Salary Negotiating Tips
Many people fail to understand the process of salary negotiation. It is not simply demanding more money for your services. Communication, preparation, trust, a mutual understanding of each party’s position and willingness to compromise are the key ingredients of successful negotiations. In the end both parties must believe they have reached an agreement that serves their mutual interests.
“What salary range are you interested in?”
“What are your current earnings?”
“The salary for this position is $35,000.00. Are you interested?”
Most job seekers, when asked these questions, fail to respond adequately and, consequently, either leave money on the table or worse, fail to receive an offer. In no other area is there as much timidity, equivocation or hesitation. To overcome this, you need to develop a negotiation strategy just as you develop a strategy for handling standard interview questions about your professional skills. To do this, you must make a clear distinction between the negotiation of a position and discussions about your salary requirements or earnings history. It will help if you keep in mind the first principle of successful negotiation.
Never Negotiate Without an Offer
The only appropriate time to negotiate a salary is when an employer has extended an offer or will extend an offer if a compensation package is mutually agreeable. Obvious? Perhaps, but many job seekers frequently negotiate, though they may not know it, without receiving an offer. You need to keep in mind a number of related principles of negotiation. They are:
- Don’t be the first to mention money. Your interviewer may be considering a better offer than what you had in mind.
- Never give a salary range. Giving a salary range can short-circuit the process and leave money on the table.
- Be careful not to overshoot on your requests. Unreasonable demands can break down the negotiating process.
- Use your previous compensation plan as a point of reference – not your salary. This includes any bonuses, commissions or other forms of payment you may have earned.
- Coordinating the timing of several job offers can increase the perception that your services are in demand.
You have undoubtedly noted the requests should not to be forced. We mean that literally. You should not volunteer your current earnings or your income goals unless the interviewer forces the issue or you feel that further avoidance is pointless.
Look for the Buy Signs
In the sales world buy signs are anything a buyer would do to suggest they have an interest in your product or service.
Here are some obvious Interview buy signs:
1. The interview runs longer than planned.
2. You receive a callback for a second or third interview.
3. The interviewer starts to sell you on the company.
4. The decision-maker starts to ask questions about salary or benefits.
5. They send you for an exam or start to contact your references.
These are all good signs the company is interested in your services. Strong buy signs often suggest you will have some leverage in the salary negotiation process.
Do Your Homework
Preparation is a key element of successful salary negotiation. If you are asking for more money you need to be prepared to justify your position. During the interview process you can aid your cause by uncovering some information.
- Is there an event driving the need?
- Does your interviewer have a key project deadline that must be met?
- Does this position need to be filled to satisfy a major client’s request?
- Are their regulatory issues that demand the position be filled?
- Does this position play a vital role in achieving the company’s strategic goals?
- How many other candidates have they interviewed? Do any of the other candidates have comparable qualifications?
- Do you have some special expertise that very few other people possess?
If you have an ideal salary in mind you need to be prepared to defend it. A breakdown of average wages on national and regional scales can be found on the Internet or at your local library. This information can be used to justify your compensation request.
Focus on Mutual Gain
Many companies use a variety of incentives to reward employees and attract high level talent beyond a base salary. Here is a list of benefits you should consider during the negotiation process.
- Base Salary
- Personal Days
- Extra Vacation Days
- Healthcare Insurance
- Prescription Plan
- Dental Insurance
- Life Insurance
- Long term disability
- Educational Programs
- Stock Options
- Pension Plan
- 401K Investment Savings Plan
- Credit Union Membership
- Profit Sharing
- Expense Account
- Company Car
- Gas Allowance
- Relocation Costs
- Club Memberships
- Reserved Parking
- Bigger office
- Discount Purchases
Both you and your employer have individual interests at stake. Look for ways to reconcile both by creating opportunities for mutual gain.
Negotiating compensation packages requires a positive approach and some planning. If you received an offer you feel is a little on low side you have two options:
A. Buy time buy asking if you can have a few days to consider the offer. This will give you an opportunity to evaluate the offer and submit a counter offer.
B. Put all the issues on the table in a positive tone and present your case for more money.
“Your widget company has an excellent reputation and I am excited about the prospects of coming to work for you. In situations like this I like to do my homework. The average salary for someone with my skills and experience is $50,000 according to the latest industry surveys published in XYZ trade journal. Given the increased cost of living for this area, my additional experiences and my willingness to accept two weeks of annual vacation instead of three weeks -$55,000 is a figure I had in mind.”
The decision-maker may agree to the figure or counter-offer with a figure of $53,000. The most that can happen is the decision-maker rejects both offers and you’ll walk away from the table knowing you received the best and final offer.