
Written By: Jillian Climie.
When it comes to supporting our clients through compensation negotiations, one question we frequently hear is: How much is too much to ask for? Or, What if I ask for too much? These concerns often end up preventing people from negotiating during new hires, promotions, or performance reviews.
If this is a concern you’ve had, read on for our guidance.
No Universal Answer. Unfortunately, there isn’t a single percentage or number that applies to every situation. It depends on several factors, including your:
Level.
Experience.
Performance and impact.
Role scope and responsibilities.
Location.
Time in role.
Industry.
Importance of your role to the business strategy.
It also depends on your starting point. For example, if you’re significantly underpaid, a 40% increase could be appropriate. If your pay is well-aligned with where it should be, a 4% increase could be warranted.
General Guidelines (With Caution). While compensation benchmarks vary, here are some very general trends at medium- to large- sized organizations with structured compensation systems:
Promotion salary increases: ~15%.
Annual salary increases: ~3-4%.
I want to caution that these benchmarks should not be relied on too heavily. They vary based on a company’s strategy and compensation philosophy, as well as the current economic environment. And as mentioned above, quite often an employee’s compensation is not perfectly positioned at the outset, so these numbers wouldn’t be appropriate regardless. Lastly, other elements of compensation can come into play, especially when it comes to promotions. For example, an increase in annual bonus structure could offset the salary increase you receive.
Women Often Undervalue Themselves. Research shows women tend to ask for and expect lower compensation than men. At The Thoughtful Co., we so often see women undervaluing their contributions. So, if you’re worried about asking for "too much," consider this: it’s far more likely you’re asking for too little. Push yourself to stretch your ask!
Use Market Data Wisely. Market data can provide helpful context but shouldn’t be your only rationale. Ultimately, your compensation should be based on the value you add to the organization and the impact that you have. Additionally, every company approaches compensation differently. Some prioritize bonuses over base salaries, some value sales roles over engineering, and job titles like "Vice President" can mean vastly different things between organizations.
That said, here are ways to access market data to provide you a gut check when deciding what to ask for:
Public Pay Ranges: With the influx of pay transparency laws, public pay ranges for comparable roles can now be found on LinkedIn and Indeed in some provinces and states (for example, British Columbia and California).
Industry-Specific Surveys: Industry groups and associations often run compensation surveys in their specific area, so they can be great to leverage. For example, Canadian Women in Venture Capital produces an annual compensation report which shares detail of bonus structures and carried interest.
Connections and Mentors: Talking to connections is one of the best ways to get current market data. Compensation is changing so quickly in the current environment, and even the best industry surveys get old quickly. If you have trusted connections or mentors in your industry, consider asking if they’re comfortable talking about their pay. The more we share compensation information, the better equipped we’ll all be!
The Thoughtful Co.: We’ve supported hundreds of women across North America negotiate their compensation, and maintain a robust market database to guide our clients. This is not just a database of salary figures, but includes everything from incentive structure to severance clauses. Find out more here. (Note: All individual data remains confidential.)
If you frame it well, any negotiation can be received positively. Check out our article here on how to do this, specifically highlighting your key strengths and the concrete impact you bring to the organization. Grounding in this can help you feel confident in the number put forward.
Need help with negotiating? Book an introductory call with us here to learn how we can support. On average, our clients achieve +25% increases in their compensation packages.
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