I once was a partner in a computer consulting and services firm. We were looking for a network engineer, and interviewed one young man who had just gotten his CNE. His current job represented his entire network experience. He was a network admin for a local company, where he had put in exactly one network. Yet, when we asked for his salary expectations, he named a figure higher than either my partner or I were making. Shortly thereafter (surprise!), the interview ended.
Last week, we discussed how to figure out howmuch you are worth to your current employer, based on both the details in your paycheck and some educated guessing about overhead. This week, we build on this information as we look at how to price similar jobs in the marketplace and then use that information when negotiating for a new position. Next week, we’ll wrap up this topic by reviewing how to determine what price you should charge as an independent contractor. First, though, we need to do some research.
How do I compare to the marketplace?
Just what was the gentleman’s mistake? He did not know what the local marketplace had to offer for the position he was applying for. He thought he was worth mucho dinero, simply because of his paper CNE. Unfortunately, he is not alone. Many newly minted CNEs and MCSEs see the advertising hype (“make six figures your first year!”) and think it applies to them.
Of course, not knowing what your local market pays can slice the other way, too. I talked with one trainer who had 20 years of teaching experience, plus two degrees in teaching, plus an MCSE, as well as five years of experience doing technical training. This trainer made about $15,000 a year less than he should have made, based on comparable jobs in the marketplace. Because he didn’t research other positions and kept the “status quo,” he accepted what his employer chose to give him.
I’m not saying, however, that money is the only thing you should consider when looking for work. The commute, the working conditions, the mood and morale of the company—these are all important and should enter into the mix. What I am saying is simple: don’t shoot yourself in the foot compensation-wise because you haven’t studied your market.
How do you learn what the marketplace is paying?
Start with the salary surveys. There are a number of them on the Internet, such as the Salary Zone and the Salary Guide. Then, talk to people. Talk to other trainers, both in other companies and on their own; talk to training managers; and talk to training brokers. Remember, you are not asking them to hire you; you are simply looking for a range of salaries, or a range of gross revenue for an independent contractor. You can frame your questions very generally (“What do you pay your trainers?”) or you can get specific (“What would be the salary range for someone with five years of experience and both an MCT and an MCSD?”). Your goal is to find out the salary ranges of your position—on both a national and local level.
What’s the demand for your skill set?
But wait! You’re not done. You must conduct one more very important piece of research. Not only do you have to find out the compensation range for your particular skill set; you need to know the demand. So what if your skill set commonly commands a six-figure salary, if there are only two such positions in the entire state? “Supply and demand” isn’t just a tenth-grade test question; it is a real factor in the real world of jobs, salaries, and going out on your own.
Okay, so you’ve done your research. You know that there is a fairly strong demand for your skill set, and you’ve found a salary range that seems pretty consistent across all your sources. Your current salary is on the low end of that range, and you’ve decided to test the waters. It’s time to put all this information to work.
What makes it worthwhile to change jobs?
Most people would answer, “A higher salary, of course!” But you are smarter than that. Having worked through the “What am I currently worth in the marketplace?” exercise of last week, you are prepared to do some intelligent negotiating.
We had a highly desirable network engineer come in to interview, and the interview only confirmed what we already knew: this guy was good. Unfortunately for us, he knew it as well, and was a tough negotiator in the compensation round. His salary request was in line: it was toward the top end, but so was he. He didn’t stop there, though. He asked about our 401k matching, and our expense allowances, and our health benefits, and vacations and bonuses and equipment and cell phones and—well, you get the idea. We could match the salary, but not the other stuff. In the end, he went somewhere else for a lower base salary, but with many more add-ons and perks.
What’s the lesson for you? Write down everything you are getting from your current employer, including add-ons, perks, and support. Then, estimate each item’s annual value and arrange the list according to what matters most to you. Do you have to have a great health benefits program? Put it down. Got to have a hot box to work on? Put it down. Want your own car? Put it down. Then get ready to negotiate. Potential employers are often willing to reshape a compensation package if the total cost doesn’t go above that hidden upper end.
More issues to consider
- The law of supply and demand is one key to planning your career path. For example, I get almost daily e-mails from brokers looking for trainers certified in SQL 7. Why? Because it’s new and hot. Getting certified in SQL 6.5, at this time, is probably an exercise in futility. There is very little demand. By the same token, even though there is ongoing demand for Office training, there is also a huge supply of trainers, which drives the rates down.
- The marketplace shifts, continually and sometimes rapidly. You’ve got to keep up. Two or three years ago I actually made money providing Internet training. Now, everyone’s preschooler knows how to use the Web, send e-mail, etc. and that market is gone.
- Know what you need, know what you want, and know the difference. Make sure you have a personal budget before you job hunt or change careers. Sure, you’re making in the low 50’s now, but would you be willing to take less in return for less pressure or fewer hours?
- Know your affinity for risk. There is a whole new employment paradigm out there, and it goes like this: We’re going to pay you well below market and we’re going to work you to death, but in return you get stock options that could make you a gazillionaire if we ever have an IPO. If you are working for a private company that hasn’t gone public “yet,” don’t consider stock options as part of your compensation. Instead, think of them as a form of legalized gambling. If they hit, great! If they don’t, well, you still made enough to live on, and you’ve got a couple more years of experience on your resume. (You did make enough to live on, didn’t you?)
Join me next week, as I cover how you can price yourself as an independent contractor. Is a contractor making $70,000 a year better off than an employee making $55,000? Join us next week and find out!
If you are in a new position and would like to share your negotiation strategies (what worked or didn’t work), please post your comments at the bottom of this page or send us a note .
Bruce Maples is an author, trainer, and consultant living and working in Louisville, KY. His latest project is to offer himself in an IPO.