Salary Negotiation

Notes from Jack Chapman’s Book: Negotiating Your Salary: How To Make $1000 A Minute

When you negotiate your true value, both you and your company win. The salary negotiation is about developing a win-win situation.
There are variables that will affect the salary, such as extent of responsibilities. If you show an employer that you can make more than they are paying you, they will see the value in hiring you.

Prepare:

Do your Research: You need to know what the going range is for your position. Check websites such as:
salaries by industry)


Trade journals will often have an annual issue on salary surveys. (Check your library)
You are trying to determine your individual market value. The equation is:
- Objectively researched value (present going rate)
- Extra individual value: entry level through seasoned professional (past experience)
- Risk Factor (future contributions). Any direct impact you can have on their bottom line gives you more RF$.
Rely less on titles when researching fair market value and rely more on job descriptions.
Before going in to the negotiation have two figures in mind. Lowest you’ll accept and highest you are worth. Create a list and the list should contain each item you would like in your compensation package, and what you will accept. Rank them in order of priority. Have your search partner do the same. Review it before you go in to negotiate.
When: Salary negotiation should only happen when an offer has been made. It’s important to postpone discussion on salary at the beginning stage as it’s more often used to screen you and the value of what you can offer the company is not a factor at this stage.
When they have offered you the job, they have decided you are the right candidate. This will give you more flexibility and leverage when you try to negotiate. At this point they are trying to sell to you.

Talking about money too much before an offer can turn off a potential employer as they will think you are only interested in the money.

How: When an offer is made, repeat the figure and give yourself a moment to respond. Usually about 30 seconds. Think of what your response should be. Compare – contrast- evaluate.

If the offer is too low: Repeat the figure. Tell them you appreciate the offer. Refocus your interest in the job. Then make a statement you can agree on such as “I’m sure you want to pay me a compensation that is fair and will keep me committed and productive, right” and when they agree then state “Well then from my research I estimate that positions like this for someone with my qualifications are paying in the range of X to Y. What can you do in that range?”
Think the offer over (even if you know it’s too low) and tell them you are excited about the opportunity and you want to think about it.

ALWAYS KEEP A MUTUALITY ABOUT THE NEGOTIATION

Negotiation Strategies:

To goal is to create a win-win scenario. This is achieved by developing a close match that is agreeable to both the company and you.

  1. Just do it! You don't have to be an expert negotiator to get a sweeter deal; you just need to know the rules and strategies of negotiation.
  2. Organize a list of your ideals & needs in a compensation package. Go through it with your search partner and prioritize these items.
  3. Research the average salary for this area and within the industry and geographical area. You can use websites such as salary.com, salaryexpert.com, and jobstar.org for averages.
  4. After you have researched what the job pays and what compensation package is ideal and the one you are willing to accept, you are then prepared to answer the “salary expectations” question.
  5. It is appropriate to defer answering the "salary expectations" question if you do not yet have information on the job. You can say something like "I'm unable to answer that question because I'm considering a variety of types of positions and locations, and I don't have enough information on the job yet to be able to estimate what an appropriate salary would be. Would you please tell me more about the responsibilities of the position and the qualifications you need?"
  6. If possible it is better to have the company name the figure first. You can’t negotiate until an offer is made. If you are pressed to name a range (and no job offer is being made) then you can reply by first reconfirming your understanding of what the job entails, and then state “based upon what I know at this point of the job and the research I’ve done on market pay ranges, realizing of course that I will consider the entire benefit package, the range that seems appropriate is X to Y.” Follow that up with a question “Is that within your ballpark?”
  7. Tie the salary into the job; that gives you room to change if need be rather than attaching the salary to you. Do not use statements like “I need….”
  8. Always ask for a higher salary (within acceptable limits) than you are willing to accept so that when the employer counters your proposal, the salary should be near your original goal. And when possible, try to show how your actions (once on board) will recoup the extra amount (or more) that you are seeking -- through cost savings or increased sales revenue, productivity, efficiencies.
  9. Ask for the job offer in writing.
  10. If considering the position, let them know when you will have an answer and keep it under a week. Negotiate for more time (if needed) before and separately from negotiating for more money. Don’t get into the money discussion if you want to defer giving them your answer, because if they give you what you ask for then they will expect an immediate "Yes!"
  11. When delivering a counter-offer, restate the top 3 selling points you bring to the organization.
  12. You must provide justification for your counter-offer when asking for a higher salary after an offer made. There are only two categories of justification for asking for more money; consider these two factors when preparing your negotiation strategy:
  • Internal Factors: Qualifications you bring to the table and value you would bring to the company
  • Market Factors: What the market typically pays for this level position, in a similar industry,for a similar sized company, in a similar cost-of-living area.
  1. Never stop selling yourself throughout the negotiation process. Keep reminding the employer of the impact you will make, the problems you will solve, the revenue you will generate and/or the cost savings you will provide. And, continue expressing interest and enthusiasm for the job and the company.
  2. If you have multiple job offers, don't put the companies into a bidding war for your services; it rarely works out.
  3. Never make demands. Instead, raise questions and make requests during negotiations. Keep the tone conversational, not confrontational.
  4. You have to be willing to walk away from negotiations. If you don't have a strong position (a good current job or one or more current or potential job offers), it will be harder for you to negotiate. If you really need or want the job, be more careful in your negotiations.
  5. Once the employer has agreed to your terms, the negotiations are over. Do not ask for more or you risk the offer being rescinded.