1/13/19 - How to figure out what you’re worth

Businesses have to figure this out regularly. We should be doing it too.
BY LYDIA DISHMAN
https://www.fastcompany.com/90271054/how-to-figure-out-what-youre-worth 

There’s no shortage of advice on how to tackle the tricky business of salary and fee negotiations. What to say, and more importantly, what not to say during these conversations can make or break your chances to get the number you want. But how exactly do you calculate your worth?

The good news for jobseekers is that private employers in states and cities across the U.S. are banned from asking candidates about their salary history in order to set their pay for a new job. Candidates are free to come up with a fair number on their own that doesn’t tie them to their previous wages. But this doesn’t apply to freelancers and business owners.

The first step is to recognize that this exercise is no different than what businesses have to do in order to remain viable. “All companies take their time when calculating their value in the market,” says Soulaima Gourani, a lecturer, corporate consultant, and author. “They know how much they are worth,” she says and that information helps them survive under unsettled conditions of the slow economic recovery, as well as if they have to apply for a loan or sell the company.” Similarly, Gourani thinks that we should simply ask ourselves what our worth is in terms of yearly salary, hourly wage, or client fees.

One way to accomplish this is to look over your own work history. John Crossman, CEO of the real estate firm Crossman & Company, says it is easy to overestimate yourself if you’ve had a number of years under your belt. “I simply reviewed what I had consistently made working as a broker for several years and averaged it,” he explains, “I felt like it gave me a healthy baseline.”

FOR JOBSEEKERS
Another good place for jobseekers to start is to do market research. Amanda Augustine, career advice expert for TopResume, says, “I researched the salary for my most recent role by looking on Salary.com and PayScale to see if they had any salary data for roles similar to my title.” Augustine says that she uses these sites to customize a pay range based on her years of experience, education level, and employer size.

Before she recently got promoted, Jill Gugino Pante, director of the Career Services Center at the University of Delaware, used LinkedIn’s growing salary survey, as well as NACE, which is an industry-specific publication. “Using general sites can help,” Pante asserts, “but also identifying any industry-specific sites that report salary data can be key.” Recent grads with little to no full-time career experience may want to tap the Career Services Center at their alma mater. “Most universities and colleges report salary data on major and degree,” Pante says.

However, in Augustine’s case, she was interviewing for an unconventional position and struggled to uncover enough intel online to aid her negotiation. So she turned to her network. “I am fortunate to have cultivated many great relationships with others who work in a similar capacity for other companies and in similar industries,” Augustine says. “These conversations were crucial in helping me develop a salary range for my new role so that I could confidently prepare with insider’s knowledge before walking into the interview room.”

Pante says she employed a similar strategy by asking previous managers and coworkers to share their salary history. “I took into account when they started and how often they moved positions and organizations,” she adds.

Then Pante looked at her job description and identified how much time she would spend on tasks inside and outside her regular responsibilities. “This helped me figure out the impact I was making on the organization above and beyond what I was hired to do,” she says. Finally, Pante looked at her organization’s HR website for the salary ranges of the position she wanted to be in.

FOR FREELANCERS
While it’s all pretty straightforward for jobseekers, it can be more challenging for freelancers because of all the factors they have to weigh in order to come up with a fee for their work. This means that many of them undercharge, according to the Freelancers Union.

Some do it because they believe their fees should match what they made per hour at their 9-to-5 job, and/or they don’t have the confidence to price what they’re worth. Others underestimate how long a project will take. For most, the conversation around value is just too awkward, so they’ll take what they can get without negotiating.

Alison Grasso, a freelance film and video editor, says that commercial editing rates are by the day and you’d be booked for a determined period of time. “I typically do a project rate and just make sure any important or necessary deadlines are clearly indicated and that I am able to meet them,” she says.

However, as her freelance work is a side hustle to her full-time staff position in commercial editorial, she’s able to tap into industry intel, which gives her an idea of what things cost on a large scale, and what brands often pay for the work that she does in the context of a commercial production. “In that way,” she explains, “I have a somewhat concrete notion of what my time is worth based on what people regularly pay for it.” If she’s working with a smaller client, Grasso realizes that their budget may not be as large and she adjusts accordingly.

As for getting over the hump of awkwardness during fee negotiation, Grasso says that she presents links to relevant work to potential clients so they can see exactly what she can do, and also what she intends to do for them.

FOR BUSINESS OWNERS
Pricing services is a next-level discussion, according to Janine Truitt, chief innovations officer and founder of Talent Think Innovations. And one that requires some serious prep. “In the beginning, my learning curve was really trial by fire,” she recalls. People were asking for her services before she had a chance to research and set pricing models for them. This led to many instances of misalignment between her offerings and what she was charging.

This is when Truitt tapped her network. “I started to share my frustrations with my entrepreneurial coworkers and some mentors who had been in business longer than I had.” These inner-circle conversations yielded advice about what she needed to consider to set prices.

Truitt also looked up her competitors’ baseline pricing and looked at blogs or forums that gave her the considerations she needed to adjust her strategy. “Other times, I was completely blind and had to devise my own criteria based on what I knew so far,” she admits.

Although she doesn’t make it a habit, Truitt has learned that there is a trick to justifying fees. “There are industries and certain types of companies that will gravitate towards you when you have demonstrated that you possess a strong body of knowledge, skills, and experience alongside the proposed services,” she explains. Clients in the education, healthcare, and any government sectors value seeing her resume alongside a scope of work as a way of justifying her fee. “That said, it is very rare that I get this request from potential clients,” Truitt points out.

For anyone trying to calculate their worth in dollars, Gourani suggests above all to align the core of who we are with the life skills we’ve acquired. “If we stay true to our values and remain immune to other people’s opinions of us, we can price ourselves more efficiently,” she says. “Before you can negotiate your worth, you need to focus on the best you have to offer and let that shine through.”

ABOUT THE AUTHOR - Lydia Dishman is a reporter writing about the intersection of tech, leadership, and innovation. She is a regular contributor to Fast Company and has written for CBS Moneywatch, Fortune, The Guardian, Popular Science, and the New York Times, among others.