Salary Negotiations – Hedge Fund Jobs

If there’s one thing that makes people uncomfortable, it’s setting a value for what they think their skills are worth, and negotiating compensation with a new employer. In the hedge fund world, this task is even tougher given the wide range of jobs and salaries in the industry. Nevertheless, there are a number of principles that can help you do a better job at it.

First, welcome the process. If you have made it through rounds of interviews with various people throughout the firm, possibly even a presentation or case study or two, and are still seated in front of an interviewer, then you know they are interested in you. Employers want quality employees, so they expect you to know what you’re worth and to negotiate for it.

There are two critical steps you must take during the interview process. First, nearly every expert suggests avoiding any discussion of salary or compensation. By all means, don’t be the first to bring it up. If the person across the desk mentions it, deflect the topic with a polite, “we can work out the details of compensation at a later date.” Or “I’m sure my compensation package will be within the accepted range for someone with my skills and experience.” Avoid the topic entirely for now.

Whoever mentions a salary range first loses, in a sense, because they have set a firm stake in the ground that will be more difficult to move from. If you aim too high, you could disqualify yourself from the running. Aim too low, and you devalue your worth to the firm or open the door for a “low-ball” offer.

Next, you must do your research. Check out various online sources such as Job Search Digest’s annual Hedge Fund Job Compensation Survey. Take a look at the many hedge fund job listings on our site and compare salaries for jobs similar to the one you’re applying for. Create a range of salaries that represent: 1) what you’d really like to earn; 2) what you’d settle for; 3) the least amount you’d be willing to accept. Back this range up with data from job listings for people with similar skills and experience to yours.

Wait until they give you a firm offer to begin your negotiations. And above all, never, ever accept the first offer you are given. Recruiters suggest you thank them for the offer, express enthusiasm for the job and the firm and how much you’d like to work there, and ask for a few days to think it over. Most firms will gladly agree. 

This gives you time to build a case for your compensation package. If you have specific skills that you’ve acquired, a successful investment track record, awards or recognitions, experience with “brand name” schools or employers, or some extra edge or unique ability such as sales, asset gathering, IT skills, or quantitative modeling, then you can build a strong case for a higher salary range.

Next time, we’ll look at how to add value to your compensation package without discussing salary.

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