensation are most misunderstood?
It’s almost always equity-related. Check out our advice on how to think about equity compensation.
Prepare alternatives to counter potential bad news…
As much as we like to think organizations always retain the best talent, they sometimes don’t. Teams can be political, and yes, there are bad managers out there. A top-3 MBA graduate was recently blindsided with a negative performance review only weeks after being reassured they were on-track for promotion. Equally damaging can be “breadcrumbing”, with managers offering just enough promises for you to stay, but with no intention of following through or developing you on-par with your peers. While bad news can be deeply disappointing (even traumatic for some), awareness of it can free you from a bad path. When we work with clients to prepare for compensation discussion, we’re also anticipating what bad news might be uncovered. In our experience, people almost always know what it will be. Still, instead of avoiding the discussion, it’s important to understand your true prospects. Early career, time is critical. You don’t want to waste a moment in a role where someone has decided that your growth has plateaued. In a strong job market, it’s better to find the right fit for your skills and ambitions.
In the meantime, always keep networking to keep your options open. See someone you know get a new role through LinkedIn? Reach out and schedule a quick update call. Attending a conference? Aim to meet 3-5 new people, and follow-up with each after a few months. Haven’t talked to a former boss in a while? Drop them a line! Every new opportunity starts with a simple conversation.
Navigating your career is challenging; particularly difficult is knowing all the possibilities open to you or the opportunity costs involved in the choices you make. ProValues can help streamline your focus by helping you identify what you are really looking for in your next role, based on how you have felt about prior roles. Also, reach out to us and other trust advisors as you start to actively explore. As one of my clients pointed out after he took a 50% pay cut coming out of his first post-MBA job to go into his second – there is only a certain amount of money that drives happiness in the short term. He’s focused on building equity AND on the network of advocates that he’s building in the new role, which will be game-changing in his career long-term.