In Part 1 of this series on navigating compensation, I made the case that too many candidates focus on a compensation maximization strategy instead of a career growth strategy when comparing opportunities. It’s a bad compromise. In Part 2, ideas were presented on how to have the candidate enter into a career-oriented discussion to determine if your opening is worthy of consideration. In Part 3, I described four techniques on how to position your job as a career move, while ensuring that compensation is relegated to a lower order need. In this final article in the series, I’ll discuss how to negotiate compensation and extend the offer.

In Part 1 of this series on handling all topics related to compensation, I made the case that too many candidates focus on a compensation maximization strategy instead of a career growth strategy when comparing opportunities. It’s a bad compromise. In fact, a new book, Chasing Stars, by Harvard’s Boris Groysberg, suggests it’s the kiss of death.

In Part 1 of this series on handling all topics related to compensation, I made the case that too many candidates focus on a compensation maximization strategy instead of a career growth strategy when comparing opportunities. It’s a bad compromise. In fact, a new book, Chasing Stars by Harvard’s Boris Groysberg, suggests it’s the kiss of death.

As the economy strengthens, negotiating compensation will become a huge part of the recruiting puzzle. Before you even get to the negotiating part, navigating through the maze of compensation issues will become a prerequisite for sourcing, recruiting, and hiring great talent, whether they’re passive or active.

The Basics of Hiring ROI

Caution: you are about to enter the zone of the CFO. Tread carefully. Bring your green eyeshade and calculator. However, if you master this information, you’ll be able to calculate the ROI for your current hiring processes and any new hiring initiative imaginable. Beware though, if it turns out that the ROI of your current hiring process is less than 25%, you’re in big trouble. On the other hand, if any proposed new program is over 100% you’ll be able to get instant CFO approval and a high-five, along with the check. But don’t be seduced, any new hiring programs might not work as promised if the economy recovers anytime soon. Then you’ll just be scrambling to stay even.

To see the importance of calculating hiring ROI, just multiply the number of people you’re forecasting to hire in the next 12 months by their average compensation. This is probably a big number. For example, if you’re planning on hiring a group consisting of college grads, experienced techies, and a bunch of customer service reps, you’re probably looking at an average compensation of $65,000. If you’re hiring 1,000 of these folks, this means you’ll be spending $65 million on new hires in the next 12 months, and if you’re going to hire 100 you’ll be spending $6.5 million.