When negotiating a new job, everyone wants the highest salary they can get. But I have seen some employees do a terrible job negotiating. Many people simply accept whatever salary offer is given. And employees who want more usually do such a poor job that they receive minimal additional compensation. Two issues drive this negotiating challenge: fear and a lack of know how.
Fear
This is understandable, you’ve just been through an intensive interview process, perhaps with more than one company. The last thing you want to do after you receive a job offer is annoy your new employer. But try to see it from their perspective. They have also endured a lengthy and costly process to find the right person for the job – you. They also don’t want to blow it. And depending upon the position, they may want you more than you want them (especially in these challenging economic times).
Now let’s address the know-how mechanics of the process, or how to negotiate the best salary:
Acknowledge the Offer
Unless you have a good indication of what the offer is before you receive it, we don’t think you should start negotiating the salary immediately after you receive it. The employer has had all the time to formulate the offer and plan. You should give yourself the same time to think about it. Thank the employer for the offer and ask if you can think it over for the afternoon or until the next day. Set up a follow up phone call – this is when the negotiating will happen.
Research the Market
- Is this a fair offer? Why do you want more (other than everyone wants more?)
- How much do employees performing similar work at this company or others earn?
- Can you ask friends or co-workers who had similar roles what they earn? While you may feel uncomfortable asking, it really does help employees to share their salary information. Employers try to dissuade this behaviour, but really only for their benefit. Knowledge is power.
- How challenging is it for the company to fill this position? Does this require precise knowledge or is this a generic job. You’re clearly in a much better position in the former, and may have no negotiation position in the latter.
- How banded is the job salary range? This is very company dependent. Small companies usually have much more flexibility in what they can pay, as you may be the only person in this position. This benefits you greatly. Larger companies have very specific salary bands they can pay for a specific role, which can severely limit the hiring manager’s flexibility. But even in these strict cases, there is still a range.
Why don’t you check one of the online salary survey products in Australia that can help benchmark your role and takes into consideration your qualifications, skills and experience; http://www.livesalary.com.au or http://web.archive.org/web/20120119091423/http://paycheck.seek.com.au:80/
Have a Strategy in mind
- Have a figure in your head that would satisfy you. Just saying you want “more” is not going to help anyone. You need to understand what amount ends the negotiation.
- Is there anything you would be willing negotiate on? Would you take more money in a signing bonus, or a higher performance bonus? How about stock options? Would you be willing to take a higher bonus for a lower annual salary (maybe not in this economy).
- How important is the additional compensation? Would you be willing to decline the offer if they don’t hit your target? If you know that up front, explaining that to your prospective employer is a powerful negotiating tool.
Make the Pitch
Stay Positive. Your attitude and approach may be the single biggest factor for your success. Do not approach this as a confrontation or a zero sum game, i.e. I win you lose. That will not endear you to your employer. You want your employer to WANT to give you more money. This is a win-win situation. You compensate me equitably and I will make your company better. That’s it. Remember you are still wooing your employer. Speak about how excited you are about the opportunity. How wonderful you think the job and the company are. Be specific about what you hope to accomplish. You need to sell the vision of yourself, how wonderful this new marriage will be. This is not a sign of weakness or desperation. Employers want excited new employees.
Sell Yourself
This may be obvious, but even though you have been offered the job, you should continue to sell your potential employer on your strengths and value to the company. Be precise in your terms. Respond with a specific proposal of what would make you sign on the dotted line. Explain where your total compensation needs to be for the year, and which areas you are flexible. If you can be flexible on salary in exchange for performance based pay, you have a much better shot of achieving your goal.
It is now time to put your attention on the other factors of the salary-equation gold mine. This includes things like a signing bonus, or a higher performance bonus? How about stock options or more annual leave? Maybe your jewel in the crown is a review in three or six months which allows you time to show how great you will be in the role?
Thank your employer for listening, regardless of the outcome. If your demands are met, of course you will thank them. But even if they don’t change their offer at all, you should still thank them. “I understand that you can’t increase your offer, but I appreciate your willingness to hear my request. Thank you.” This acknowledgement demonstrates your professionalism and your employer will notice. And if you do it right, negotiating your salary may make your employer want you MORE.
