Negotiating ... part art, part science
The process of negotiation really begins with the very first step of your application for the job. At each point of contact, you have an opportunity to establish your credibility and to demonstrate the value you add to the organization as well as your fit to the position. Successful negotiation depends on your preparation…knowing what the job is worth in the job market and how aligned your skills, experience and values are with the new organization.
Traditionally, it has been acceptable practice to never discuss salary until you have been offered the job. This rule holds true in today’s marketplace as well for most positions. Although, in some cases, recruiters may screen candidates early on and require that they provide salary requirements or salary history to move forward in the application process. Here, you can ask for the salary range although it may not be revealed. At this point you will need to decide the extent to which you’ll need to negotiate.
If you are working with a recruiter,
it is very important that you talk to your recruiter about what you are willing to accept in a job offer. Since your recruiter
is acting as your agent in the placement process, they will be working with their client on your behalf regarding the terms
and conditions of your employment. As such, your negotiations will channel through your recruiter and they will act as an
advisor to you in the negotiation process.
If you are not working with a recruiter, you’ll need to calculate what you’re willing to accept in terms of a salary range and total compensation package. Total compensation package is the sum total of all benefits, monetary and otherwise, an employee receives from a company.
Keep in mind, employers respond to what the market indicates someone with your qualifications is worth, not based on your needs as a candidate.
The first step will be to decide if you want to negotiate, and if so, you’ll need to plan your strategy. Some questions that you’ll need to ask yourself are: 1) Is negotiation appropriate under the circumstances? 2) If so, what do I negotiate?
Be sure you understand the complete offer before you consider negotiating. Start by focusing on the relative value of the total compensation package, not its individual components. You also need to consider factors that relate to overall working conditions. Things that contribute to your overall quality of work life, such as commute distance, flexible work hours, a nice work environment, your perception of the job itself, and even job title all have merit when considering a job offer.
Let’s start with the issue of whether negotiation is appropriate. Here are some of the things you need to ponder when answering this question.
Generally, the higher the level of the position, the more likely that negotiation is an accepted practice. There are no hard and fast rules, however. As such, you need to be realistic in your approach and try to read the reaction of the hiring person to any counteroffers you might present.
If you have several job offers pending, you might feel somewhat emboldened in your negotiation strategy. On the other hand, if you have been unemployed with few opportunities coming your way, you will tend to be much more accepting of the initial offer. Knowledge of standard practices and compensation packages for the type of job you are applying for can help you decide if negotiation makes sense in a particular situation.
If you decide to negotiate, take the following steps:
1. Prepare in Advance
Prior to being called in for the interview, you should take some time to research going rates for compensation and benefits in your field. In this regard, you must factor in such issues as how packages offered by larger organizations may differ from those offered by smaller organizations, what impact a strong vs. weak economy might have on the employer's flexibility, and how well the employer’s business is doing financially. Much of this information is readily available on the Internet. Salary.com is a great resource.
Start your research by visiting the company’s home page on the Internet. It is always good to know about the company you are considering for employment. You might be able to find out information about what they offer in terms of benefits and perks from the employment portion of their website. For additional information, stock market investment sites frequently have free research available on company background and performance. Many job search sites can help you calculate going rates of pay for various job categories. Hoovers.com is a valuable resource.
All of this information will help you understand whether a job offer is within the ballpark of acceptability. It will also prepare you to develop you negotiation strategy, including any counteroffer, based on facts instead of speculation.
2. Be Confident in Your Abilities and Negotiation Approach
If you don’t ask you don’t get! Don’t make the mistake of being shy or appearing weak during the negotiation process. You must be able to demonstrate your professional value to the organization. If the employer can readily see your value as a potential employee, you will have much greater impact in your negotiations.
You must also show a degree of confidence in you negotiation approach. When preparing for the negotiation process, practice how you would respond to various offer scenarios. In your practice exercises, remember that you are dealing with professionals who expect to be treated with dignity and respect. In most cases, they will not take offense to a counteroffer. However, you must present any counter offer in a professional and respectful manner. Be persuasive, but not demanding.
3. Negotiate a “Win/Win” Agreement
Be enthusiastic about the process, but remember your goal is to reach agreement on a job package that satisfies the interests of both parties (you and the employer). To do this, you must be sensitive to the response you get to a counteroffer. Look for clues about the employer’s reaction and adjust your position in an appropriate manner. Keep a relaxed atmosphere and do not become confrontational. Stay focused on the job and how you meet the qualifications, not your personal needs. Your negotiation power comes from your perceived worth in the new position and that is what the employer will hear.
In some cases, the human resources representative or hiring manager may not have the authority to negotiate. Some employers have a policy not to vary from standard offers. On the other hand, if the offer is simply not acceptable to you, you can always decline the job offer.
This can be one of the most challenging aspects of job acceptance. If you demand too much, the employer may move on to more affordable candidates. If you ask for or accept too little, you may be leaving a lot of money on the table.
The first thing you need to do is conduct a little research so you know what would be a reasonable salary expectation. A growing number of websites, such as Glassdoor, allow employees to anonymously post their annual compensation, and also provide an overview of salary ranges for positions within a given organization. Other sites, such as PayScale and Salary.com, aggregate pay data from a variety of market surveys.
As you ponder a salary negotiation strategy, consider things like your years of experience, going rates for your job title, your education, professional certifications, industry segment, market conditions, geography, and the like. Armed with this knowledge, you will be much better positioned to discuss and negotiate an appropriate salary. You'll find several links in the Tools/Links menu that will help you conduct appropriate research.
Another factor to consider is the size and type of organization you're dealing with. Quite often, larger organizations have fairly rigid hiring guidelines. As much as HR or the hiring manager might like to offer more money, they may not have the authority to do so. Smaller firms, on the other hand, may have more flexibility. If you are told that the hiring guidelines are fixed, you'll likely have to either accept the offer "as is" or move on to other opportunities.
As a general rule, don't be too anxious to discuss salary. It is usually advantageous to wait until the interviewer or hiring manager brings it up. This often occurs after they have decided to make you an offer. The reason you have more leverage at this time is that you will have convinced them you are the best candidate for the job. If they don't close the deal with you, they have to move on to their number two choice.
Unfortunately, you never know for sure when the topic of salary will come up. If it is earlier in the hiring process than you'd like, you may have to use some creativity to tactfully give yourself some "wiggle room" for negotiating. Also, as discussed below, there are other terms and conditions of employment worth considering; some of which may be negotiable.
Salary Negotiation Example
Let’s say you were making $73,000 at your last job. Based on your research of the job market, you now believe that your background and experience make you worth $77,500.
You pursue a job that is a good match with your skills, and find out during the interview process that the pay range for the job is $68,000 to $93,000. They make you an offer of $74,000. Your counteroffer may sound something like this:
I really want to work for (name of organization) because the position is a great match with my skills and experience, and I know that I can make a big contribution toward your success. Considering my experience and accomplishments, I feel that I am worth $80,000.
Making a counteroffer at this amount leaves room for the employer to raise the initial offer and for you to come down a little in hopes that the final offer will be in the area of the $77,500 you wanted.
When you make the counteroffer, be flexible and keep the negotiation open at all times. Do not be afraid of silence. If the response is a firm no, you will need to decide if there are some non-cash options you’ll want to negotiate. However, your willingness to settle should not prevent you from selling your background and experience a little more.
Lastly, when considering an offer, it is helpful to think of the offer in terms of "total compensation." Total compensation includes pay, benefits, working conditions, and any other characteristic of employment that may be of value to you. Sometimes, things that aren't directly associated with an employer can have significant value to you. For example, a short commute may be a highly valued consideration. Be sure you factor in all aspects (direct and indirect) of a job offer.
Under the Tools/Links menu, you'll find several resources that will help you research jobs, pay, and geographic cost of living indices.
Negotiating
Key Points