'Tis the season for holiday parties and asking for a salary bump. In the face of the labor shortage, tech workers appear to have more bargaining power than ever, and they’re using it. If you haven’t initiated or been part of a compensation conversation already this year, you might want to have one soon.
Allison Rutledge-Parisi, senior vice president of the People team at Justworks, spoke with Protocol about the best way to talk about raises: both as an employee and as a manager facilitating the conversation. Here’s what you should know.
This interview has been edited for brevity and clarity.
For the managers
What can managers expect this year in terms of negotiating with their direct reports that might be different than previous years?
It is a challenging balance at this time, the market is moving very quickly. And it's moving differently for different segments of an organization. So if you are sitting in the seat that manages compensation, then first of all, hang in there. I feel collegial support for everyone who's in the same position.
That internal equity lens is critical, it is critical to not have the last in be more highly paid than the first in. And so each move that you make with someone you recently brought in from the market always causes you then to look back and look at the person who's been there for three years in a role that's similar. And that is what's so hard here. And it's a concern that individual employees don't need to carry and so they can just advocate freely for themselves as they should. You have to balance fairness and continue to value those who are longer-tenured and have contributed, and not to allow them to slip behind. And that means setting a cadence of benchmarking roles that is much more frequent than you have ever done before. I mean, we're benchmarking every six months. We have to because the market is moving so quickly — not for all segments of the population, but definitely for the tech segments.
[Also], employees do tell each other their comp. Any norms of professional discretion have eroded greatly. And so I say to my recruiting team and HR partners in my company, just assume that that offer letter is pasted on the hall.
What shouldn't managers say, especially this year? I think a lot of them are afraid of losing someone, so I'd like to hear your top list of what not to say.
Don't say anything that dismisses a person's concern. If they're concerned and you value them and you want to hang on to them, you want to give them space to have the feelings they have. It doesn't mean you need to agree with them or even do anything about it. But don't dismiss concerns.
So stuff like, “What do you mean? You just got a raise.”
What you want to do is say, “Hey, I hear you. I know that you're advocating for yourself. That's awesome. You should, but let me go talk to so-and-so.” And then you come back and say, “Hey, we looked at the benchmark, this is in the range of reasonable, but I know you want your comp to be considered. Let's continue to talk about it and see how we can set that up in the future. Right now it's not going to happen because you're at market. I appreciate you bringing it to my attention.”
And if employees bring up inflation, is there a certain way employers can prepare for that conversation as well?
Inflation is kind of a tricky thing, and so is cost of living. There's always an argument. I actually don't think it's the most persuasive argument an employee can bring, at least if you're in an environment where you look at that market benchmarking. Market benchmarking includes inflation, that's what you're looking at. I understand that employees like to say, “Hey, look at market, but don't forget to add on inflation,” but they're the same.
Is there anything else that you feel like a lot of people forget or leave out of this conversation from the employer side?
I think the key is patience and thorough preparation for any of these conversations. And if you can’t meet the employee’s concern with an actual change the employee is requesting, explain why. And if it's reasonable … keep the conversation open at a set date in the future, when you think you might be able to advance the conversation.
It is scary and tough, and managers dislike compensation conversations; they just want to get work done. So one way that people who are in charge of the whole compensation process can help is [by offering] talking points for managers that take into account each employee's point of view.
For the employees
It is really hard to find an engineer right now. When they're going into these conversations, they have a lot of leverage. What should their focus be?
Well, they should pay attention to benefits: They matter. Benefits can be highly technical and nerdy. You have to bring the discipline of paying attention to what it means … Generally speaking, in the tech industry benefits tend to be quite favorable, but you want to pay attention to that. And then negotiate your base.
Look at where the company's future is in terms of its financial health.
We talk to a lot of employees every day, and one thing I'm hearing is if their company lets them move or relocate, they almost feel like they can't ask for anything else on top of that. They might live in a market where the cost of living is a lot lower than the Bay Area. So what merit do they have to still negotiate before the end of the year?
You always negotiate. But you have to do it with professionalism. It’s not really, “Can you?” It’s, “How do you?”
You advocate with the understanding that internal equity matters … But it's good to advocate for yourself in a steady persistent way, in a way that is collaborative, meaning in a collegial way, not in an antagonistic way, and that's the best way to advocate for yourself. And generally speaking, it brings results, especially if you are a good performer.