Negotiating Your Salary During A Recession.
My dear neighbor, Jerry used to tell me at least once a month that “I just need to win the lottery…if I could just win the lottery, I would be so done.” He’d go on and on about all the things that he would accomplish, places he’d go, and the things he would buy. So, for Christmas this past year, I bought Jerry a lottery ticket. He was very appreciative, and then said “you know Jim, I always thought the tickets someone bought were more like a ticket, and not a piece of paper.” It struck me then that Jerry was set on winning the lottery without ever playing. Same goes for compensation negotiations. Salary negotiation is an important component of any successful job search. In this economy you may feel that the initial salary offer is a “my way or highway” proposition or that asking for more can make you seem greedy and or selfish.
Negotiating salary is a process, and employers expect to negotiate. You can actually hurt yourself by not negotiating because the employer may begin to question your level of professional business acumen. Now, the goal is not to win, but to arrive at a mutually agreeable outcome. Use these tips in your negotiations.
The foundation for any negotiations is built upon knowing what you want, how to ask for it, and what alternatives you will accept. When you approach negotiations with factual information, and a firm understanding of what you need, common ground upon what is beneficial for all concerned will be easier to find.
Being prepared is a key component in driving successful negotiations. You need to calculate and develop a clear idea of what your minimum requirements are. You need to know how much you need to make on a monthly basis in order to keep and support your family’s lifestyle as well as being able to meet your longer term financial goals.
You want to get an unambiguous idea of both the total monthly number as well as the components along with having a cost figure assigned to each. This amount becomes your “last, best, and final”, the minimum salary that you can accept. From your research you should also develop a target number, the total package cash value of salary and benefits you are aiming for.
Research salaries and benefits for the types of jobs you are interested in as well as company specific salary and benefits information. You can research salaries for the career field as well as the geographic areas you’re interested in. You can begin you research by going here and utilizing the PayScale widget on the right hand side of the page.
You should also calculate your market value. This indicates where you are compared to others in your field. Most of the PayScale type tools will define a min, mid, and max of salary the salary range for the job you want. The lower you are in the range, the more room you have to potentially negotiate, and the higher, the less room you have. Keep in mind that many companies view candidates in the 85% to 100% range as virtually the same. The theory is that once on board at a higher point in the range, it become hard to provide the employee increases beyond the normal merit budget which can lead to retention issues.
There are other factors including: geography, industry, business maturity, and company size that can effect the determination of your worth. You are worth different amounts in different markets. And, you may be worth more to one company than you are to another. This further emphasizes how important doing your homework and being flexible will be.
Have the offer before you negotiate. You should have the information I described above before you interview. During the interview it is important to talk about the job and your value before you discuss salary. The time to discuss your salary is after the job has been defined and you are certain that you have described your value to the employer. If the interviewer begins discussing salary, simply say that you are flexible depending upon a more complete understanding of the job. The tactic is to move the conversation to the job and the value you bring to the company. It is helpful to role play this as you would also do for interview preparation.
So the employer brings up compensation. Now what? Don’t panic. You now have a firm starting point that you can be assured of. Your first response is to repeat the amount of the offer and then remain silent. The golden pause. While uncomfortable, you are sending a message that you are thinking about the offer. They too may be uncomfortable, and may “bump” the offer to ease their own level of discomfort. Whatever you do, don’t jump at the first offer. People, as well as employers value what they have to work to get, and you want them to work to get you. It is best to close off the discussion at this point by saying that you very much appreciate the offer, but that you’ll need a few hours or a day if possible to digest all of it.
Now pull out your research and evaluate the total compensation package including the benefits that are being offered. If you have been thorough the steps outlined above you’ll be able to define the dollar amount of those benefits in addition to the base salary for a total compensation amount.
Evaluating the offer, taking into account the value of medical, life, dental, vision, vacation, leaves of absence 401(k) plans, tuition reimbursement, employee assistance programs, relocation packages, and stock options. If the starting salary is not acceptable, are there sign-on or annual bonuses, accelerated performance review opportunities and raises that might be available to close the deal?
It is now time to share your research for starting salary range and to align it with your value. Be certain that your requested salary is within the local market value for your profession, and to show your facts and figures. If you can’t have justify your request and position, don’t. Try this: “Based on what others in this role are making at similar companies, the 10 years of experience I bring along with the value proposition for your company, I believe your offer is on the conservative side.” Compare your research with your offer regarding the min, mid, and max discussed above. Make the case for your value and record being a good return on investment for previous employers. If you have other offers, you have leverage. Draw attention to it, but do not dwell on it.
Be mindful that employers view compensation data differently than you. Two points employers often raise about research are the sources used to obtain the data, and whether the data matches your job profile, the company profile, and the geographical location. Have answers to both ready.
While you have certainly done this during the interview(s) have ready a list of what you have to offer in terms of your value. Describe your accomplishments and quantify your successes in terms of cost savings, increased productivity and overall contribution to the company. If you earned performance bonuses or incentive awards, mention those so that you’ll be strengthening your value proposition. Be prepared to trade. Decide which issues of compensation are most important to you. Vacation time may be important, while tuition reimbursement may not. Expect to make trade-offs.
Don’t negotiate against yourself. Once you’ve made your proposal shut up. Wait for a response and do not say something just to fill what you perceive as an uncomfortable moment. Be ready to make a concession, and do not concede unless you get something in return. Negotiate in a respectful manner. You can do this most effectively bu paraphrasing, pressing for specifics, and testing for understanding. It is important for the other party to feel that you have heard them, and so utilizing strong listening skills is a must. Negotiating and being confrontational need not go hand-in-hand. This person you are negotiating with could be your new boss or someone in the organization that has influence. Don’t confuse negotiating with being stubborn and unyielding. You can be pleasant and cordial, and still ask for difficult things. Further, in doing so, you demonstrate a key business skill that makes you an even more valuable.
Negotiating salary is filled with ups, downs and doubts. Don’t turn tail if an employer doesn’t immediately meet your expectations. Studies show that the individual who perseveres and manages uncertainty does much better than those individuals who concede quickly.
Now, get the offer in writing. Once you’ve agreed on terms, ask your new employer to write a formal letter offering you employment that outlines the specifics of what has been agreed to.
Lastly, relax and be reasonable…just like me.