Tuesday, October 4, 2011

How to Negotiate the Salary You Want in a New Job

I have literally negotiated thousands of salaries and jobs over the past twenty some odd years.  I can only think of a handful of cases where a negotiation failed to produce a happy candidate and a happy client.  In order to be successful in negotiating, you have to approach an offer and potential negotiation with the correct mind-set.  In almost all the cases where there was a failure, either the candidate (usually) or the company (occasionally) approached the offer as a take it or leave it affair.

Start with a premise.  There should be no winners and no losers in a negotiation.  A negotiation should merely be a buyer (company) and a seller (prospective candidate) who are looking towards the same goal - a successful hire.  The buyer wants you to work at his or her company; the seller wants to work there.   While I recognize that there are bean counters, some HR people and some candidates who insist on “winning”, they are approaching the negotiation in the wrong way.  I always think that an offer should be accepted with the company thinking it is paying a bit too much and a candidate feeling that he or she is making too little. (I have never understood why a company will give me a job with an initial a salary range and then come in with an offer at the low end of that range; at the same time, candidates always want more than they end up making. I always give the range, knowing that the candidate will generally only hear the highest number.)
The truth is that by the time a company decides to hire a specific candidate, they are very much committed to him or her.  And, at the same time, a candidate who decides that the company is right for them is equally committed.  So why should it be unpleasant with winners and losers?

The ideal negotiation, if there is any, should go like this: the company offers x, the candidates wants y and they meet in the middle.  It should not be protracted or difficult.  And there should never be ill will. Let the company make the offer.  There is a rule in negotiating that says the first person to name a number looses.  If a candidate names a number first, they have locked themselves in and are somewhat precluded from negotiating.

Candidates sometimes they have to give themselves permission to accept a job. What I mean by this is that the candidate has committed to himself or herself at a certain financial or title level.  They may have even told their spouse how much they think they are going to get (often, far more than may be realistic).  And with that number or title in mind, they go job hunting.  When an offer comes for less then they previously thought they would get, they have to find a way to accept the job and not lose face to themselves or their family. There are lots of ways to do this.  Scheduled salary reviews, signing bonuses, guaranteed bonuses, guaranteed salary increases, extra vacation, better titles, spousal accompanying on business trips are all methods companies can use to get people to say, “Yes”.  These things should be part of a negotiation. 

Once an offer has been made, one of the best ways I know for candidates to get more money, a better title or other perks is to tell the company (or recruiter) that you really want the job but that you need more and if they give it to you, you will accept on the spot. This commitment before actually accepting works 90% of the time.

One of the perplexing things about recruiting is people who have been interviewing at a company for weeks, even months, who then receive an offer and ask for the weekend (or longer) to think about it.  They have had the entire time they have been interviewing to think about it already.  I certainly understand discussing an offer with a spouse or family.  Hopefully, that has been done long before an offer comes in so that accepting is merely a formality.  Accepting with enthusiasm is a positive way to start a relationship.

One piece of advice.  Before resigning, must have an offer letter.  The letter should spell out the full agreement of employment – title, responsibilities, salary, reporting structure, bonus, reviews, and any other understanding of the job which was discussed that is be relevant.  An offer letter is not a contract but it spells out your mutual understanding of the deal.  Remember, if it isn’t in the offer letter, it isn’t part of the deal.

When the negotiation is over, both parties should be happy and positive. 

1 comment:

  1. This should be required reading before every salary negotiation.. on both sides. Thanks again Paul



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