Understanding your value is mission critical to securing a challenging yet rewarding leadership role in the life sciences, yet few senior managers and executives do the necessary due diligence needed to arrive at an appropriate value. In this article, we’ll guide you through doing just that; helping you source the information you need to determine your compensation requirements which will inform your executive job search and offer negotiation.
Determining your compensation requirements (salary & fringe benefits) early on in your executive job search:
- ensures you don’t apply to positions that won’t meet your prerequisites;
- helps you fend off compensation-related questions during interview;
- prevents you from inadvertently pricing yourself out of the market;
- assures that the hiring organisation values your true worth;
- gives you confidence when it comes to salary negotiation.
Though we have written this article from the perspective of executive job seekers, the later three points equally apply when requesting a pay rise.
How underestimating your value can cost you $$$
If you don’t understand your value, you risk accepting a compensation package which does not reflect your true worth. Not only does this risk undermining your confidence or making you resent your prospective employer, but it could put you in financial jeopardy if you get your figures wrong.
Promotions are not guaranteed. You are better off negotiating a compensation package that allows you to flourish in your new role while leaving wiggle room for a raise in the future. In fact, failure to negotiate your compensation package could cost you hundreds of thousands over the course of your lifetime. In a recent study, ZipRecruiter calculated that someone who negotiated their salary up from $40,000 to $45,000 would earn around $750,000 more over 45-years than they would had they accepted their first offer. For executives, the cost could be several times that figure!
It’s also worth noting that, when it comes to job offers, negotiation is the rule rather than the exception. As a senior manager or executive, you are expected to be a seasoned negotiator. Use this opportunity to demonstrate your negotiation skills and wangle the optimal compensation package during the offer negotiation stage. You’ve nothing to lose and everything to gain.
How to establish your value
There are seven steps to establishing your value and determining your compensation requirements for your next career move in the life sciences. While you will likely have a ballpark salary in mind, these steps will help you validate your assumptions and tailor your compensation requirements to match your circumstances and the prevailing market conditions.
1) Establish your financial requirements
First things first, calculate your current compensation package; the combined value of your basic salary, benefits and bonus.
Next, establish your financial needs and what your base salary must cover. If you’re comfortable on your current base salary, and assuming you’ll be gaining a raise with your new job, this should be an exercise in due diligence. However, if the role requires relocation or a substantial commute, and these costs are not born by your new employer, you will need to factor these in.
Finally, consider your fringe benefits. Are there any benefits your household has become reliant upon and you would want to replicate with your prospective employer, for example, medical insurance? What would be the financial cost to you and your family if these fringe benefits could not be provided by your prospective employer and you would have to cover these costs yourself?
Don’t forget to consider what you’ll lose in leaving your current employer, namely bonus and certain perks, and factor this into the equation when calculating your compensation package.
2) Determine the going rate
Now you know your current compensation package, it’s a good idea to benchmark this against similar leadership-level roles. What can someone with your skills, experience and competencies expect to earn, both in the life sciences and related industries? Is your current salary competitive or are you being under or over-paid? The following online resources will help you find answers:
The figures provided are intended to offer guidance rather than concrete facts. As we’ll explore later, salary ranges can vary with industry, function, location and market conditions.
How does your desired salary compare with the industry average? If you’re underselling yourself, up your salary requirements. If you’re overselling yourself, you might need to reconsider your options, including relocation or even changing industry to acquire the salary you desire. You’ll have a clearer understanding once you factor in industry weighting.
3) Consider industry weighting
Some sectors and business functions, even within the same industry, may pay more for an equivalent position. This is usually governed by skill scarcity; whereby a particular combination of skills and experience is hard to come by, forcing hiring authorities to increase salary ranges in order to attract and retain the very best candidates from a restricted talent pool. You can find information on average salaries and other relevant industry statistics in your locality by contacting regional or national government bureaus, for example, the Bureau of Labour Statistics in the United States.
When considering industry weighting, ask yourself the following questions:
- Is my industry expanding or declining?
- Are executives in my industry in high demand?
- Is my current salary in-line with the industry average?
The answers to these questions will give you some indication of how hard you can negotiate on the basic salary and fringe benefits when you receive a job offer.
4) Factor in economic conditions
The prevailing economic environment will undoubtedly influence both the availability of executive-level roles and the compensation ranges achievable. This follows the principles of supply and demand; when they are fewer positions available and more candidates applying for them, hiring authorities have more freedom to manoeuvre and can negotiate lower salaries. If your compensation requirements are too high, you could effectively price yourself out of the market. Better to realign your exceptions now by following the guidance in this article than receive a shock low offer.
5) Bring geography into the equation
Salary ranges can also vary both regionally and internationally. Regional differences, if apparent, tend to reflect the cost-of-living or they might be indicative of a skills shortage in the locality. In contrast, international differences can reflect currency, local pay structure, tax and many other variables. When comparing global salaries, don’t just convert the figures into your native currency. Cost-of-living can vary tremendously, and there are tax implications if you wish to work in, but not relocate to, a country. If you’re considering relocating abroad, seek professional advice.
When considering compensation based on your geographic location, ask yourself these questions:
- What commute am I willing to make?
- How much am I prepared to travel?
- Am I willing to relocate?
These questions will not only help you access job fit – how well you are suited to the position – but they can help shape your compensation requirements. It’s worth noting that some life science organisation might offset some of these costs, for example, providing relocation costs or subsidised travel as part of their fringe benefits package. If in doubt, ask the hiring manager.
6) Access the internal environment
Organisations going through a merger, acquisition or other transformational activity will do all that is feasible to retain and redeploy their existing staff. As such, major business transformations can have a bearing on both the availability of executive-level roles and the compensation ranges available. You can gain insight into an organisations’ internal environment by:
- Reading their annual review;
- Viewing their annual accounts;
- Finding shareholders information online;
- Checking the current share price and its previous history;
- Searching for news articles on the organisations’ financial performance.
7) Don’t forget the sweeteners
Review your CV, LinkedIn profile and recent accomplishments to identify any elements that could give you a competitive edge over other candidates vying for the same position. These ‘sweeteners’ could be the key to unlocking a higher salary; increasing your value exponentially in the eyes of your prospective employer. The following are examples of ‘sweeteners’ you can leverage:
- Unique or hard-to-come-by experience that other executives are unlikely to match.
- Specialist qualifications or skills which you can leverage if you offered the position.
- An established industry network that could unlock doors for your prospective employer.
If you’re short of sweeteners, consider engineering them into your existing role – taking on extra responsibility or putting forward and executing a new idea/initiative – or brushing up your skills with a relevant qualification or course. Note that both of these are not quick wins, so it makes sense to continue your job search while gaining these skills and experience.
Bringing it together
Having conducted the seven steps above, you should have a clear indication of your desired compensation package; one that will provide you with the necessary financial incentive to take on your next executive-level opportunity without the risk of pricing yourself out of the market. However, if you’re still struggling to tie down a salary, take your current basic salary and increase it by twenty percent. This is broadly in line with the average salary increase executives achieve when changing jobs, though the exact figure varies year-to-year with market conditions.
Once you have arrived at a figure for your basic salary, present it in the form of a salary range, with your desired salary being the mid-point. That way, you never need to divulge an exact figure, instead, providing a broad compensation range to the hiring manager should he/she inquire. This ensures you won’t compromise your advantage when it comes to offer negotiation.
For more job search advice tailored to senior managers and executives…
- Read How To Give An Outstanding Interview Presentation: Tips For Life Science Executives.
- View our life science job board to kick-start your executive job search.
* Fraser Dove International is a specialist executive search firm operating exclusively in the Life Science industry. Passionate about people, we take pride in helping exceptional life science organisations source the talent they need to design, manufacture and distribute life-changing drugs, treatments and devices which transform and save patient lives.