Navigating Job Change and Negotiating With Confidence

[00:00:00] Gorick Ng I would say, first, write it down. Second, rehearse in front of the mirror. And then third, rehearse in front of a friend. It's about what you say, and then it's about how you say it. Because tone of voice matters just as much.

[00:00:18] Jennifer Borget We've all been there. Whether you're looking for a new job or negotiating a raise at your current one, conversations about compensation can feel awkward. And understanding how your total compensation and benefits impact your money broadly isn't always straightforward. You might be looking for increased paid time off, the ability to work from home, or maybe you're curious how to get that promotion and pay increase that you've been working towards.

No matter what your career priorities are, we'll help answer the most common questions you'll likely have and share common blind spots job changers and even those staying put often overlooked. We'll do it all while helping you create a plan that makes your money work for you.

In today's episode, we're going to discuss all things compensation, from salary and your 401(k), insurance and benefits, how to prepare to have your conversations about money at work and how your new (hopefully increased) pay affects you at home. I'm joined by Wall Street Journal bestselling author and Harvard Career Advisor Gorick Ng. Gorick is an expert on the unspoken rules of the workplace, and he wrote a bestselling book all about him, and he has helped people across the country level up their careers. He's also the creator of How to Say It: Professional Communication Flashcards series.

Later on in the episode, I'll be joined by Tom Gilmour, a financial expert and certified financial planner with Northwestern Mutual. Now, Tom's team is responsible for developing specific personal financial planning advice and strategies that then get built into Northwestern Mutual's proprietary financial planning tool. So I'm really excited today to just chat about financial compensation, the aspect, you know, this aspect of career, I think, can be kind of intimidating for a lot of people. But before we jump into that, how about you just kind of tell me a little bit about yourself and your career?

[00:02:06] Gorick Ng Sure thing. Well, like you, I'm a first-gen low-income college grad turned first-gen professional, which means that I'm the proud son of a working-class single mom who left school when she was 12 years old. And I had to go through a lot of this growing up process through trial and error. So I've started my career off in investment banking, moved over to management consulting, returned to get my MBA at Harvard Business School and took a career pivot—and ended up becoming an author of a book called The Unspoken Rules: Secrets to Starting Your Career Off Right. I now speak at colleges, universities, nonprofits and companies to train their early career talent on how to, well, start their careers off right, basically handing forward a lot of the things that I wish someone had told me sooner.

[00:02:52] Jennifer Borget I guess “paying it forward.” I love that so much because I think a lot of times, you know, people go and they get all this information, and maybe they're so busy doing, you know, their own things that they don't think to turn around and, like, share with others. And you're just doing that so much. And I love that. Just to give our listeners some context of this, just give me an example of an unspoken rule.

[00:03:11] Gorick Ng I realize that there is an unspoken framework for what it means to be a high performer in the workplace, and it's a framework that I call the three Cs: competence, commitment and compatibility. Where especially when you're new, you need to demonstrate that you're competent, that you can do this job well; that you're committed, that you're excited to be here and to grow here; and that you're compatible, that you can get along with others. And that is just the ticket to admission. And what a lot of people do is they'll overstretch their zone of commitment by saying, “Hey, can I get more responsibility or a higher title or more pay?” and what their managers are secretly thinking is Gee, you've only just been here for a week. You're not even showing the detail orientation that I want. You're not even done your first assignment. It's a little early.

And then you've also got folks who are waiting a little bit too late. I mean, I speak to a lot of folks again, who don't have the mentors whispering in their ears, and they apply the advice that I got from my single mom growing up, which is put your head down, do the hard work, and let your hard work speak for itself. And the consequence there is they wait and they wait forever only to see that colleague next to them have just as much (if not less) competence but more confidence—that invisible fourth C—and get that promotion. So it's important to figure out: Okay, if I look at the unspoken rules of what it takes to get promoted in this organization, what does it look like and sound like for me to demonstrate these three Cs?

[00:04:45] Jennifer Borget You know, when it comes to compensation, when we're going through this process and different things are important to different people. So when you're trying to find a job, maybe you're interviewing for a job, for listeners, how can our listeners identify what's important for them in a job search when it comes to different kinds of compensation? I'm thinking of things like vacation days or ability to work remotely or company culture. Are there any tools that you'd recommend?

[00:05:13] Gorick Ng Well, actually, the first tool is self-reflection. I have noticed that people generally fall along the spectrum of experience oriented to goal oriented. So the experience-oriented folks are those who are looking for good work/life balance, stable pay, the opportunity to work on something that they enjoy, the opportunity to make an impact, to do something that builds on their skills, among many other considerations that fall under the category of experience of “how do I maximize my fulfillment and impact on a daily basis?” On the very opposite end of that spectrum are the goal-oriented people. These are the people who … “I want to become CEO. I want to have this house, that car, this lifestyle, and I'm going to do whatever it takes to get there, and I want to accelerate my path to whatever position.”

So I found it helpful to think about which end of the spectrum you fall more towards. Because when I speak to goal-oriented people, they look down upon the experience-oriented people, and they're like, “Oh, how lazy.” And then meanwhile I go talk to the experience-oriented people, and they tell me, “Wait, look at that goal-oriented person there, and look how oblivious they are to how much their how much more there is to life than just attaining this particular title or level.” So I think there's no right answer. It's a matter of personal values.

When you're looking for your next role, I think it's important to ask yourself, What stage of life am I in? What do I care about? And be honest with yourself about that. And don't let your parents—don't let society tell you what you should value. You should figure out what you value first. Once you figure out which of those two ends of the spectrum you fall more towards, then we can start looking at, okay, if you are, for example, on the goal-oriented side, my suggestion there is don't think about your next role, think about your next next role. Or think about where you want to be at the pinnacle of your career, and then reverse engineer your way back to what you should do as a best next step.

One of my hobbies is internet research of people that I admire. So whenever I come across somebody where I'm like, “Oh, this person seems rather cool. I would love to figure out how they got to where they are today,” I open up their LinkedIn profile. I open up their Wikipedia profile. I listen to their podcasts, watch their YouTube, and I try to deconstruct: Where were they when they were in my position? And what maneuvers did they take to get to where they are today? What jobs they take? What roles they take? How long did they stay? What cities do they move to? What side hustles might they have participated in? And how do they jump from one place to another? That's what I would encourage the goal-oriented folks to be thinking about.

And then for the more experience oriented, think about, hey, what kind of lifestyle do you need. What level of compensation do you need to feel comfortable, to feel like you're meeting your basic needs and putting money away for whatever it is you care about? And then start thinking about who you’re going to be working with because your manager is going to dictate your day to day a ton. What are you going to be in charge of? And do you actually care about the mission of the organization, the work that you'll be doing day to day, and how your day to day will be set up? Do you have to commute a long distance? Do you get to work from home? A lot of those things come in as well.

[00:08:42] Jennifer Borget It's funny … as you talk about these two different people, because I feel like at one stage of my life, I was definitely the goal-oriented person, doing that, like researching who I wanted to emulate, how did they get to that point in their career, where did they move from, what were their steps? And as I've gotten older and had a family, it's definitely shifted; I'm like, “Okay, what is the most flexible? What is going to work? What job can I fit around my life?”

But let's talk finances now, too. What kind of financial compensation can someone receive through their work? I know there's 401(k) and things like that. Are those also negotiable?

[00:09:25] Gorick Ng They are, depending on your context. There is your base salary, and then there is a bonus. And it comes in three flavors: There is a year-end bonus, there is a signing bonus, and there is a potential relocation bonus. And then you've got 401(k) matching, professional development budgets, vacation days—all of which are monetary in some form. So let me first talk about the base salary, and then let's build up from there.

Your base salary can be negotiable, but it depends on your context. If you happen to work at, for example, a Fortune 500 company that hires on a cohort—you're one of, let's say, 100 people who are hired at the same time for the same level for a rotational program or an analyst program—in those situations, there's a good chance that the employer has already standardized salaries across everybody. And I've heard of situations where people thought that they could negotiate their salary only to actually even have their offers reneged because they came across as if they were incompatible. Coming back to those three Cs because the employer thought, You did a great job in the interview process, but your behavior now suggests to us that you don't quite understand how things work here. So I've heard of that happening.

That said, this is just a very narrow set of opportunities out there. If you work at a smaller organization, one that isn't hiring at this massive scale, chances are your base salary is, in fact, negotiable. And we can talk about tactics if you'd like. Whether your base salary is or is not negotiable, then you have the bonuses. And sometimes people will find that if they can't negotiate their base salary, they can ask … “Hey, I am getting this competing offer for this level. Would it be possible, given that we're not able to adjust the base salary, to consider matching their offer with, for example, an increased signing bonus?” And sometimes organizations will say, “Actually, yeah, because this is from a different line item. We're not messing with our salary bands. We have this money allocated already. Yeah. Take it.”

Others will say, “Actually, you know what? We can't do it in terms of our signing bonus, but we can give you a relocation bonus.” And then from the jobseeker’s perspective, “Money is money. It doesn't matter which budget or line item it’s coming from. So yeah, absolutely. Give me extra money to move across the country.”

And then some organizations will offer a year-end bonus. And often that's set in stone. But of course it's variable depending on the performance of you, your team, your department, your organization.

And then after all of those things that are set upfront, you've got your professional development budget, which I would encourage folks to look into because a lot of organizations offer, for example, tuition reimbursement programs, money to go to conferences, get certifications, take online courses, etc.

And then finally there's the 401(k) match, where oftentimes that, too, is standardized just as part of their HR processes. But absolutely look into whether there's a matching program, where there's a contribution program.

[00:12:34] Jennifer Borget Let's say you're somebody who hasn't done this before, who hasn't tried negotiating and maybe getting that wording right. How do you prepare for that conversation?

[00:12:43] Gorick Ng I would say first, write it down. Second, rehearse in front of the mirror. And then third, rehearse in front of a friend. It's about what you say, and then it's about how you say it because tone of voice matters just as much. You can go into your conversation saying something like, “Thank you so much for this amazing opportunity. After having spoken with so-and-so, so-and-so, and so-and-so, and now so-and-so is part of the interview process, I'm even more excited about this opportunity than when I first applied. I did want to share that I've had a few other competing offers that are offering a compensation package at this range. I wouldn't want money to be the one thing that stands in the way of us being able to work together. However, I did want to ask if there was any wiggle room in what you're able to offer to perhaps get close to or to meet these other competing offers that I've received.” Now, I totally just made that up.

[00:13:44] Jennifer Borget That was really good; let me write this down! That was great.

[00:13:49] Gorick Ng If I were to deconstruct what I just said, the intent behind what I said is, “Hey, I'm asking, and I'm asking politely and gently. I'm not telling you that I'm better than you. I'm not telling you that you're beneath me. However, the reality of the situation is I do have these competing offers. They're offering me this amount. Are you able to do anything with the expectation that I don't want money to be the sole determining factor?”

Now, of course, in the back of your head, you're probably thinking, Of course, money's going to be a factor. I mean, why would I take $30,000 less just to work with you? Unless this gets you closer to your longer-term goals from a credibility, network, whatever perspective. But your tone of voice matters a lot, and you want to come across as clear but also humble.

[00:14:44] Jennifer Borget But let's say you're already in this job, and you're wanting to bring this up to your boss. Or maybe you're in the running, you know, starting to negotiate salaries, but you don't have other offers. Is there still hope?

[00:14:55] Gorick Ng There is hope. But leverage is an unspoken rule of the professional world, and it's important to build leverage. So what does leverage look like once you're in a job? Well, have you established that you're competent, committed, and compatible? Have you established that you can be trusted? Can you establish that maybe you're a part of the future leadership match? Put yourself in the shoes of the higher-ups in your organization. They're all sitting around a conference table and they're asking themselves, Who's going to lead this company one day? Who should we invest in next? Who could take their position? The more you can be the name that gets dropped in those closed-door conversations, the more valuable and indispensable you are to the organization, and the more leverage you have to be able to negotiate.

I'm thinking back to an executive committee meeting that I had a chance to sit in on at a global law firm, and they were discussing who gets to make it to partner. And one of the things that was talked about was “Oh my goodness, we really can't lose this person because they brought in all these clients. If they left, they would bring all these other relationships with them. We need to keep this person around.” That's leverage right there. Now, if you don't have that leverage, start to build it. I mean, take on projects that are mission critical to the team, build relationships around your organization so people know you, and establish yourself as someone who deserves the investment of the team.

[00:16:30] Jennifer Borget That is awesome. I love that story so much. So what kind of advice would you give to a listener who's nervous to bring up compensation with their employer or a prospective employer?

[00:16:40] Gorick Ng I can relate to the nervousness. I mean, it's the same nervousness that you have going into a job interview. It's the same nervousness that you have walking into a big presentation. And I think the nervousness comes from uncertainty. Am I doing the right things, and am I coming across in the right way? And what I personally found to be helpful is to just talk to more people about their own personal experiences. I mean, I guess you could consider me a bit of an extreme case, because I ended up going from talking to one person to like over 500 and then wrote a book out of it. But I'm kind of walking my own talk here, right? Talk to people who've been in your shoes before because you kind of have no idea what's normal. And it's easy to imagine yourself being entitled or asking for too much or crossing the line. But when you talk to enough people about their own experiences, you'll start realizing that there's a lot of this invisible work that no one tells you about. That's very normal.

[00:17:43] Jennifer Borget All right, Gorick, you have been amazing. I have one more question for you. If you could give one piece of advice to someone who's considering a career or job change, what would that be?

[00:17:55] Gorick Ng My one biggest piece of advice is to ask yourself, Who do I want to become, or whose life do I want? Find that person, and then find another person, and then find another person and reverse engineer how they got to where they are today. After three searches, you'll start seeing patterns around what it takes to reach these goals of yours.

You may notice, for example, that if you want to be a big-name journalist, you start off working in your campus newspaper, and then you work for a local news station, and then you work your way up as you build your portfolio. You may realize that if you want to make it big in academia, it's all about publishing, speaking at conferences, and then mentorship and sponsorship, working in the right labs, getting the right funding. If you want to, for example, rise up the ranks in a large corporate environment and you want to be a general manager, you may soon realize that general managers often are people who've seen multiple functions, who've invested their time in a particular industry or domain. They built client relationships, vendor relationships, internal relationships, and they've got advocates everywhere. That then propels them to this role of general manager.

So you start deconstructing people's paths, and they start becoming apparent to you. It's no longer so mysterious.

[00:19:25] Jennifer Borget That's great. This is so good, Gorick. Thank you so much. This is a wealth of knowledge. Thank you for sharing that with us.

[00:19:35] Gorick Ng Oh, I had so much fun with you, Jennifer. Appreciate your thoughtful questions.

[00:19:39] Jennifer Borget I really enjoyed getting to sit down with Gorick and pick his brain about navigating a job change, negotiating your salary, asking for a promotion and so much more. It's something that most of us are going to go through at some point of our lives, but I don't think we talk about it enough. So many great insights in our conversation, and I especially loved his advice on practicing in the mirror before you head into these negotiating conversations.

Next, changing jobs or getting a promotion can be a great time to take a step back and look at your financial situation more broadly. I sat down with Tom Gilmour, a financial expert and certified financial planner with Northwestern Mutual, to really dive into how all this intersects with your financial plan. And I asked my questions about putting your money to work for you. Now, let's talk about something that's often further out for a lot of people, and that's retirement. A lot of companies offer retirement benefits, but usually it's on us to figure out how to navigate them and how to take advantage of them. So what should folks know about how retirement benefits work?

[00:20:38] Tom Gilmour The first thing to know is, if your company offers a match, you should definitely be taking advantage of that. That's free money that's out there for you. Beyond that, you want to make sure that when you enroll in your retirement plan, you are thinking about your investments.

Typically when you're younger, it's a time where you can take more risk. And then as you get older, you become less and less risky. So if your salary is going up at your new job, it's a good time to increase your contribution, maybe by a percentage point or two. This does two things. It not only helps you get to your goals faster, but also you won't miss that money because you're just getting a raise. So that extra percentage point or two, that's maybe going into your 401(k) or to your college education plan, and you're not really feeling that. And it allows you to keep your level of spending on a consistent level, which is something that economists call “consumption smoothing.”

[00:21:29] Jennifer Borget Okay. So it's not necessarily a “set it and forget it” thing (like some of us hope that it is) but maybe always evolving, checking in, making adjustments.

[00:21:39] Tom Gilmour And those pay increases are good times to say, “Hey, this is the time to check in.”

[00:21:43] Jennifer Borget It totally makes sense. So for our listener who's maybe switching jobs often, maybe they're going for those pay increases. Are there different things that they should be keeping in mind?

[00:21:51] Tom Gilmour Yeah. When it comes to retirement accounts, I think one of the first things with the job change you need to think about is what to do with the old accounts. There's a couple things you can do: You can keep them where they are. You can roll them into the new employer's plan. Or you can enroll them into an individual IRA account.

The pros of leaving them where they are is it's easy, right? You could just leave it there and forget it. Maybe you already like the investments that the previous plan offers. And so you're happy to leave it there.

Some of the cons, though—especially if you're changing jobs multiple times, it becomes hard to keep track of all of these multiple accounts.

[00:22:25] Jennifer Borget So talking a little bit more about retirement, you're talking about these different accounts and keeping track of it. What retirement savings options beyond work.

[00:22:35] Tom Gilmour A 401(k) is a great tool to save for retirement because it's offered through our employers typically, and it's easy. But when you get to retirement, things are going to look a little bit different. So there's a number of things that you're going to have to manage in retirement.

You have taxes. And so by minimizing the impact of taxes, you're able to keep more of what you've saved.

You have inflation. So, as the cost of things goes up over time (and, you know, you think people are retired for 20 or 30 years), the cost of inflation and the impact of inflation is going to be big.

You have market volatility, right? So the stock market is going up and down. And you're trying to withdraw money at the same time and produce an income.

And then you have longevity. None of us knows how long we're going to live. Maybe our retirement is short. Maybe we live to be 90 or 100 years old.

So, you have to think about these things when you get to retirement. Just like you diversify your investments today, you want to diversify the different sources of income that you have in retirement.

So we start with taxes. Particularly when you're younger and you're in a lower tax bracket, the money that goes into your Roth IRA goes in after taxes. But when you pull the money out in retirement, it's tax free.

Inflation's fairly easy. You want to make sure that you have certain investments that are going to keep pace with inflation. And these are typically stock investments that are in the market. But the flip side of that is the market volatility. Stocks tend to be more volatile. So, at the same time, you're going to want to have investments that that are stable and you can draw on in times when the market is down.

And that last blind spot: longevity. Last year, Northwestern Mutual did a study on retirement and found that most people expect to live to age 81. But in reality, if you and your spouse both reach retirement at age 65, there's actually a 50 percent chance that one of you will live to 92 and a 10 percent chance that one of you will live to 100. So you want to make sure that you are planning to not outlive your money. And that's something else our advisors can help with.

[00:24:54] Jennifer Borget What's another retirement benefit that people don't often think of?

[00:24:58] Tom Gilmour Some employers will offer what's called an HSA account; that stands for Health Savings Account. And people think of it as a tool to pay for their medical expenses, which it is. The money that you put in the HSA does not have to be spent in the year that you put the money in. And there's some huge tax advantages to an HSA. You get a tax deduction for putting the money into the account. You don't pay taxes as the money grows. And then when you pull the money out, whenever you pull the money out, you're not paying taxes on that as long as you're using it to cover health expenses. So if you're able to save a little bit of extra money in your HSA and let that grow until retirement, it can become a source of income for you in retirement to cover health care expenses. And as we know, as we age, our health care expenses go up. So, it's a great source of tax-free income in retirement.

[00:25:49] Jennifer Borget So I know retirement's clearly a big financial consideration. But one thing that I often see that should get equal weight that's often missed is what to do about insurance. So we have insurance through our employer, and I'm guessing many listeners probably get life and disability insurance through their work, and maybe they don't give it a lot of thought. So let's talk about that.

[00:26:13] Tom Gilmour Yeah. So let's start with life insurance. There's a couple of considerations when it comes to life insurance. First is how much do you need? Typically an employer-sponsored plan is going to be some multiple of your salary—one times salary, two times salary. And that, typically for most people, is not going to be enough. The rule of thumb is you should have about 10 times your salary.

The other common misconception that that people have about group plans at work is that they're more affordable than, you know, insurance on open market. And that's not always the case, particularly if you're healthier. You may be able to get a better rate than what your group got because of your health status. So, it's important to shop around and see if that's the case for you.

And then the other thing is there's something that our industry calls “portability.” That means when you leave your job, can you take your insurance policy with you. Some plans, it's portable, you can take it with you, and other plans, it's not. So that's an important consideration. Let's say, for example, you become sick, and it’s some long-term illness, and you have to stop working. And you leave your job, you’re home sick, and this might be the time when you most need life insurance. But you've lost that insurance policy because you couldn't take it with you.

You know, that's a reason why I would always recommend that people carry a certain amount of personal insurance that they own rather than, you know, a company policy that that might not go with them.

Disability insurance, you know, that's it's a little bit different. Typically what disability insurance does is, you know, if you become sick or injured and you can't work for a period of time, it's going to pay you a monthly benefit. Most group plans have monthly benefits somewhere around 60 percent of your salary. And then taxes is another consideration; if you are paying for your premiums for the group disability insurance out of pocket, with after-tax money, if you become sick or injured, that benefit is going to come to you tax free. But if your employer's especially generous and they're paying the premiums on your behalf, when you receive that benefit, it's taxable to you. So that further cuts into that 60 percent. So, you know, definitely enroll in your group plan, but you also want to think about what your plan would be in case you became disabled and how you would make up the difference in income.

[00:28:40] Jennifer Borget So can you tell me about the value of speaking to an advisor? And you've mentioned this. You know, you can have someone sit down and talk to you and figure this stuff out. And you've mentioned a lot of different things, which can be overwhelming.

[00:28:50] Tom Gilmour Our advisors work with folks every day on topics just like this. Whether it's changing your job, getting married, buying a new home, having kids … or maybe you just want a second opinion to make sure you know what you're doing financially is the right thing. Our advisors will get to know you. They'll ask the right questions and help uncover the things that are most important to you. And one of the really important things that our advisors can help with is uncovering those blind spots, things that you didn't even know you should be thinking about. So, ultimately, what our advisors can do is build you a plan that's going to give you confidence that you're on the right track to reach your goals.

[00:29:30] Jennifer Borget Wow. What a great way to kick off A Better Way to Money. I hope you enjoyed our first episode as much as I did.

I wanted to share a few of my key takeaways from this episode. First, managers are looking for the three Cs. Gorick shared his framework of the three Cs: competence, commitment, and compatibility. You need to demonstrate all three when entering salary or title negotiations. I think it's such a great system for measuring your performance, understanding when and how to sit down with your manager, and for identifying when you may be ready for a change.

Second, think long term. While moving jobs is an effective way to increase your salary, Gorick says to weigh your options carefully before deciding to move positions, and ask yourself if your short term decisions are going to get you where you want to be long term.

And finally, this is an opportunity to look at your financial situation more broadly. Tom brought a lot of ideas to think about when it comes to how a new job can impact your money overall. This is definitely an opportunity to take a step back and make sure you're taking the right steps with your money for today and the future.

Thank you for tuning in to this episode of A Better Way to Money. If you enjoyed this episode, I'd love it if you left a rating and a review. It's the best way you can support the show. You can also follow or subscribe to the podcast on your preferred platform so you never miss an episode.

For more resources to help you navigate a job change, check out Northwesternmutual.com/podcast. Our episode page includes a downloadable checklist and other resources that go into more detail on many of the topics we covered today. See you next time!