How much are you worth?
by Cindy Waxer
The war for talent has reached extremes, illustrated by the perks dangled by organizations to lure IT talent in Silicon Valley, California, USA. Game maker Zynga offers its project team recruits video game lounges, massages and acupuncture. To remain competitive, the photo-sharing website Path relocated its offices so employees could enjoy panoramic views of San Francisco Bay.
But sometimes not even the best perks can match the allure of a substantial salary. In March, tech giant Google announced that it was paying computer science majors fresh out of college up to US$105,000 a year—a bump of US$20,000 from a just a few months before. And back in January, the company offered a 10 percent across-the-board pay raise to its staff of nearly 25,000 in an effort to hang on to its top talent.
As the global economy slowly recovers, organizations find themselves at risk of losing their best project professionals to competitors promising higher salaries and bigger bonuses. Bosses should be more open to negotiation—which means project managers are in a good position to make a pitch for a higher salary.
The median annual salary for project management practitioners
Source: PMI Project Management Salary Survey—Sixth Edition
Asking for a pay hike takes more than simply tossing out a high number and hoping for the best, though; it's a delicate balance of timing, tone, research and flexibility.
The good news is that the market is on your side: Three quarters of firms that imposed pay freezes during the last 18 months intended to lift them by the beginning of this year, according to Buck Consultants.
“It's an interesting market,” says Darren Lancaster, managing director for Europe, the Middle East and Africa at Hudson RPO, a recruiting management and talent acquisition outsourcing company in London, England. “The war for talent is heating up again, so people in project management roles are suddenly in more demand.”
THE FINE ART OF NEGOTIATION
Before you storm into your supervisor's office demanding a raise, though, remember that global unemployment has continued to creep upward, reaching 8.8 percent last year.
Here are five surefire ways to “get to yes” when negotiating a pay hike—without losing face.
1. Do your homework.
Even if you and your boss have a friendly relationship, when it comes time to negotiate a raise, you should be all business.
“Understand what the salary range is for this position and get comparative numbers. Anyone who just walks in and says, ‘I want more money,’ is going to get laughed at,” says David Barrett, program director at the Centre of Excellence in Project Management, Schulich School of Business Executive Learning Centre, York University, Toronto, Ontario, Canada.
Before you step foot into your boss's office, do your best to answer these questions:
- What is your monetary value to the organization?
- What are your coworkers earning?
- What salary might you expect from a competitor?
Project managers can start with the PMI Project Management Salary Survey—Sixth Edition. Released last year, the survey breaks down salaries by country, industry, gender, educational background, certification and other factors.
“Get information on what your employer has offered others,” says Mark Gordon, founder and partner of the business management consulting firm Vantage Partners in Boston, Massachusetts, USA. “Going in armed with some criteria of legitimacy makes you more powerful.”
How do you hunt down that material?
“In some cases, comp packages are public or fairly transparent,” he explains. “In others, it will be almost impossible to find out what others are getting paid. Even if it is inappropriate to get clear information from colleagues, you might look at job postings, at cost of living adjustments to your base compensation, at increases in your company's revenues and other benchmarks that could be persuasive.”
Taking a Cut
While a few regions of the world never felt the effects of the recession, others are still barely recovering. As a result, some project managers are being asked to accept a salary cut.
To be sure, getting paid less to perform the same tasks isn't an appealing proposition. There are, though, some circumstances under which a modest pay cut is justifiable:
We're all in this together. “During the recession we saw project management contractors having to take pay cuts of up to 20 percent,” says Darren Lancaster, Hudson RPO, London, England. “It could be seen as being fair, as it affected all workers and was without prejudice.”
A small step down the money ladder could mean a step up in skills. “If there's an opportunity to build up a portfolio of skills for a period in a certain industry, sometimes it is worth taking what some might see as a financially backwards step,” says Mark Sparrow, Singapore-based Asia Pacific head of professional and technical recruitment at the staffing firm Kelly Services.
You may gain in other ways. “A typical method used by employers is to increase benefits,” Mr. Lancaster says. “This can be seen as acceptable for the worker, but it should be approached with caution. It is important to ensure that your pay is changed when times are good. Unfortunately, this is not always the case.”
2. Build a strong argument.
Wild tales of how you've rescued your company from certain doom might entertain—but they won't necessarily land you a pay raise. Make sure you can deliver supporting documentation of your accomplishments to the organization's project portfolio ROI.
“Anything you can provide to an employer that shows an increase in revenue strengthens your case—whether it's the successful delivery of a program or project, savings that you've achieved, or implementation of a new technology platform,” Mr. Lancaster advises. “Any documentation that can be provided in terms of key savings or a key differential to the bottom line can be fundamental because it shows your value.”
Remember, your supervisor is probably thinking about budget issues, so position yourself as a prized business partner.
“One of the opportunities for project managers is to show where did you save us money? Where were you able to add value that allowed us to increase revenue? Did you understand the balance sheet?” says Mr. Barrett, who's also the president of Solutions Network Inc., a business consulting firm. “A little bit more of a financially savvy project manager really stands out.”
If some of your contributions are less tangible than cold, hard sales figures (for example, your excellent team-building skills), gather written testimonials from coworkers that support your value to the organization.
Understand what the salary range is for this position and get comparative numbers. Anyone who just walks in and says, ‘I want more money,’ is going to get laughed at.
—David Barrett, York University, Toronto, Ontario, Canada
3. Examine your motives.
Money isn't a project manager's only motivation for requesting a higher salary. Factors such as respect, appreciation, morale and job satisfaction also come into play.
“Sit back and reflect on what really are the underlying interests that are driving you to have a conversation with an employer about compensation,” says Mr. Gordon, a senior advisor to the Harvard Negotiation Project at Harvard Law School, which aims to improve the theory and practice of conflict resolution and negotiation. “Are your interests around money to pay the rent, acknowledgment of your contribution, status or fair compensation? Different interests might lead you to different options for what you might propose to your boss.”
The portion of project professionals worldwide who reported an increase in total pay (including salary, bonuses and other compensation) in 2009
Source: PMI Project Management Salary Survey—Sixth Edition
4. Be prepared to hear an answer you don't like.
If repeated requests for a salary increase are turned down, it might be time to reexamine your overall job prospects rather than your negotiation skills.
“If you're not receiving a favorable response and just receiving an instant ‘no’ to your request, it could be that in actual fact your employer wants you to leave the organization but hasn't really gotten around to managing that,” Mr. Lancaster warns.
5. Explore other options.
Negotiating doesn't always entail a bigger paycheck. If your request for a salary increase is denied, present your employer with other ways in which you're willing to be compensated for your hard work. These can include flexible work hours, training, more vacation time, a sabbatical, a laptop computer to work from home or a title change.
If you're happy at your current organization, it might be better to present a list of options that will boost your job satisfaction—without impacting your employer's bottom line.
If you're not so happy, then it might be time to start searching for a new job.
“Think a little bit about your alternatives,” Mr. Gordon recommends. “What would you do if you asked your boss for a raise, and he or she said ‘no’? One alternative is to swallow hard and go back to work. Another alternative is to start looking elsewhere and shop your résumé around.”
Companies don't often offer employees unsolicited salary increases. But with the right timing, approach and forethought, project managers can greatly increase their chances of receiving a pay hike. PM
PM NETWORK JULY 2011 WWW.PMI.ORG