Salary Negotiation - June, 2008

Part 1

Salary negotiations can be overwhelming when you don’t know the market value of a new position. It can be somewhat intimidating unless you are prepared.  In the past, we used to accept whatever salary was offered for the position.  We never negotiated.  Why do we want to take ourselves through the process of negotiating now?  Well, most employers rarely offer the maximum compensation for a position initially.  The employer wants the best deal at the lowest price, just like most of us when we’re shopping for a product or service.  When you demonstrate skill and value before talking about salary, you are able to warrant the higher end of the salary range for your services.

Take Beverly.  She had 15 years of experience in her field.  When moving to a new city that was larger and could be more marketable, she was a little uncomfortable with what salary was fair.  After much thought and research, she came to a decision on what she would ask as a fair and bottom line acceptable salary offer, of course always open to making an increase.  The first salary negotiation rule is that you have a bottom line number (salary) that must be met or you walk. Of course, make sure it’s a realistic bottom line number and do your due diligence as to what the market will yield.  When Beverly received the employer’s offer it was lower than her research showed, so she countered with a salary she knew was comparable to her value.  The second rule on negotiating is that you never negotiate until there is an offer and they WANT YOU.  The employer took several days to find a position that would fit Beverly’s salary range and fit her into their organization. This tells me that she effectively positioned herself as a valuable employee they couldn’t afford not to have as part of their team.

This month we’ll cover several points that will help you through this oh-so uncomfortable but oh-so important phase of negotiations. 

Salary Negotiation Point #1 – As we stated above, discuss salary only when the offer is made.  Never negotiate unless you have an offer and they want you.  Why would an employer ask about salary early on?  To eliminate you from the process.  Before the offer, you should be talking about what you can do for the interviewer.  After an offer is made, you can talk about what the employer can do for you in terms of salary, benefits, etc.  When asked about salary too early, you might respond with “I’d like to postpone talking about salary until I fully understand the nature of the job we are talking about.”  Or you might state, “Well, I’m probably not the cheapest, but I’m sure that you pay a fair salary, don’t you?”   Which brings us to the next step…

Salary Negotiation Point #2 - They go first.  Let the interviewer tell you the salary range of the position before you state your salary requirements.  Once the interviewer’s salary range is given, repeat the top figure and pause before responding.  Think about the offer, compare it to what you know the market is paying, contrast it to other similar positions and then respond.  What response?  The truth – sounds great, sounds acceptable or sounds disappointing.

Salary Negotiation Point #3 – Once you’ve given your initial response, let the employer know what you found when you researched the market for the position.  A researched response pays off.  The employer knows what the market is paying for the position and is aware of whether they pay above or below that market rate.  Your researched response will hold credibility with the employer.  To find the market rate of your position, the internet is a great research tool.  Websites include:  www.jobstar.org; www.salary.com; www.careerjournal.com.  Use any other resource you can access to be informed when you enter the negotiation.  Do you know others in that field or that position who can tell you what their company pays for the same position?

Salary Negotiation Point #4 – Once you’ve negotiated the salary, don’t be afraid to deal some more.  Determine in advance what else, besides salary, is a benefit to you.  Can you negotiate a flexible work schedule or more vacation?  Can you negotiate any expenses (i.e., company car, relocation, cell phone, parking, training, etc.)? 

Salary negotiation is a dance.  Pay close attention to the signals from prospective employers and your gut reactions during interviews and negotiations.  They are reliable predictors of the employment relationship.  Managing your career with the goal of financial independence means creatively negotiating at the outset.  You can do it!

 

Salary Negotiation – Part 2

In our last newsletter, we covered salary negotiation tips for a new position.  We also briefly mentioned that you should have a bottom line salary in mind. If that salary cannot be met, you must be comfortable walking away from the opportunity.  To succeed in any type of negotiation, you must be willing to walk away.  Let’s look a little closer…

One of the reasons you work with a career coach is to market yourself better to organizations. This increases your perceived value and financial standing.  By accepting a job offer you should really walk away from, you sabotage your career success and financial standing.  How do you know when to walk away?

Look at poor Steve.  His interviewer began by ridiculing items on his resume and discounting real experience.  After his entire resume had been verbally chopped, Steve had to get up and leave the interview.  Later, when he talked to his contact for this interview, the explanation was that this was just the interviewer’s style and that Steve might have been offered the position had he stayed.  But Steve did not regret his move.  In fact, several months later Steve saw the interviewer’s name in the paper.  He was the subject of an investigation for the mistreatment of staff.  Steve listened well to his internal mechanism or “gut” while in this interview.

Here are several situations that should give you a red flag when interviewing or in salary negotiation: 

Salary Negotiation Red Flag #1 – An employer that is inflexible and displays no respect.  They don’t respond to e-mails, can’t find time for a meeting, can only be available via telephone for a few minutes at a particular time or demand a quick response.  They haven’t decided they WANT YOU.  Walk away.

Salary Negotiation Red Flag #2 – Try as you may, they just won’t negotiate.  Often HR never gives you their best offer first unless you hear the words “This is a firm offer.” However there are more things to negotiate other than salary (at least 26 other things I walk through with my clients). No matter what option you propose whether it be a different start date, job duties, more vacation, professional training, tuition reimbursement, company car or cell phone, they won’t budge.  This is probably a good indicator of how they will negotiate in the future on salary or these items.  Walk away.

Salary Negotiation Red Flag #3 – An employer that isn’t on their best behavior during the interview process.  They may be derogatory about your work experience or your value as they were with Steve above.  They might simply be nonchalant or cut off your answers before you can complete your thought.  This is probably a taste of how they will address you as an employee. “Believe them when they show you who they are the first time.” They are showing you what they will be like as an employer. Walk away.

Salary Negotiation Red Flag #4 – Being unwilling to see the situation for what it truly is and continuing to go forward with unfavorable terms.  Don’t move into an unfavorable situation because of fear, bills, a slow economy, or higher unemployment.  Pull out of your tunnel vision and look around you.  Talk to your career coach, a trusted friend or adviser.  Trust your internal mechanisms and intuition.  Be secure in the value you possess. If you take the job embrace the fact that this is a stop gap job and not a resting place or career!

I know what you’re thinking.  You couldn’t possibly walk away from any salary negotiation in this shaky economy.  Unemployment is up as well as layoffs.  Obviously, during a slow economy it’s easier to discount that strong negative reaction to the position or salary negotiation because you believe jobs are scarce.  Stop!  Try to see all of your opportunities.  Don’t be pressured into accepting an inferior position with an inferior salary because of fear.  You continue to bring the same value to the organization in a slow economy as you would in a growing economy.  There is still a market value to that worth.