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When the job offer is on the table, the time has come
to negotiate a compensation package. The company is emotionally
invested in you, believing that you will benefit their
team. To vindicate their investment of time and resources
in their employee search, securing you as an employee
becomes their goal. All this means that the employer is
willing to spend more on you than she would have been
at the end of the first interview. The prospect of negotiating
the terms of employment surges through some like adrenaline
and others like an imminent fainting spell. If you do
not tend to get the results you want from negotiations,
or the mere prospect of discussing money makes you squirm,
consider these guidelines for more effective negotiation.
Know what you
You can almost guarantee that the person negotiating
the terms of employment on behalf of the company knows
your value. When you begin negotiations, you should
also know how much your work is worth. Using internet
resources, do research on the salary and compensation
ranges for comparable jobs in the area. Be sure to use
sources that account for differences in cost of living
between cities. Glean information during interviews
and from your network of sources that indicates the
relative value of the position in the company. Are you
applying to be a CFO or an entry-level accountant?
Set a clear goal.
Studies on negotiation consistently show that people
who set clear and aggressive goals achieve more favorable
settlements than those who aim low or do not set goals
at all. If you want a salary of eighty grand and a total
package worth 100 grand, shoot for it by throwing out
an anchor worth more than 100 grand.
Set a walk-away
You know your own financial goals, responsibilities
and liabilities. If you cannot take anything under seventy
grand and still make sense of accepting the position,
do not pretend that you can. Your walk-away price depends
not only on your financial needs, but also on the attractiveness
of your alternatives to accepting the offered position.
If you are currently making sixty grand and there are
no other offers finding you, settling at sixty-eight
grand might not be a bad idea. If, on the other hand,
you have been offered a position for seventy-five grand
and a generous benefit package, sixty-eight grand seems
as your standard.
The idea of fairness strikes a cord in most everybody,
even though people have differing perceptions of what
that means. Obtaining a compensation package that both
you and the employer consider fair is particularly important
since you are entering into an ongoing relationship.
If you discover four months into the job that you are
making twenty percent less than your counterparts, your
enthusiasm for your new job can sour. If your employer
feels like you bullied him into a costlier package than
the company authorized him to offer, he could easily
become resentful toward you.
You must be able to make a case for why your self-serving
version of fairness is appropriate. Are you worth more
than most people because you have more experience or
because you have a track record of attracting big clients?
Perhaps the rationale for your standard of fairness
has little to do with you personally, and everything
to do with asking for the median market value of your
work. Maybe you are asking for a salary that is commensurate
with others performing the same role in the company.
Remember: if your negotiating counterpart makes concessions,
she needs to be able to justify her concessions to her
boss. Reciprocally, it is helpful for you to identify
what your employer considers fair.
Both you and your employer probably have concerns or
aspirations that are not strictly monetary. You might
want CFP training without having to pay for it. The
employer can satisfy this interest in more than one
way: by building a cushion into the salary that would
cover schooling costs or paying for the schooling on
your behalf. You might also want one flex day per week
or the ability to work from home a few times a month.
You may value being able to leave by five o'clock consistently
to pick up your children, rapid promotions, a gym membership
or full health care.
Before you walk in to the negotiation, prioritize your
various interests and identify places where you are
willing to trade one thing of value for something else.
Is the salary more important than stock options? Is
a gym membership more important than a review and likely
promotion in six months?
When you negotiate the terms of the deal, discover what
your employer's various interests and reveal your own
insofar as this would benefit you. Maybe the employer
cannot go above sixty-five grand and still maintain
equity of salary within the company. Find out whether
the negotiator has full decision-making capability,
or if he is representing someone else who makes the
compensation decisions. Your employer may be able to
offset a concession on your part by paying for your
education, offering stock incentives, or giving you
a signing bonus. Be creative.
Compete and Cooperate.
If your counter-part is using hard-ball tactics like
being forceful, brisk or patently stubborn, you will
do better not to lie on the ground and wait for him
to stomp on your back. If you encounter someone who
wants to play hard-ball, respond strategically. Do not
allow the person to bait you. Remember your goals and
why your requests are fair. Withhold information that
might weaken your position. On the other hand, if your
counterpart makes a concession, it is important that
you also appear cooperative. You might need to make
a concession as well. Negotiating is not about winning,
so much as it is a dance towards a certain goal. Each
person makes moves with reference to the moves of the
other person. When both people dance together, it becomes
less likely that either person will suffer bruised toes
or damaged egos.