IN THIS STORY:
>Know your worth
>Getting more
>Make your move
>Pick the right one
>Promotions and raises
>Ten salary-related mistakes to avoid

Printable version

Spring 2003 Issue

Do you know how much you're really worth in the civilian job market? Are you prepared to negotiate a salary that is 10 percent to 20 percent higher than initially offered? Where can you find information on what employers are paying?

As you prepare to leave the military, one of the most important issues you will address is how much your skills and experience are worth in the civilian work world. You may find this challenging because you never had to negotiate salaries while wearing the nation's uniform. From the days you were a lieutenant, you've been paid in accordance with a standardized government pay schedule based on military rank and years of experience. As you get ready to transition, your salary — or compensation as it's more commonly referred to in the private sector — becomes negotiable.

In most private-sector firms, as in the federal government, salaries will vary in accordance with pay bands that have been developed for different positions. Because many retiring or former military servicemembers go to work for defense contractors, let's use that industry as an example. Much of the work by contractors is performed under "task order" contracts, with labor rates that previously have been negotiated by the government and the company (or its prime contractor). If a defense contractor sees you as a potential fit for a program manager position, you can assume that the hourly rate the government will pay that contractor for your services already has been established. And, because the company wants to make a profit, it will want your "loaded rate" (equivalent hourly salary plus benefits) to be less than what the government will pay them.

Don't infer, however, that companies don't have some flexibility in the compensation equation, because they do — especially for those candidates being considered for executive-level positions. Smaller companies also tend to be more creative when it comes to compensation, offering stock options and other forms of equity ownership.

As you prepare for the civilian work world, you will need to take a careful look at the salary issue. By doing the proper research to determine your worth and learning how to negotiate salary from a position of strength rather than need, you are more likely to get a fair salary that is commensurate with what you bring to the table.

Know your worth
Before delving into the salary-negotiation process, get a good handle on how much your knowledge, skills, and abilities are worth in the civilian marketplace. And for the purpose of this article, let's assume that your move will be to the private sector, as government pay scales are well defined and publicly available.

First, research the marketplace. If you were getting ready to buy or sell a house, you would want to know the details of recent home sales in your area. These are called housing comparables. When searching for civilian employment, you want analogous information - salary comparables. But because salary information in the commercial sector is much more private than what you're accustomed to, getting this information will take some work. Here are ideas and resources for acquiring the right data.

Professional associations. One of the best places to start your research is with professional associations in your desired civilian career field. How can you find these associations? Visit Association Central's Web site (available via www.todaysofficer.org) for excellent networking opportunities and salary survey information for different positions within various industries. By analyzing these numbers, you gain insight into what employers currently are paying for the types of positions that interest you.

Networking. By engaging friends and former associates in informational interviews, you should be able to discern what their employers are paying for positions of interest. One of the best networking venues available to MOAA members is its informational network contacts list (available via www.moaa.org/tops). Included in this list are more than 2,600 separated and retired military officers, all MOAA members, who have volunteered their time to guide transitioning officers. Your college alumni association may be another good source. Check if there is a local chapter.

Executive placement agencies. Recruiters at executive placement agencies are well-versed in what companies currently pay to fill positions in their areas of expertise. Contact recruiters in your desired career field. If they determine you are someone whom they potentially could place with one of their client companies, they likely will share with you their assessment of your salary worth. You can find executive placement agencies in your career field by getting a copy of The Directory of Executive Recruiters (Kennedy Information, 2003). Also, check out the several recruiter Web sites via www.todaysofficer.org. A recruiter's services often are free to you, as they ultimately are paid by the employers.

The Internet. You have a great information resource at your fingertips - namely, the World Wide Web. Numerous useful salary-related sites have sprung up during the last few years. For a list of some of these sites, visit www.todaysofficer.org.

The public library. Public libraries, especially regional libraries, are a free source of superb information. They have two things going for them — tons of business materials and a knowledgeable reference librarian. Take advantage of both. Also, check out American Salaries and Wages Survey (Gale Group, 2001).

Recent salary history. Examine your recent salary history. What you currently are making is a good indicator of your market value if your future employment directly leverages your military experience. If your employer doesn't take this into consideration, you likely will have a more difficult time achieving pay parity. When you review your salary history, take into account your military benefits, such as your tax-free housing allowance, health care coverage, and educational benefits.

Getting more
The time inevitably will come when you will need to engage your prospective employer in the salary-negotiation process. When it does, try to focus on a few things:

Translate your value into productivity. Buttress your stated salary requirements by explaining why you think you are worth what you are asking. Here your salary research will pay off. By interjecting specific reasons or supports, drive home your potential value to the employer. Be succinct, honest, and direct.

Focus on your accomplishments. Provide prospective employers with real-world examples of what you have done in the military and how those skills and experience will be of monetary benefit to them. Remember, it's your job, not the recruiter's, to ensure he or she understands how your talents and experience will benefit the company. In so doing, you are being employer-centered versus self-centered.

Ask the right questions. Based on your research on the company and the industry in which it operates, ask intelligent, reasoned questions that go to the heart of your potential role. For example, you will want to ascertain the number of staff (direct reports) who will be working for you, the types of assignments for which you will be responsible, the benchmarks that will be used to measure whether or not you have achieved your objectives, whether or not you will have profit/loss responsibility, etcetera. All of these should enter into your salary calculations.

Provide direct, accurate answers. During the salary-negotiation process, you can expect to be asked about your salary history. In most cases, especially in the defense-contracting arena, prospective employers already will know what you are making by looking at government pay charts. But never, ever, let them include your military retirement in your salary negotiations, as it's not relevant.

Project an image of value and success. You always should project an image of value and success throughout the salary-negotiation process and beyond. Companies want to hire candidates who will represent them well. Your overall image shows by the way you carry yourself, by the way you speak, and through your mannerisms, etcetera. You want to come across as a sincere, intelligent professional who does things right the first time with little or no supervision. The professionalism you show during an interview will convince employers that you are worth the salary you are asking.

Focus on total compensation. Your starting salary is only part of your total compensation; be sure to carefully examine the benefits as well. Benefits generally include a defined benefit retirement plan, medical coverage, life and disability insurance, vacation and paid holidays, and educational benefits. Other perks may include stock options, a company car, club memberships, and a severance package (generally reserved for executives).

Remain flexible and open-minded. As with any major life decision, you want to keep an open mind and remain flexible. Don't close yourself off from employment possibilities you had not previously considered, because unexpected luck may be close at hand.

Make your move
At some point during a job interview, the issue of salary will arise. Your strategy should center on getting the employer to offer a salary range before you commit to an actual figure. Pursue this tactic only if you are genuinely interested in the job and want to reach common ground. Let's assume, for example, that you are able to get an employer to say that the salary range for a position is $70,000 to $75,000. Your response might be, "Yes, that is close to what I was expecting, though I was thinking more in terms of $75,000 to $80,000." Once you have placed the top of the employer's range into the bottom of your range, substantiate your demand using the research-based evidence that supports your position. You might say, for example, "My research on other employers indicates they are paying in the range of $70,000 to $80,000. And based on my extensive experience, educational background, and degree of fit, I was thinking $80,000. Is that possible?"

Now let's assume you have found your perfect job, but after negotiating as hard as you could, the salary amount offered is $5,000 less than your minimum salary requirements. What should you do? Basically, you have two options. One is to turn down the offer. The other is to offer a renegotiation option whereby the employer agrees to review your performance, perhaps six months from your start date, and commits in writing to a salary increase if you achieve specific performance goals. By presenting this option, you are telling an employer you are confident he or she will come to realize you are well worth what you are asking, and you're willing to prove it through your performance.

Pick the right one
Eventually you will need to evaluate which job opportunity is the best fit for you. While salary and benefits are important, they should not be your sole consideration. Instead, ask yourself where you think you would most enjoy working. Try to gauge how well you think you will get along with your prospective boss and the other members of the team. Those dynamics, along with other factors (such as employment opportunities for your spouse), are far more important than a relatively small difference in compensation offered by competing firms. If the environment is not one you would enjoy, your tenure there will be short and the difference in starting salaries between competing firms ultimately will become meaningless.

Be sure to get any offers in writing. Don't risk the chance of any misunderstanding - on your part or on the part of the companies with which you've been interviewing. By getting the offers in writing, you can compare and contrast one against the other.

Because this is an important decision with serious ramifications for you and your family, you are well-advised to take your time. It also may be the case that you are waiting on offers to come in from other companies, which can give you some leverage in the negotiation process. While the length of time to respond to a job offer can vary depending on the circumstances, one week generally is an accepted time frame. However, if you are considering multiple job offers at the same time, you may be able to take longer.

Once you have decided to accept an offer, do so formally in writing. It is appropriate to send the hiring authority a letter in which you summarize your understanding of the terms of employment, accept the offer, express your appreciation, and indicate your willingness to get to work.

Promotions and raises
For better or worse, this likely will not be the last of your salary negotiations. Today, it is not unusual for someone to work for several companies in the course of his or her career. In fact, some of the largest salary increases you may receive will not come from staying within the same company - though that is certainly possible - but from being lured away to work for another firm.

In general, you will receive an annual review. However, unlike in the military, companies also may review your compensation and make adjustments accordingly. Expect a salary increase that roughly matches the annual rise in the cost of living or slightly better, depending on the performance of the company and your own performance. If you are promoted, you may get a more significant increase in pay. Other forms of compensation, such as stock options, profit sharing, and bonuses, also may be given.

We've all heard the saying "Money isn't everything, but it sure helps!" In the civilian work world, the compensation you receive in exchange for your talent is an indicator of your value to the employer. Because you want to be paid what you are worth, do your research, approach compensation from a position of strength, and be a savvy negotiator.

Ten salary-related mistakes to avoid:

• You raise the salary question rather than waiting for the employer to mention it first.
• You immediately reveal your salary expectations on your résumé or in a cover letter.
• You lack or have not researched backup information to substantiate your salary requirements.
• You talk about your salary requirements before being offered the job.
• You focus on your personal and financial needs rather than those of the employer.
• You attempt to negotiate your salary over the phone or by e-mail.
• You focus only on gross salary, without taking into account the value of benefits.
• You quickly accept the first offer.
• You accept the offer on the spot.
• You try to play hardball.

From Best Salary Tips for Professionals
(Bernard Haldane Associates, 2001)

Maj. Carl S. Savino, USAR-Ret., is the coauthor of four military-to-civilian career transition books, including From Army Green to Corporate Gray, From Navy Blue to Corporate Gray, From Air Force Blue to Corporate Gray, and Military Résumés and Cover Letters. He also is responsible for the Corporate Gray Military Job Fairs and Corporate Gray Online, a military-specific employment Web site (available via www.todaysofficer.org). Savino is a West Point graduate and life member of MOAA.