The Black Box of Compensation Negotiation

Written by: Jillian Climie

Compensation negotiation is such a fascinating, and often mysterious, process. Some people just seem to get it. They know what to ask for, how to position their requests, and when to push back. Others, equally capable and deserving, feel completely in the dark.

Throughout my career working in-house on compensation teams and now supporting women in negotiating, I’ve seen these knowledge gaps play out time and time again. They often seem to follow lines of gender and socioeconomic status, which only deepens existing wealth and equity gaps.

Why We Fear Negotiations

Many people are scared of negotiating, but I’ve realized that fear often (unknowingly) stems from a lack of information. Some people are taught the ins and outs of negotiation, and others are not.

For example, were you taught that you can negotiate a sign-on bonus to offset any compensation you’re leaving behind when moving to a new company? Or that you can negotiate yourself into a multi-year performance stock unit (PSU) award when joining at an executive level by looking up the management information circular in advance? These insider insights can put thousands of dollars more in your pocket.

And even at a more foundational level: do you know how to frame your ask? What to do if you hear “no”? When we try to navigate something without any guidance, it’s always going to feel intimidating. Negotiation is no different.

Leveling the Playing Field

To create more equity in negotiation outcomes, we need to make information around compensation structures, policies, and negotiation strategies more accessible. Everyone deserves to negotiate from a level playing field.

New pay transparency laws in places like British Columbia and California are helping, requiring posted salary ranges for new job postings. But employers can go further by educating employees, especially about their incentive structures (from bonuses and equity compensation to employee share purchase plans). When people understand their full compensation packages, they can negotiate more effectively and are more likely to stay at the organization, knowing the true value of what they’re earning. At The Thoughtful Co., we’ve been brought in by some companies to proactively equip their women employees to negotiate with confidence. It’s been so encouraging to see!

Upskill Yourself

As individuals, we can (and should) build our knowledge around compensation and negotiation because the payoff can be significant. We often focus on reducing expenses when thinking about our finances, but increasing income can have a larger impact on long-term wealth.

Even small salary increases compound over time. Learning how to negotiate isn’t just an investment in yourself, it’s an investment in your future family, colleagues, and community. Once you know how to do it, you’ll naturally pass that knowledge along. It’s an underrated skill set that delivers lasting impact.

Where to Start

Here are a few trusted resources to help you begin demystifying the black box of compensation negotiation:

1. The Power to Ask. Written by myself and my co-founder Sophie, experts in compensation negotiation, this book equips you with the tools to get paid what you deserve. From deep dives into stock options to practical negotiation frameworks and real-world examples, it ensures you’re not leaving money on the table.

2. EquiPay. A first-of-its-kind compensation market data platform designed for individuals. EquiPay provides comprehensive market evaluations across genders including bonuses, equity, severance, parental leave, and more. It helps you negotiate with confidence, backed by concrete data.

3. Industry Networks & Professional Associations. Connect with others in your field! If you’re entering Sales, attend industry events and talk to peers about compensation structures they’ve seen. Many folks are happy to share their knowledge, especially when it’s around structure versus the specific amounts that they’re making. Also, many professional associations publish industry-specific compensation surveys which can be invaluable for understanding what to ask for.

4. Mentors & Colleagues. Leverage those who’ve been through it before. If you’re preparing for your first promotion conversation, reach out to a trusted colleague, mentor or friend who’s navigated that process. Learning from their experience can give you both strategy and confidence.

5. The Thoughtful Co. Coaching. At The Thoughtful Co., we specialize in guiding women through the complexities of compensation and contract negotiation. Our team, led by the former lead of Executive Compensation at Lululemon, provides the expertise and support you need to confidently advocate for what you deserve.

A note of caution: While online tools like Glassdoor, Indeed, ChatGBT and other LLMs can sometimes be useful starting points, their data is often incomplete, unreliable, aggregated and biased. Similarly, be wary of social media influencers offering compensation advice - always check whether they have actual experience in compensation or recruiting!

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Negotiation doesn’t have to be a black box. But to open it, we need to share information, build confidence, and approach compensation as something we can learn, not something we should fear.