No matter what you’ve heard, HR and Finance DO NOT huddle in a corner throw some chicken bones in a ceremonial dish, burn some incense, and have a salary number come to them in a Dilbert-esque vision. This also applies to rumors about throwing darts at a board or the use of a hand-cranked lotto machine.

Also not how they do it.

What they really do is crunch the numbers on an equation that looks something similar to this:

what you’re currently making + what the market rate is + how you did on the interview + how hard its been to fill the role + how much training and ramp up you’ll need + current budget + comp of other team members with similar skills + increase of 10-20% for a  promotion = total compensation offered.


Here’s a breakdown of some of the most important aspects of this process:

What the market rate is – HR departments, be they start-ups or huge enterprise organizations have lots and lots of data about what similar organizations are spending to attract & retain talent. Online services, paid reports and studies, their own experiences and benchmarking all contribute to some guidelines in this area.

The good thing for you is we at ingenium also know this and are happy to bring you up to speed.

“Standard” increase of 10-20% –  I put standard in quotes because there is no rule book that says this is what the industry norm is or should be. Most companies do want to make as compelling a proposition as they can. Today that seems to fall in the 10-20% range. Of course it could be lower or higher when considering other mitigating factors.

Current budget & how you match up to the role – one blind spot for job seekers is that you will get a raise simply for switching jobs. Not true. A good example is real estate. You have a market value similar to that of your home/apartment. If you make a capital improvement to your property, that home is presumably worth more and you can command a higher price tag. You don’t necessarily get more for your home just because YOU want to sell it. If you need additional training or need to learn a new language or learn the business/domain of the new company those things cost energy & time and money. That has to be a consideration on what they are going to offer you and you need to be cognizant of it too.

Difficulty in filling the role – This is economics 101. The longer the role is open, the more difficult it has been to fill. The more difficult to fill, the scales of supply & demand tip in your favor and thus the more flexible they can be for the right candidate. Thankfully, we know all about this: it’s literally our job and can help you maximize your worth in the compensation discussions.

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What you’re currently making – Okay, we know. In 20+ years of being a recruiter I have yet to hear a candidate tell me s/he is over paid and looking to get back in line with his peers and hoping for a market correction. Let me guess -- you’re being paid under market value, you took a cut from your previous job because of the equity upside, you haven’t had a raise in years, your being paid less than a colleague who does less work at a poorer quality than you, your buddy from school who is a dope is making more than you. It’s all terribly unfair, though there are key things to remember at this stage:

  1. Don’t lie about your current compensation: Eventually, if you get the offer, during on-boarding your new employer will ask for verification, often this involves pay-stubs from your current job, recent W2’s, etc. If you’re numbers don’t match there’s a good chance they’ll revoke the offer.
  2. Your entire compensation matters: Any quantifiable bonus, remaining equity, stock options, the % in your 401k matching, vacation days, education/training allowance, etc all could help ratchet things up a few ticks, the more information we can give them the easier it is to make a case.

Which brings us to the most import part of this equation: You.

How you did on the interview – The better an impression you make, the more you convince the team of how invaluable you are, the more pressure you can exert on the factors above. The best way to do this is of course, is by preparing for your interview, not just technically, but also in putting your most charismatic, thoughtful foot forward. Here at ingenium we help prepare you for this by bringing you into our office, giving you personalized interview tips, company culture and interview specifics, and often examples of things that worked for a candidate we had previously placed at the company.

Our job here at ingenium is to keep you prepared and informed throughout the process, so that when you do get that offer letter, you can look at it objectively and without surprise. After all, we are here to represent you.