Act Your Wage, with John Gates

Pay negotiation expert John Gates, author of “Act Your Wage”, shares proven salary negotiation strategies to help professionals increase compensation by 10–20% without risk or confrontation. Drawing on decades of experience as a recruiter, Gates explains why most candidates leave money on the table, how to overcome negotiation anxiety, and how to shift the power dynamic by using salary ranges, asking strategic questions, and understanding compensation structures like bonuses and incentives. He also highlights common mistakes that cost job seekers, reveals how high-stakes negotiations evolve at different career levels, and provides actionable advice for both external job offers and internal promotions.

About John:

John Gates is an author and founder of Salary Coach, where he helps C-suite executives and senior leaders negotiate higher compensation packages without risking their job offers or future relationships.

As a former Head of Global Recruiting for multiple Fortune companies, he now owns two businesses: Salary Coach, where he helps salaried job-seekers to maximize their next compensation package using low-risk, high-reward techniques and insider secrets, and Recruiting Transformations, where he helps manufacturing and service companies to diagnose and fix their persistent recruiting problems, slashing headhunter dependency and time-to-fill by 50%+ and delivering big gains in quality-of-hire.

He also offers Salary Coach Academy, which is a monthly subscription that gives access to recorded lessons to develop your pay negotiation skills at every step of the process. This Academy has allowed members to quickly learn insider secrets and advocate for themselves with more confidence and strength.

Over the course of his career, he has also been a speaker at conferences, associations, business expos, and career-related podcasts to discuss practical pay negotiation tips, tactics, and techniques and how to attract top talent for manufacturing and service companies, and has written an international best-selling book on salary negotiation called Act Your Wage, plus numerous articles, VLOGS, and commentary on the job market, negotiation skills, recruiting process, and HR technology.

Learn more at Salary.coach.

The Action Catalyst is presented by the Southwestern Family of Companies. With each episode, the podcast features some of the nation’s top thought leaders and experts, sharing meaningful tips and advice. Learn more at TheActionCatalyst.com, subscribe below or wherever you listen to podcasts, and be sure to leave a rating and review!

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(Transcribed using A.I. / May include errors):

Host
John Gates is a pay negotiation coach, author, and speaker, whose book, Act Your Wage, helps readers earn 10 to 20% more in their pay packages, while avoiding risk and confrontation. John, that sounds like advice everyone would want to hear. Welcome to the show.

John Gates
Thanks so much for inviting me. I’m grateful to be here. Yeah, it’s strangely hard to get the information that you need to learn how to negotiate your pay. It shouldn’t be hard, so I’m glad that we’re here, and we can talk some about that today.

Host
I know that your journey in this particular area kind of started when you had a sudden job loss that led to a lower paying role. Then the turning point came during your own salary negotiation for another role soon after that.

John Gates
Yeah, it most people that are interviewing for a job do feel that the balance of power is not with them most of the time, unless you’re going into a negotiation with multiple offers in your hand. You really feel like, wow, I’m a beginner at this, I don’t have the experience that the other person has that I’m talking to, because most of the time you’re talking with somebody like me, you know, I’ve been a career recruiter. I started recruiting in 1990 so I’ve been doing it a long time, and I might extend five, six offers a week, and so I’m doing that on the regular, and also with somebody else’s money. So when it’s you and you’re on the other side of that negotiating table, and you’re squaring off with somebody like me. It’s very natural to feel like there’s an imbalance of power there, but as a recruiter, I was interviewing with Capital One Financial in the late 1990s to be a leader in their IT recruiting function just before the yk switch, and everyone thought all those systems might just stop working, so everyone was trying to recruit these folks, and it was a matter of survival for businesses and government agencies and everyone else. So they wanted to hire me to come in and help with their IT recruiting function. So I flew out there, and I discovered in the process that Capital One had the worst, most difficult selection process I’ve ever seen anywhere, had 23 or four behavioral competencies that you had to interview through. So they would ask interview questions around each one of these two or three questions each, and if you failed even one of those competencies, you didn’t have it, you were not going to get an offer. And then I had to take three written tests, you know, basically IQ, mental horsepower, logic and reasoning processing sort of tests. And then after that, there was a business case interview with an experienced interviewer comes in and poses a question, gives you a whiteboard marker, and tells you to go draw, draw the solution on the board, and so there’s real time math calculations and discussions, and how are we going to, what recommendation are you going to have in the middle of this problem as a result of your calculations, and if you fail that, you’re not getting an offer, so they wanted the top 10% of their interviewees to become employees, 90% or more of people who interviewed were not getting offers, and it was that way by design, so I realized right away, if I was going to recruit there, I would have to interview, bring 10 people in to interview just to get one offer out the door. It wasn’t going to be fun, but it was very, very challenging. Anyway, at the end of that process, I’m sitting in a conference room, kind of wiping the blood off myself. And then in comes the recruiter, and he sat down across from me in the table, and he said, John, I’m just going to level with you here. We’ve interviewed over 20 people for this position, only two have passed the process, and the other guy just withdrew. What’s it going to take for you to say yes and move your family from Portland, Oregon to Richmond, Virginia? And that was the most transparent I have seen a recruiter operate since that day, and so. I said, well, okay. How about this? Let’s prove the base salary to x. Let’s move the incentive target up. That turned into like 40% of your of your annual pay package. I asked for an improved relocation plan, because I just bought my first house in Portland and wanted some help in selling that and buying a new house. And so the answer was yes, yes, yes, yes, and yes, and I got back on the plane, and I went home, and I celebrated with my family, and I worked for Capital One for the next three and a half years, and every single day I wondered how much money I just left on the table, was there more, could I have gotten more easily just by asking for more, and so as I started tracking how much my candidates were leaving on the table, and it was a surprising amount of money to shortcut the offer process. I actually set a goal at Capital One, and it continued throughout the years to replace my annual salary every month with negotiation savings on the other side of the table.

Host
You specialize in high stakes negotiations, what exactly defines a high stakes negotiation as opposed to another? What draws that line?

John Gates
Well, I think that’s a really good question, and the answer is there isn’t, because for everyone pay negotiation is high stakes, it’s higher stakes than anything you can imagine, which is why most people don’t negotiate at all. I realized that 80% of people that I extended offers to never even tried to negotiate. They are all high stakes, but the potential to negotiate more for yourself goes astronomically higher when you rise up in the organization structure, it’s very likely that somebody in the C suite would leave six figures on the table and not even know they’ve just done that. People like me are very good at convincing you that you just got a really, really sweet offer. Meanwhile, there’s $228,000 that you could have asked for sitting there, but since I didn’t have to give it to you, I don’t, and businesses do that frequently. Once there’s only one of you in an organization, there’s a lot more elbow room in things like base salary, incentive plans can be one off while you’re deeper in the organization structure, and there are a few people doing similar work to you, or maybe even a whole team doing similar work to you. The HR team has to compare salaries across that band, and that then becomes a limiter on what can be offered in salary. Incentive plans tend to be more standardized for people who are one of many. If they’re, if you’re one of one, if you’re the head of a function or higher than that, there’s a lot of room to maneuver. It just depends on how much value you represent to the employer.

Host
Before the negotiation really even starts, people may be having some anxiety. You mentioned that imbalance of power. Is there anything we can do in advance to try to settle that?

John Gates
Oh my gosh, I love this question. At least half of what I do as a coach is anxiety management, and that’s perfectly normal. If you feel that in that moment, that is normal, but having a coach in your corner that’s telling you it’s normal and it’s okay, this is how that’s likely going to play out. Understanding how it’s not as risky as you think it is to ask it in this particular way, that’s what calms the nerves, really. If you show up very anxious, the fear of loss is what drives you into this behavior of low balling yourself. The anxiety you just want to be done with that. Your dream job calls you, and it’s like ring, ring, ring, everything you’ve always dreamed of. But first, what’s your pay expectation immediately? Like, if you’re listening to this now and that happened to you, you’d probably think, oh no, I really want to interview for this. I want to meet the hiring manager, I want to get past this screener. What can I tell him or her? How do I answer that question in order to get past this person, so that I have a shot at this job? And the same thing happens at offer stage, you get a job offer after a long job search, your income needs to be restored. You just want all that to go away. So, I’ll tell you exactly what you should say. The phone rings, and then they ask you that question, what’s your, what’s your pay expectation? What I tell my clients is that questions about pay structure, about how the pay program works, all that are routine, normal, everyday questions for the screener on the other end of the phone. They make a living out of calling people and talking to them about opportunities. Those questions come at them many times a week. Work, and don’t actually, they feel risky to the person that’s looking for work, who is in a vulnerable position, but they really aren’t. So, if you know this, then it just becomes a little bit easier to ask questions, and if you ask those questions in the right tone and in the right way, then you’re going to get through the conversation just fine, armed with a lot more information, so when they come at you with that question, What’s your pay expectation for this role? A lot of people will give a number at this point, and that’s a big mistake. The problem is, if it’s too much, they’ll say thanks, but no thanks, they might not even tell you it’s too much, they’ll finish the screen, and you didn’t check the affordability box, so you just don’t move forward, and you don’t know why, but let’s just say they say yes. I think we can make that work, and you move forward. What happens if you just left 50k on the table by approaching it that way? So the correct answer early on is to use a range and not a number, and that keeps things safe for you. It maximizes the chances that you’re going to satisfy this person and move through that person and meet the hiring team. And so here’s the precise script, so when they ask you the question, you can say, you know what, I’m so glad that you asked that question, because I want to have a really transparent conversation with you about the compensation and the opportunity. So, I’m grateful that you asked me that. But first, before I answer, can you tell me what your budget is for the position? And then you have to be quiet for about eight seconds. You know, too long is too long, but tolerate the silence after the tough question, because people will naturally try to fill that void with their voice. If you get to the end of seven or eight seconds and it’s really starting to feel uncomfortable, and you see that they’re processing, you can reset the timer just by saying, you know, I just want to ballpark. I’d like to understand what the, what the ballpark pay structure is. Resets the timer, and usually they’re going to respond with some sort of range. And then you can and should ask, is that salary only, or are there incentives in addition to that? And this opens up a collaboration discussion about, you know, you’re discovering how their compensation structure works, because very often people get over fixated on what the salary is, and they don’t even think about the incentives until they’re at the end. If there are incentives, they can say, well, there are incentives in addition, then you can ask, what do those look like? How is that structured? Is there stock? Is there an annual incentive? Is there a commission structure? How is, you know, how much is that worth? And then you kind of do the math, and so if they gave you 175 to 220 and that includes incentives, then just for the sake of argument, you can say, well, that’s really good, because the range that I’m discussing with other companies for similar positions is high ones to mid twos, and so what I did there is I took their range and I put my range to kind of overlapped it, but you should always have the top of your range above the top of theirs, and here’s why. Most people are never going to tell you what the true top of their range is. So, if 220 is the top of their range, it’s very likely that they could offer you 245 and still be within their range. They just don’t want you to know they can do that.

Host
Let’s say you’ve got an offer, and let’s say you think it’s a good offer. Obviously, we know from everything you’ve said you could still be leaving money on the table, but how do you know when not to push? How do you know when you’re done?

John Gates
Yeah, I think that the important thing here is to say most people think that negotiation is like this really high risk game of chicken where they’re going to throw some numbers at you and then you’re going to say no, how about this, and then it goes back and forth until you get to a point where there’s an impasse and then someone has to make, you know, somebody has to say chicken, but that’s not how it goes, that’s not how it should go, that’s the very high risk path. So we want the best offer that they can make without putting the offer at risk. You can push it beyond that and maybe get something, but you don’t want to damage a relationship either on the way in. You want all the money they would be happy to give you, and two days after you start, they’ll forget that they gave you that much. How do you know when you’re done? It’s a collaboration process that’s an offer. Negotiation should be a collaboration and a discussion with people, series of what if scenarios and backs and forths, and then you have to use your. Tuition, some, if they start firming up on things, and they say absolutely not one penny more in the base salary, then you know you’ve probably reached the max that the base salary can be, and you have to negotiate on other fronts. If there’s still a gap, there are a lot of mistakes people make. Sometimes they will move the goal posts where somebody will agree to some big concession, and you have to run it up the flagpole to internal approvers, sometimes very senior people, and they finally say, well, okay, I guess if you really need that person that badly, you can have this, and you go back and you say, good news, who got what you wanted? Here it is. And then they say, okay, now, how about this as well? That style of negotiating is a real big mistake. They’ll say, you don’t seem to be serious about this opportunity. Goodbye. And there are a couple of things that get offers rescinded. That’s one of them. I’ll go ahead and mention the other one right now, and that’s changing your personality when it comes to negotiating. So, if you interviewed and you’re Johnny nice guy during the interview process, and they really like you, and they see you fitting within the team and the culture and everything, and you’re the problem solver that they need, and then they extend the offer, and then during the negotiation, you are a very different person. Now I’m second guessing this hiring decision, so it’s really important as you move into the negotiation process that you’ve, that you find the words and the style that fit your own natural personality and maintain it as a collaboration, that’s my advice.

Host
How is all this different for a what we’ll call an internal negotiation, let’s say moving up to a different position in the same company, but you’re doing a new negotiation?

John Gates
Yeah, love that question. So, this question came to me, actually from Business Insider, not too long ago. I had a reporter call me up and say, ‘Hey, John, let’s talk about Elon Musk’s negotiation strategy with Tesla. The same situation, but with a very different person. You know, Elon Musk is going to the Tesla board saying, ‘I want a $1 trillion dollar pay package, and if you don’t give it to me, I’m going to walk. And so the question was, should the average person use that strategy? My response was, well, the average person’s not Elon Musk. He has a unique set of leverage that he can pull. He’s a unique rainmaker. They can’t go and get another Elon Musk, so that’s going to work for him, but shouldn’t be what you do for a current employer. But when you’re working for a company now, you are in the HR ecosystem, and that, depending on the company, can be really limiting. They’ll have policies about, let’s say, they’re going to promote you one or two grades. The policy says we can’t give you more than 7% per grade, or something like that. Even if the market will be 40% there’s kind of this old joke in the HR team that says you would be better off to leave the company and come back than to try to move up, and this is why people been with the same company 15 or 20 years are very often behind the market, and they don’t know that they’re behind the market until the phone starts ringing, and they get these crazy offers, and this is one of the ways it’s different, is that you have to navigate within the HR structure. Now you can engage HR as your ally in this process, depending on the situation. So, let’s let’s just say you want to get a raise, and you’ve been working with your boss to expand the scope of your job, you’re taking on more responsibilities, and so on. And at some point, you get to that spot where the job you used to be doing is no longer the job you’re doing, you go to HR and you say, “Here’s my old job description, here’s my new job description. Can we regrade this? What’s what should be the appropriate pay grade for this new set of responsibilities? And then HR can do that process and say, “Well, it looks like you’re at three grades higher now, you get a raise as a just the system will give you a raise, but I’ll say, like, if that’s not the case, and you’re just working with your boss, or you’re, you’re transferring into another group for a job that’s higher, and so on. A lot of people think they just have to take the offer that comes. No, you don’t have to do that. You can, you have choices, just like Elon Musk could decide. Well, I could leave Tesla and go to SpaceX or X, or I could start a whole new business. Like, Elon Musk has options, and you can say, “Well, I appreciate that opportunity. I think I’d really slay that dragon. But I need to have a better financial opportunity, or it might be more advantageous for me just to consider other opportunities. What can we do to improve this? So you have to, you have to test the limits in a safe way, but you can’t do that if you don’t have options. The best talent always has options. It’s very difficult to have this conversation with your boss or with a potential future boss in a company that you already work with, because you don’t want to be labeled as high maintenance or any of these kind of things. So you want to raise, you think you’ve earned that, you’ve really outperforming everything. Your job has grown, etc. You go into your boss’s office and say, “You know, over the last three months, I’ve had four calls from headhunters, and I want to tell you, the money they’re throwing at me is kind of surprising. I didn’t realize that my value in the market was like that. Right now, though, I’m hanging up on them. I’m not even talking to them, but this has become a distraction for me. So, what can you do to help me continue to hang up the phone on these people? And so, you’re not what you’re not doing is bringing a job offer into your boss’s office and saying you need to match this, or I walk. That makes it feel like your loyalty to them and to the company, is not what it should be. In order to get the cherry opportunities, the real great projects, the high-impact work that’s going to create bigger pay for you long term. In order to get that, you, they have to believe that you’re going to be there long term. But I’ll go back, like the easiest raise you’ll ever get is the one that you get on the way into a new company?

Host
Where are people more likely to lose an offer or have everything fall apart? Is it in the beginning, and they just blow it right off the bat, or is it later in the negotiation? Where do things typically come off the rails?

John Gates
I would say it’s more likely to happen at the beginning, they’re more likely to lowball themselves or miss an opportunity to negotiate early on in the in the pay cycle, even in the application phase. So, when you apply to a job, the applicant tracking system will often ask you the pay question. Some people will put in negotiable or $1 or some non answer into that box, so here’s the picture I want to paint for you, and why that’s a mistake. When I was young person, that was the advice I got. People would say I’m negotiable on that front, or let’s talk about that later, or something like that, that’s a mistake, because recruiters are corporate recruiters, are overwhelmed with volume, they have a huge workload, they’re chronically understaffed, and so somebody like me might be responsible for 30 to 40 open positions that we’re working at any given time, you fill five of them, five more come, and that’s just the hamster wheel that we are on. So, if there’s 400 applicants for a job, and I look at 400 resumes, and a bunch of them are qualified on paper, it looks like I should spend some time with them. I’m so short on time managing 30 to 40 open positions, I don’t have time to phone screen everybody who might be a fit, so that’s a major screening criteria. If I have 15 people that fit, only five look like they are for sure going to fall into the pay range that I might have in mind. I’m not going to waste 30 minutes of time with the other 10. Now, this isn’t always the case. You might be the only one that fits, and if that’s the case, then negotiable is a legit strategy. I will call you anyway, and we’ll work it out, but I wouldn’t take that risk at that point. That is a mistake. So, what you need to do is put a number in that box, that will get the phone call, and then when you’re on the phone call, shift into your range. You have that one opportunity to do that. And by the way, if you don’t do that, if you don’t shift into a range, they’ll just assume that they can hire you for that number that you put into that box. It happens all the time. You put in $100,000 in that box, and guess what, the offer is going to be at the end, probably that no matter how strong you were in the interview process. So give that range, and then during the interview process, convince them that you are high value. That’s the formula for getting a much stronger offer at the end.

Host
That’s great advice, John. Thank you so much for being so generous with your time today, that’s all fabulous advice.

John Gates
Sure, thank you. This was fun. It was so much fun. I appreciate it. I hope it helps somebody. This is a nerve-wracking process, and I’m here to help if there’s anybody that needs that help. This is a skill you can learn. It really is. And once you learn this, it’s going to pay. You big big time throughout your professional career, so I hope it’s a skill that folks decide that they’re going to invest in and learn.