“Even when paid as a W2 employee, … think of the job more like a consultant or a contractor would. You come in on a certain project or are hired to meet a certain objective. Once you get it done, you move on to the next role within the company, or you move on to another company.”
Compensation in the workplace used to primarily refer to direct compensation: salary. Increasingly, particularly after two years of a global pandemic that has resulted in a double whammy combining a shortage of talent with high voluntary turnover, indirect compensation is increasing in importance. Other forms of non-monetary pay, benefits or perks offered are the new ways beyond cash to help attract and retain talent.
The workplace has undergone a profound transformation. How we work and where, how much our personal life has merged with our professional responsibilities, how much we value our well-being—all these themes were heightened over the last two years. For instance, it is understandable that many people are not prepared to readily surrender the new-found work-life balance achieved via remote work for a return to the pre-pandemic office grind. The question now on everyone’s mind: is remote work negotiable? What else beyond salary might be on the table?
Negotiating for indirect compensation is a skill that candidates and hiring managers are still learning, and we all need to adapt our definitions on what is important and negotiable. Susan Baushke, a Career Transition & Mobility Consultant for LHH and independent coach, shares her experiences working with clients to negotiate the right working situation for them, beyond salary.
What is indirect compensation?
Indirect compensation can be anything from a gym membership to a flexible work schedule, to the freedom to go for a walk or even nap during work hours, to training and development. What used to serve as shallow enticements that mostly encouraged workers to stay in the office longer hours (think: ping pong tables and free snacks of the early Silicon Valley days) are no longer enough to entice people to a company.
Indirect compensation, therefore, has become a greater part of the negotiation conversation. Baushke says she has been spending a lot more time with clients helping them build their negotiating skills. The major focus is on what they really need to achieve work-life balance and remain fulfilled in their role within a company.
“Interviewing has always been a two-way street,” Baushke says. “Before now, candidates always knew the employer was evaluating them, but few candidates ever considered that they should be evaluating the employer at the same time. That thinking is much more prevalent now.” It’s no longer about candidates hoping to be selected. She tells her clients: “You have to pick them [the company], and you have to be conscious about it. And if that company and role is not fitting your requirements, then you need to shift gears and look elsewhere.”
Balance vs. salary
Baushke describes, “It used to be individuals were ‘lifers’; they would remain loyal and stay at a company for their entire career. I encourage my clients to reframe their thinking. Even when paid as a W2 employee, they should think of the job more like a consultant or a contractor would. You come in on a certain project or are hired to meet a certain objective. Once you get it done, you move on to the next role within the company, or you move on to another company.”
Everything is changing, both for potential employees and hiring managers. “It’s an interesting shift,” Baushke says. “Companies are having a hard time trying to keep employees interested in their position. Companies need to hire with the intent to build careers and find growth opportunities that are mutually beneficial.”
In essence, a job offer needs to involve more than a salary agreement. People want to know how accepting a job will impact all areas of their lives, from health to family obligations to continued learning opportunities and career development.
“The clients I work with are looking at what is right for them and what they need to obtain their desired balance. Everyone is so aware of balance right now,” Baushke says. “For instance, several people I’m working with have small children; they’re thinking about flexibility to cover illnesses and child care more than ever.”
Other points of uncertainty are jobs that are pitched as remote. Candidates feel distrustful that they won’t be penalized for not working in the office. Some people want to be sure they don’t land a job that demands more hours per week than they expected to give. Some are concerned their assigned projects will not be challenging enough. Some positions may offer insufficient paths for learning or advancement. All these points need to be worked out at the negotiation table when candidates—particularly once they have an offer in hand—have the most leverage.
Leaders looking to attract the best talent, Baushke says, must direct the company in the right way. “The company is their product,” she says, “and they have to think how to get that out into the marketplace and tie their talent to the mission and the objective.” To attract talent, hiring managers need to be aware of what their potential employees want and what they need to feel satisfied and choose to stick around. The time for that conversation is the negotiation table.