What To Know Before Negotiating Your Job Compensation Package

It seems like there’s hardly a story line the media in the U.S. like better than a degree-holding 20-something living at home while working full-time in the local coffee shop. All of these boomerang kids, the reports seem to say, will most definitely not be alright.

But what about all the recent grads who were lucky enough to secure a full-time position or likely will soon? There’s no shortage of professionals and how-to-succeed books encouraging employees to negotiate for a better starting salary or benefits, but in this employer’s market shouldn’t a 22-year-old just be happy he or she has a serious job offer?

Recent college graduates take note: according to Rose Ernst and Tara Wyborny, the National Delivery Director and Recruiting Leader, respectively, of G10 Associates Program, a post-grad program which helps recent grads gain valuable career skills, there’s always room for negotiation – as long as you’re smart about what you’re negotiating for and how you go about it.

First things first, make sure you have the job. Jumping into negotiating your benefits during the preliminary interview indicates to the hiring manager that you’re not concerned with the right things – namely, how you can help the company.

“When you’re in your first interview with a company, it’s not the right time to ask about the health care they provide or the 401k,” said Ernst. “It’s presumptuous.”

Instead, wait until you you’re in your final interview or have been offered the job – or at least have a sense that you’re in the running — to ask for a benefits summary.

That way, you can compare it with other jobs before accepting anything, without seeming entitled. And comparison is key – there are many benefits that employers are not required to give but very well may beyond just your base salary that you’ll want to take into consideration.

When it comes to health care and starting salary, large companies typically have set plans and starting rates that are usually non-negotiable (smaller companies have more wiggle-room).

But vacation time, tuition reimbursement, additional free training, parking subsidies, mass transit subsidies, phone subsidies and home office expenses are all things that can be negotiated for, as long as you’re “in a position of power” in the negotiations (i.e., if you have a few other offers on the table you can use to leverage yourself, or particularly valuable skills or experiences).

“If you’re being offered $50,000 at a company without a 401k match contribution and $40,000 at a company with an employer match, that makes a difference,” Ernst added.

Just as when beginning your initial job search process, educating yourself on the ins-and-outs of various 401k and health care policies before you see the benefits summary for your prospective company is recommended.

While the hiring manager will usually go over the benefits package with you, don’t be afraid to ask them to do so if they don’t.

“Get to know how these plans are structured, what these different things are, so you’re not completely wide-eyed when someone’s going over it,” Ernst suggested. “Honestly, it can add up.”

And when you are at the negotiating stage in the hiring process, don’t make demands that don’t fit into the company’s culture. Instead, have a collaborative conversation.

“I’ve experienced it first hand, I wouldn’t say it’s common but you definitely want to be careful how you phrase requests to change your compensation or benefits,” Wyborny said. “They’re really excited to get you in the door too, but they expect you to assimilate to their work culture.”

Ernst also suggested that those entering the job market educate themselves on their paychecks and understand the up-front expenses of the job search.

Moving to a new city, the wait period before the first paycheck arrives and a new work wardrobe are all things that need to be taken into consideration when starting a job. Additionally, medical deductions typically don’t kick in until the second month of employment, according to Ernst, which catches many new hires off guard.

Talking to someone who started in a similar career in the same city is a great way to educate yourself on upfront expenses.

And if you think you deserve a higher salary, Wyborny said to make sure you know how to leverage yourself – knowing comparable salaries (“not from Glassdoor, somewhere reputable”) will ensure that you come in with the background knowledge that the hiring manager will respect.

“Don’t come in and say ‘I have a ton of student loan debt so I need you to pay me more,’” added Wyborny. “We understand there are financial pressures, but that doesn’t mean I’m going to pay you more.”

Ultimately, Ernst said it’s up to each individual to know what’s important to them, what they can expect from an employer and how much they value themselves.

“You won’t get everything you want, but you won’t get anything you don’t ask for,” she said.

via What To Know Before Negotiating Your Job Compensation Package.

What To Know Before Negotiating Your Job Compensation Package

15 Rules for Negotiating a Job Offer

Job-offer negotiations are rarely easy. Consider three typical scenarios:

You’re in a third-round interview for a job at a company you like, but a firm you admire even more just invited you in. Suddenly the first hiring manager cuts to the chase: “As you know, we’re considering many candidates. We like you, and we hope the feeling is mutual. If we make you a competitive offer, will you accept it?”

You’ve received an offer for a job you’ll enjoy, but the salary is lower than you think you deserve. You ask your potential boss whether she has any flexibility. “We typically don’t hire people with your background, and we have a different culture here,” she responds. “This job isn’t just about the money. Are you saying you won’t take it unless we increase the pay?”

You’ve been working happily at your company for three years, but a recruiter has been calling, insisting that you could earn much more elsewhere. You don’t want to quit, but you expect to be compensated fairly, so you’d like to ask for a raise. Unfortunately, budgets are tight, and your boss doesn’t react well when people try to leverage outside offers. What do you do?

Each of these situations is difficult in its own way—and emblematic of how complex job negotiations can be. At many companies, compensation increasingly comes in the form of stock, options, and bonuses linked to both personal and group performance. In MBA recruitment, more companies are using “exploding” offers or sliding-scale signing bonuses based on when a candidate accepts the job, complicating attempts to compare offers. With executive mobility on the rise, people vying for similar positions often have vastly different backgrounds, strengths, and salary histories, making it hard for employers to set benchmarks or create standard packages.

In some industries a weak labor market has also left candidates with fewer options and less leverage, and employers better positioned to dictate terms. Those who are unemployed, or whose current job seems shaky, have seen their bargaining power further reduced.

But job market complexity creates opportunities for people who can skillfully negotiate the terms and conditions of employment. After all, negotiation matters most when there is a broad range of possible outcomes.

As a professor who studies and teaches the subject, I frequently advise current and former students on navigating this terrain. For several years I have been offering a presentation on the topic to current students. (To see a video of this talk, go to www.NegotiateYourOffer.com.) Every situation is unique, but some strategies, tactics, and principles can help you address many of the issues people face in negotiating with employers. Here are 15 rules to guide you in these discussions.

The RulesDon’t underestimate the importance of likability. This sounds basic, but it’s crucial: People are going to fight for you only if they like you. Anything you do in a negotiation that makes you less likable reduces the chances that the other side will work to get you a better offer. This is about more than being polite; it’s about managing some inevitable tensions in negotiation, such as asking for what you deserve without seeming greedy, pointing out deficiencies in the offer without seeming petty, and being persistent without being a nuisance. Negotiators can typically avoid these pitfalls by evaluating (for example, in practice interviews with friends) how others are likely to perceive their approach.

Help them understand why you deserve what you’re requesting. It’s not enough for them to like you. They also have to believe you’re worth the offer you want. Never let your proposal speak for itself—always tell the story that goes with it. Don’t just state your desire (a 15% higher salary, say, or permission to work from home one day a week); explain precisely why it’s justified (the reasons you deserve more money than others they may have hired, or that your children come home from school early on Fridays). If you have no justification for a demand, it may be unwise to make it. Again, keep in mind the inherent tension between being likable and explaining why you deserve more: Suggesting that you’re especially valuable can make you sound arrogant if you haven’t thought through how best to communicate the message.

Make it clear they can get you. People won’t want to expend political or social capital to get approval for a strong or improved offer if they suspect that at the end of the day, you’re still going to say, “No, thanks.” Who wants to be the stalking horse for another company? If you intend to negotiate for a better package, make it clear that you’re serious about working for this employer. Sometimes you get people to want you by explaining that everybody wants you. But the more strongly you play that hand, the more they may think that they’re not going to get you anyway, so why bother jumping through hoops? If you’re planning to mention all the options you have as leverage, you should balance that by saying why—or under what conditions—you would be happy to forgo those options and accept an offer.

Understand the person across the table. Companies don’t negotiate; people do. And before you can influence the person sitting opposite you, you have to understand her. What are her interests and individual concerns? For example, negotiating with a prospective boss is very different from negotiating with an HR representative. You can perhaps afford to pepper the latter with questions regarding details of the offer, but you don’t want to annoy someone who may become your manager with seemingly petty demands. On the flip side, HR may be responsible for hiring 10 people and therefore reluctant to break precedent, whereas the boss, who will benefit more directly from your joining the company, may go to bat for you with a special request.

Understand their constraints. They may like you. They may think you deserve everything you want. But they still may not give it to you. Why? Because they may have certain ironclad constraints, such as salary caps, that no amount of negotiation can loosen. Your job is to figure out where they’re flexible and where they’re not. If, for example, you’re talking to a large company that’s hiring 20 similar people at the same time, it probably can’t give you a higher salary than everyone else. But it may be flexible on start dates, vacation time, and signing bonuses. On the other hand, if you’re negotiating with a smaller company that has never hired someone in your role, there may be room to adjust the initial salary offer or job title but not other things. The better you understand the constraints, the more likely it is that you’ll be able to propose options that solve both sides’ problems.

Be prepared for tough questions. Many job candidates have been hit with difficult questions they were hoping not to face: Do you have any other offers? If we make you an offer tomorrow, will you say yes? Are we your top choice? If you’re unprepared, you might say something inelegantly evasive or, worse, untrue. My advice is to never lie in a negotiation. It frequently comes back to harm you, but even if it doesn’t, it’s unethical. The other risk is that, faced with a tough question, you may try too hard to please and end up losing leverage. The point is this: You need to prepare for questions and issues that would put you on the defensive, make you feel uncomfortable, or expose your weaknesses. Your goal is to answer honestly without looking like an unattractive candidate—and without giving up too much bargaining power. If you have thought in advance about how to answer difficult questions, you probably won’t forfeit one of those objectives.

Focus on the questioner’s intent, not on the question. If, despite your preparation, someone comes at you from an angle you didn’t expect, remember this simple rule: It’s not the question that matters but the questioner’s intent. Often the question is challenging but the questioner’s intent is benign. An employer who asks whether you would immediately accept an offer tomorrow may simply be interested in knowing if you are genuinely excited about the job, not trying to box you into a corner. A question about whether you have other offers may be designed not to expose your weak alternatives but simply to learn what type of job search you’re conducting and whether this company has a chance of getting you. If you don’t like the question, don’t assume the worst. Rather, answer in a way that addresses what you think is the intent, or ask for a clarification of the problem the interviewer is trying to solve. If you engage in a genuine conversation about what he’s after, and show a willingness to help him resolve whatever issue he has, both of you will be better off.

Consider the whole deal. Sadly, to many people, “negotiating a job offer” and “negotiating a salary” are synonymous. But much of your satisfaction from the job will come from other factors you can negotiate—perhaps even more easily than salary. Don’t get fixated on money. Focus on the value of the entire deal: responsibilities, location, travel, flexibility in work hours, opportunities for growth and promotion, perks, support for continued education, and so forth. Think not just about how you’re willing to be rewarded but also when. You may decide to chart a course that pays less handsomely now but will put you in a stronger position later.

Negotiate multiple issues simultaneously, not serially. If someone makes you an offer and you’re legitimately concerned about parts of it, you’re usually better off proposing all your changes at once. Don’t say, “The salary is a bit low. Could you do something about it?” and then, once she’s worked on it, come back with “Thanks. Now here are two other things I’d like…” If you ask for only one thing initially, she may assume that getting it will make you ready to accept the offer (or at least to make a decision). If you keep saying “and one more thing…,” she is unlikely to remain in a generous or understanding mood. Furthermore, if you have more than one request, don’t simply mention all the things you want—A, B, C, and D; also signal the relative importance of each to you. Otherwise, she may pick the two things you value least, because they’re pretty easy to give you, and feel she’s met you halfway. Then you’ll have an offer that’s not much better and a negotiating partner who thinks her job is done.

Don’t negotiate just to negotiate. Resist the temptation to prove that you are a great negotiator. MBA students who have just taken a class on negotiation are plagued by this problem: They go bargaining berserk the first chance they get, which is with a prospective employer. My advice: If something is important to you, absolutely negotiate. But don’t haggle over every little thing. Fighting to get just a bit more can rub people the wrong way—and can limit your ability to negotiate with the company later in your career, when it may matter more.

Think through the timing of offers. At the beginning of a job hunt, you often want to get at least one offer in order to feel secure. This is especially true for people finishing a degree program, when everyone is interviewing and some are celebrating early victories. Ironically, getting an early offer can be problematic: Once a company has made an offer, it will expect an answer reasonably soon. If you want to consider multiple jobs, it’s useful to have all your offers arrive close together. So don’t be afraid to slow down the process with one potential employer or to speed it up with another, in order to have all your options laid out at one time. This, too, is a balancing act: If you pull back too much—or push too hard—a company may lose interest and hire someone else. But there are subtle ways to solve such problems. For example, if you want to delay an offer, you might ask for a later second- or third-round interview.

Avoid, ignore, or downplay ultimatums of any kind. People don’t like being told “Do this or else.” So avoid giving ultimatums. Sometimes we do so inadvertently—we’re just trying to show strength, or we’re frustrated, and it comes off the wrong way. Your counterpart may do the same. My personal approach when at the receiving end of an ultimatum is to simply ignore it, because at some point the person who gave it might realize that it could scuttle the deal and will want to take it back. He can do that much more easily without losing face if it’s never been discussed. If someone tells you, “We’ll never do this,” don’t dwell on it or make her repeat it. Instead you might say, “I can see how that might be difficult, given where we are today. Perhaps we can talk about X, Y, and Z.” Pretend the ultimatum was never given and keep her from becoming wedded to it. If it’s real, she’ll make that clear over time.

Remember, they’re not out to get you. Tough salary negotiations or long delays in the confirmation of a formal offer can make it seem that potential employers have it in for you. But if you’re far enough along in the process, these people like you and want to continue liking you. Unwillingness to move on a particular issue may simply reflect constraints that you don’t fully appreciate. A delay in getting an offer letter may just mean that you’re not the only concern the hiring manager has in life. Stay in touch, but be patient. And if you can’t be patient, don’t call up in frustration or anger; better to start by asking for a clarification on timing and whether there’s anything you can do to help move things along.

Stay at the table. Remember: What’s not negotiable today may be negotiable tomorrow. Over time, interests and constraints change. When someone says no, what he’s saying is “No—given how I see the world today.” A month later that same person may be able to do something he couldn’t do before, whether it’s extending an offer deadline or increasing your salary. Suppose a potential boss denies your request to work from home on Fridays. Maybe that’s because he has no flexibility on the issue. But it’s also possible that you haven’t yet built up the trust required to make him feel comfortable with that arrangement. Six months in, you’ll probably be in a better position to persuade him that you’ll work conscientiously away from the office. Be willing to continue the conversation and to encourage others to revisit issues that were left unaddressed or unresolved.

Maintain a sense of perspective. This is the final and most important point. You can negotiate like a pro and still lose out if the negotiation you’re in is the wrong one. Ultimately, your satisfaction hinges less on getting the negotiation right and more on getting the job right. Experience and research demonstrate that the industry and function in which you choose to work, your career trajectory, and the day-to-day influences on you (such as bosses and coworkers) can be vastly more important to satisfaction than the particulars of an offer. These guidelines should help you negotiate effectively and get the offer you deserve, but they should come into play only after a thoughtful, holistic job hunt designed to ensure that the path you’re choosing will lead you where you want to go.

via 15 Rules for Negotiating a Job Offer – Harvard Business Review.

15 Rules for Negotiating a Job Offer

8 Tricks to Negotiating a Higher Starting Salary

Many of you will find it difficult to raise and discuss the subject of money during interviews or contract discussions with a potential new employer. This is understandable, as money is an uncomfortable subject.

But this hesitancy to broach the subject of money with an employer is both self-limiting and nonsensical. Why? Because research from a CareerBuilder survey has revealed that a staggering 51 percent of employers plan to leave some negotiating room when extending initial offers to new employees, with a further 21 percent being prepared to offer two or more offers to the same candidate.

In short, most employers are expecting you to try and negotiate your starting salary and may have shot low in anticipation of this, meaning that if you don’t negotiate, they may get you at a knock down price. That would be a disaster for you. Therefore, you have a duty to yourself to try and negotiate the best possible starting salary, (but this must be done professionally and effectively) To help, I have set out 8 tips to help you do just that.

1. Believe in yourself

Many of you will be instilled with a strong sense of self-belief, but, naturally, some of us may not be confident of our financial worth to an employer. If you doubt your own worth, you will be starting from a weak negotiating position, psychologically.

Therefore, take stock of all your years of experience and itemize your skills, knowledge and achievements and truly understand that you are entitled to be paid a wage that is in line with this.

2.Understand the need to fight for it within the rules of negotiation

This second trick is another psychological point. While you may deserve to be paid in line with your experience, employers will have their own agenda and are not likely to hand you the salary you desire on a plate. If you do not act, you will not maximize your starting salary. You will need to make it happen, you’ll need to fight for it—fairly, of course—and within the rules of the game.

3. Know your market value

When negotiating a starting salary with your employer you must have a realistic understanding of your market value based on your skills and the demand for your skills. Why? If you shoot too high and insist on fighting for a salary that is way above your realistic market value, you are likely to antagonize the person you are negotiating with, causing them to dig their heels in even further.

Therefore, ensure that you do a comprehensive market assessment of your worth using the salary checkers from Monster, CareerBuilder and/or Payscale. I’d recommend checking all three of them for greater reliability.

4. Know how strong your hand is

Try and establish what the current demand levels are for your skills. If your industry, profession or locality is suffering skills shortages, the demand for your skills may be high.

High demand means potentially higher salaries. You can assess how much demand there is for your skills  by reading press articles and networking with colleagues. You can also find out demand levels by reviewing jobs boards. If there are many vacancies for your skills, with few applicants, this can indicate high demand. Also, if the job has been advertised for a while this can indicate that they are struggling to fill it, which could be as a result of high demand.

5. Be prepared to walk way

I accept this may not always be possible, as you may simply need the money. So, the best way to handle this is to give yourself other options. Try and interview for several jobs at the same time and progress as many of these to offer stage as possible. Tactfully inform your interviewer that while their business is your preferred option you have other good options available. This means that the employer knows that they cannot take you, or your acceptance of their offer for granted. This means they are likely to be more negotiable or start with a higher offer.

6. Don’t show your hand first

Yes, it’s poker rules. Let the employer make the offer first. Imagine if you are thinking $35K and the employer is thinking $40K, the simple act of going first may cost you $5K. If you are pressed to to give a desired salary, just indicate a broad range and say it will be negotiable subject to the full details and terms of the role being made available.

Also, when applying for the job, don’t mention your salary expectations in the resume, as you may quickly price yourself out of the market.

7. Negotiating and how to push the employer’s buttons

If the salary offer that you receive is lower than expected, then you will need to negotiate and explain that you believe that your skills and experience are valued at a higher rate than this. How do you do this? Well, the CareerBuilder survey highlighted four approaches to negotiation that employers were receptive to. These were:

Highlight specific accomplishments and results you achieved (48 percent)

Know the range of salary you want and have justification for the increase (39 percent)

Show an understanding of what is important to the company (37 percent)

Come prepared with your history of performance reviews (26 percent)

So, if you want to push the employer’s button and influence them around to your way of thinking in terms of salary be ready to negotiate using these four methods. The information that you have gathered in steps 1 to 6 of this article will help you with the negotiating in step 7.

8. Try a more indirect negotiation based around perks and benefits

If the employer can’t offer you the salary you want then you can try other tactics to get the money you want. For example, the CareerBuilder survey showed that employers who could not provide a hike in starting salary were often prepared to offer other perks instead, which you may find valuable. These were things like: more flexible work hours, bonuses, training, vacation time, more casual dress codes, academic reimbursement and title changes.

Of course, you can’t make an employer give you a higher starting wage; they can pay you what they like within state and federal laws. However, if you can engage in an effective negotiation process, good employers will at least listen to your case, but you have to accept that you may not get the starting salary that you desire.

If you fail to get your desired salary offer, and you have no alternatives, take a deep breath and review the situation calmly. Many employees ignore the value of the non-monetary benefits. You could find that, when all is considered,  working with the new employer, (even at a lower wage than desired), may on balance be a positive when all the factors are taken into account.

 

via 8 Tricks to Negotiating a Higher Starting Salary.

8 Tricks to Negotiating a Higher Starting Salary