Is That Huge Raise Really Worth It? Dan Hurley Didn't Think So

iStock | Alexandr Lebedko

You may have seen the internet explode recently when news broke that Dan Hurley, the head men’s basketball coach of the NCAA champion University of Connecticut (UCONN) Huskies, turned down a five-year $70 million ($14 million a year) head coaching position with the Los Angeles Lakers, arguably the crown jewel franchise of the NBA.

The general reaction has been illuminating, with many lay critics saying Hurley must be crazy to turn down that kind of money. To keep things in perspective, the Lakers’ offer represents a substantial raise. UCONN pays him $5.2 million a year, so he’s leaving roughly $9 million a year on the table – a figure that already puts him in the top 0.1% of income earners in the United States so it’s easy for us to shrug off Dan’s decision to stay in Hartford. What does it matter? He’s already rich! The fact remains that Dan turned down a significant pay raise and there are good reasons for it.

So, let’s bring the numbers down to something more relatable to those of us who earn more average salaries. Let’s say you make $75,000 a year and, like Dan Hurley, you are offered a 180% increase in base salary. That’s a total of $210,000! That’s a lot of creme-filled doughnuts. What reasons could possibly exist for anyone to say “no” to an extra $135,000? Let’s look at the factors to consider with the much bigger paycheck:

• Work-Life Balance: If someone gives you a $135,000 raise, accepting this kind of offer will be life-altering in more ways than money, most notably potentially cutting into your work-life balance. If you don’t want your company calling you during the middle of your daughter’s wedding demanding you get on a conference call, you may want to reconsider accepting the 180% pay increase.

• Work Culture: Money is, without question, great, but the work culture of your new employer will impact your life in many more ways than the money. The exasperated exclamation, "They don't pay me enough to deal with this kind of [fill in the blank]” has been uttered more than once in the workplace, but the reality is that work dread does not take cash, stock options, or equity. If your work culture is a breeding ground of toxic despair you will inevitably reach a point where you might accept pocket lint as payment if you can just get out. Without knowing the full story, it’s okay to wonder if Dan Hurley had concerns about the current work culture of the Los Angeles Lakers (without naming names of course).

• The Nature of Your Work: Some professions exist for one purpose – to make money. People who are the happiest with their careers and life, however, are people whose work has a purpose. Back to Dan Hurley. Working with college students, many of whom will not compete in organized sports after college, has a purpose beyond winning back-to-back NCAA titles. You are more than a coach. You are a mentor and a friend.  Coaching professional athletes has only one purpose – winning a championship to make the billionaire owner happy and keep the advertising and merchandising dollars flowing. Still great, but not the same.

• Your Co-Workers: Different work cultures and purposes mean different people. There are very different workplace environments, and they value different things. Do your values align enough with your coworkers to “keep up with the Joneses?” when end-of-year evaluations take place and you’re ranked and rated against them? The internal competition and backbiting resulting from higher salaries can be fierce.

• Relocation: The East Coast and the West Coast are practically different countries. Small towns are different than big cities. Hartford and Los Angeles are as different as Mars and Venus. Your pay raise will not go as far if you’re relocating to a more expensive area or city, whereas your standard of living may be higher in the market which requires you to earn less money to sustain it. Relocating also means leaving family and friends and, if applicable, uprooting your children and making them start over in a new place and school. You may move from a low-traffic area to one where you’re going to spend two hours in your car every day so you can afford to buy a house.

These are some factors you may want to consider when weighing the totality of a mind-blowing job offer. That isn’t to say that Goldilocks scenarios don’t exist, and you can end up with a dream life and salary, which is definitely possible. It’s just important to remember that money isn’t everything – and Dan Hurley proves it.

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Philip Roufail contributed to this article.

Scott Singer is the President and Founder of Insider Career Strategies Resume Writing & Career Coaching, a firm dedicated to guiding job seekers and companies through the job search and hiring process. Insider Career Strategies provides resume writing, LinkedIn profile development, career coaching services, and outplacement services. You can email Scott Singer at scott.singer@insidercs.com, or via the website, www.insidercs.com.

Can I Negotiate A Raise In A Bad Economy?

iStockphoto.com | PrathanChorruangsak

During an economic downturn, business still goes on. Sure, the purse strings may be pulled in tighter, but employers that remain in operation continue to deliver products and services.

And if you’ve survived layoffs and are still employed, chances are that your workload has increased as you take on new and additional duties in addition to your prior tasks.

If you’re feeling underpaid or undervalued, is it an unthinkable crime to ask for a more money? Not necessarily.

When the economy goes south, workers believe compensation increases are out the window, and in many cases that is true; but even if there are furloughs, layoffs, or a catastrophic corporate restructuring, in some circumstances a salary increase may be both possible and justified.

But a serious word of warning – if you do decide to ask for an increase outside the normal compensation cycle (i.e., end of year performance appraisals), you need to proceed with extreme caution. Asking a company to part with its money during a recession or any hard times comes with inherent risk. Here are eight factors to consider:

Factor 1 – Know The Risk. Asking for a raise at any time is gutsy; asking for a raise during a downturn might come across as insensitive (at least) to the current economic situation. If you don’t play your cards right, it could backfire. Not only might your request be refused, but there could be long term consequences in terms of your perceived value to the company or in terms of being viewed as a malcontent.

Factor 2 – Read The Tea Leaves. Perform an objective assessment of the economic landscape and your company’s position in it. If your company is having serious business challenges, use discretion in your approach. For example, if the company is undergoing salary freezes, payroll cuts, or furloughs, it may not be the best time to ask for more. However, if those same changes force you into a position where you are working much longer hours to keep the company afloat, the company may be amenable to your message. Consider the subtle nuances of your situation.

Factor 3 – Know Your Market Value. Do a compensation assessment; this should include current market salary research for your specific position, field, region, and experience level. If your compensation package is at or above market, a request for an increase is not going to be well received. If you’re below, you may have a case. Use validated sources like PayScale that provide an accurate reflection of actual market trends. Prepare to share this data with your boss as part of your pitch.

Factor 4 – Consider Your Benefits Package In Your Request. Remember, your compensation is much more than the raw base salary figure, your total compensation package includes additional benefits such as insurance, bonuses, profit sharing, and other perks. Delve into the fine print and make sure you understand how you stack up. Your $80,000 a year may already be better than the $100,000 market average if your total package includes lots of extra goodies, such as a health insurance plan that is 100% company-paid.

Factor 5 – Be Honest About Your Value To The Company In The Moment. If you’re a top performer whose expertise has been historically beneficial to your employer, you may have a bit more room to negotiate, even during challenging times. However, if your business is in cost-cutting mode, one day your role is essential and the next day it might not be viewed as such.. Think about how the change in situation impacts your immediate value and be prepared to defend your assertions that you’re essential.

Factor 6 – Timing, Timing, Timing! If you are absorbing the work of departing employees, or your duties have rapidly changed, you are in a more advantageous position to ask for an increase. If it seems you’re attempting to take advantage of a bad situation, your request will be denied and you may put yourself on shaky ground.

Factor 7 – Take A Collaborative Tone In Negotiations. Have an evidence-based conversation with your supervisor and/or human resources, and arrive armed with a well-researched pile of metrics that demonstrate market value and that show how the company will come out ahead by investing in you. Don’t threaten to quit (explicitly or implicitly) if you don’t get a raise – you could be an easy mark for the next of layoffs.

Factor 8 – Keep It Confidential. It’s common sense not to talk about delicate contract negotiations with your co-workers. If your employer ends up giving you an increase, and your coworkers hear that you received a raise, there’s a chance that they’ll ask for the same and put both your boss and you in a very uncomfortable position, while breaking trust. Don’t breathe a word.

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Philip Roufail contributed to this article.

Scott Singer is the President and Founder of Insider Career Strategies Resume Writing & Career Coaching, a firm dedicated to guiding job seekers and companies through the job search and hiring process. Insider Career Strategies provides resume writing, LinkedIn profile development, career coaching services, and outplacement services. You can email Scott Singer at scott.singer@insidercs.com, or via the website, www.insidercs.com.

The Joy of Salary Negotiation

After you've sent a resume to a company, somebody in human resources will call you up to screen you for fit. Inevitably, they will ask you what you will be looking for in terms of salary.

This is where it gets tricky. It's kind of like a game of chicken – salary discussions, especially at the beginning of the process, are especially difficult because the first one to give away their position loses their leverage to negotiate.

Your goal here is not necessarily aligned to the company's goal in terms of compensation. Assuming the position is a good match for both parties, here's where your interests diverge.

Your goal as a job seeker is to get the best salary offer you can.

The company's goal is to get the best candidate into the position in the most cost-effective manner possible.

In other words - you want to get a boatload of cash; the company would rather you work there for free. The actual figure you agree upon is the reality.

Before we get into negotiation strategy, let's discuss a few facts about how corporate salaries are determined (by the way, this is a heavy simplification of the compensation process, so I'm sure that some compensation professionals out will have some information to add):

1. Companies - especially larger ones - usually have salary bands in which employees need to fit. For a particular position, there is an assigned salary range. For example, the company may have determined that they are able to pay between $15 and $20 per hour for an administrative assistant. The reason for this is that they don't want to have too much of a salary discrepancy between individuals doing the same type of job, but they want to have some wiggle room for folks with more experience.
2. Salaries are usually driven by market data. A company will subscribe (and often provide information) to compensation studies telling them what the market will pay for a particular job. The data take into consideration several factors - the skill set involved, competitive nature of the market, geography, what competitors are willing to pay and other information.
3. A company decides upon a compensation philosophy. This goes back to the market data described above. After looking at the data, company executives make a decision about their compensation philosophy as to how it relates to their compensation. A company looking to aggressively hire high-performing talent or that competes in a fast-changing market like technology tends to extend offers at the higher end of the range. Other companies may look to hire at the general market salaries, tending toward the average.
4. Companies often have less flexibility on salaries for recent graduates and entry-level hires. This applies to your newly minted MBA just as much as it does to your nephew who recently received their bachelor's degree. Companies will often have a concrete salary structure for these recent grads, with adjustments up and down for work location and the ranking for the school from which they graduated.
5. There's a lot more to consider in the offer than just salary - benefits matter. A lot. Companies often pay a great deal of money to provide a competitive benefits package. You know that health insurance the company's offering? Not every employer subsidizes the same amount to cover that, often leaving you - the employee - to pay a larger share of your premiums or co-pays.  There are other benefits, too - dental insurance, life insurance, disability insurance, tuition reimbursement, vacation time, holidays, company car, 401(k) matches and so on - into which companies can often pay dearly. A richer benefits package leaving more money in your pocket may give an employer a viable incentive to offer a lower base salary while still helping an employee make ends meet.
6. Variable compensation matters too. By this, I mean bonuses, profit sharing and long-term incentives. Not every job offers an incentive, which rewards the employee if they or the company has a good year. A bonus is real money, and a company's philosophy may be to offer a lower base salary in exchange for a desirable bonus target.

Here are some considerations when negotiating salary:

• It's to your advantage to avoid giving a specific expected salary figure until it's essential.  It's not always possible to hold off - a recruiter may really push for a specific number to ensure that you fit their structures - but try. It's ideal to see if it's a good marriage before locking yourself down to a specific number - this way, you keep your leverage.
• Sometimes ignorance can work in your favor. This isn't always true, but in certain cases it can be. If you're a recent graduate and an employer is asking you what you are looking for in terms of salary, it's okay to say, "I don't have a specific figure in mind, I am looking for a compensation package that is in line for a recent graduate with an MBA from my university." A similar approach also works well if you know you've been underpaid against the market, saying something like, "I'm looking for a salary that is in line with my experience and education."
• The employer may really push to find out your salary expectations. In which case, you may wish to consider taking a slightly different approach with your answer - "In my current position I have been earning $x, I am looking for a salary that will take into consideration the accomplishments and experiences I gained in my present role." You're not telling the employer you are asking for a specific figure - you're giving an idea of where you've been.
• Sometimes it doesn't matter what you want. See #4 above - the company may pay EVERYBODY the same for a certain job. You have the choice of taking or leaving the offer.
• Ask about the benefits. A rich benefits package has real cash value. Consider what you're being offered as part of the perqs as part of the total compensation.
• A sign-on bonus may make up the difference. There are times when a company really wants to get you on board, but their salary bands (or some other reason) may prevent them from offering a higher salary. Or maybe you are walking away from a bonus at your current job. A sign-on bonus might help close the gap during that first year.
• Be sincere in your negotiations. Assuming this is true - tell the corporate recruiter that you really want to make this work and that company x is clearly your first choice. Perhaps you are willing to meet somewhere in the middle of what was offered and what you asked for - tell them. The more you can make the recruiter feel that this is a partnership designed to meet a common goal, the better.
• The choice is ultimately yours. You don't have to accept the job at the salary offered just because the company offers you the position. If you've negotiated in good faith, then you should be able to walk away from an offer with no hard feelings. Which leads me to one last point...
• Avoid getting into the negotiations for counter-offers with your current employer.  It's not recommended - find out why here.

Scott Singer is the President and Founder of Insider Career Strategies Resume Writing & Career Coaching, a firm dedicated to guiding job seekers and companies through the job search and hiring process. He is a Human Resources professional and staffing expert with almost two decades of in-house corporate HR and staffing firm experience, and is a Certified Professional Resume Writer (CPRW) and Certified Professional Career Coach (CPCC).

Insider Career Strategies provides resume writing, LinkedIn profile development, and career coaching services, including a free resume review. You can email Scott Singer at scott.singer@insidercs.com, or via the website, www.insidercs.com.