11
Negotiating Your Job Offer
Early in my adult life I needed to buy a new car. My first car, which my dad had helped me purchase several years before, was soon to be headed to the junkyard. I went to the dealership filled with confidence that I would negotiate the best deal possible. Several hours later I left with a new car, but feeling as if I had “lost the fight.” I was convinced I had paid far more than I should have, but somehow still ended up paying the price and driving away. I chastised myself every time I drove that car until the day I sold it. What had happened?
Now let’s fast forward to the time I found and accepted my first corporate sector job. My previous professional experience had been in the nonprofit and government sectors, but they were both undergoing a recession and my ability to negotiate had been limited. When I received the corporate job offer, the recruiter’s comment to me was “don’t even think about negotiating.” I took him at his word and accepted the salary offered. Only a few weeks into the new job, I learned that a couple of my direct reports were earning a higher salary than I was. Once again, I was frustrated and chastised myself. What had happened?
Many of us have had similar experiences with negotiating, both in our personal and professional lives. Because we believe that we have somehow “lost” a negotiation, the experience sours us on the whole concept. We think that a winner and a loser must come out of the experience, and we are feeling the remorse of being the loser. The savvy job seeker understands that most 21st-century employers expect to go through a negotiation process with you. In addition, most employers expect to end up with a win-win solution—they want you to feel as if you have negotiated a fair deal, and they want to feel the same on their end.
In this chapter, we’ll look at negotiating from the job seeker’s perspective. What are some strategies that you can use to make sure both you and your new employer negotiate to a win-win final job offer?
Why Should I Negotiate?
Because many of us have such a negative connotation about negotiating, we have a real resistance to the idea of negotiating the details of a job offer. Why not just take what you are offered and avoid the whole unpleasant scenario? In many situations, you may be walking away from an opportunity to best meet your needs while also filling the employer’s requirements. Will you suffer from “buyer’s remorse” later?
Above all else, you are your own best advocate. No one else will represent you in the way that you will. If you do have specific priorities that need to be met, you are the best person to articulate those priorities and negotiate to ensure that they are filled. This is a challenge that only you can meet.
Secondly, you must be absolutely sure that your bottom-line needs are met. Whether the issue is a salary level necessary to maintain your standard of living, or a flexible work schedule to coordinate care for your children, you have requirements that must be met for you to be successful in a new job. Your new employer will not get the best performance you can provide if your bottom-line needs are not met. In that scenario, you are both set up to fail.
Finally, your long-range financial future could be affected—particularly if you are in the early stages of your career. The salary you accept now will affect future raises and long-term earning potential. Don’t you owe it to yourself to negotiate the best and fairest salary that you can? Your decision now could make a difference of thousands of dollars down the road.
When Should I Negotiate?
Many situations merit negotiating your job offer—and some almost demand that you make the effort. Let’s take a look at some scenarios in which negotiating will be to your benefit.
You should almost always try to negotiate if the salary does not meet your expectations. Perhaps, based on your research, you believe that the salary offered does not reflect your market value. Or maybe you’ve done the math, and the salary simply does not meet your needs to maintain your standard of living. Both scenarios can be good ones to try negotiating a higher salary. You may need to be prepared to walk away from the offer if you cannot successfully agree on a higher pay level, but at least you have the satisfaction of having tried. Your new employer wants you to come into your position with enthusiasm and energy, and feeling that you are underpaid will affect the passion with which you tackle your new job.
Recognizing that no job is ideal, a potential new employer may make you an offer contingent on responsibilities that are different or at a higher level than you originally discussed. In that scenario, you will probably believe that your value for the position just went up. This could be another good reason to negotiate salary. Because something about the job is different than you were originally led to expect, you are perfectly justified in going back and negotiating a pay rate that reflects the responsibilities now being given to you.
Finally, you may be in a scenario in which the salary offer is acceptable, but you need some sort of additional benefit because of your personal situation. Perhaps you have a child, and you need a flexible work schedule to accommodate your childcare provider. Or maybe you are willing to accept a lower salary in exchange for the ability to telecommute. These are both examples of situations in which you might want to negotiate aspects of the job beyond the salary.
When Should I Not Negotiate?
We hear so much about the concept of negotiating a job offer that some people believe they should always attempt to negotiate. However, in some scenarios negotiation is neither necessary nor wise. Why take the risk if all aspects of the offer meet your expectations?
A client of mine, Jack, was involved in a long and frustrating job search. The market in his geographic area was not good, and his skills were not in high demand. One day, he called to report that he had received an excellent offer at a salary well above what we had identified as his market value. He wanted to know if he should try to negotiate, because he had read in several job search books that you should “always” try to negotiate an offer. After a short discussion we jointly agreed that he had no real reason to make a counteroffer. The job was a great fit and the salary above expectations. He accepted the position exactly as offered.
Although I encourage my clients not to be the first to raise the issue of salary (best to leave that to the employer), the question can come up quite early in the interview process. If you indicated early on that a salary or range is acceptable, trying to negotiate something higher after receiving an offer is not a good idea. The employer took it in good faith that you were content with the salary or range—going back now could make you look less than ethical and endanger the offer you received.
Some employers (nonprofit or government organizations) simply have no flexibility in the salary that they can offer. You will probably know this up front, based on the published salary and your conversations with them. To attempt to negotiate when they have no flexibility will only frustrate you both.
It is important to determine whether or not you should negotiate, and how assertively you should negotiate (Figure 11-1). The two factors to consider are how much your skills are in demand, and how much you need the job:
• Low demand for skills and high need for job: Unless something is way out of line with the offer, you should probably not negotiate.
• Moderate demand for skills and moderate need for job: You might consider minor salary negotiation or negotiating benefits.
• High demand for skills and low need for job: You can negotiate assertively.
Figure 11-1. Should I Negotiate My Offer?
What Can I Negotiate?
When you think about negotiating a job offer, you most frequently think about negotiating salary. Salary negotiation is appropriate in many situations, as long as you are realistic. A client of mine, Pat, worked for a high-tech consulting firm. He was extremely well paid, and was aware of that fact. When his firm suddenly went bankrupt and he found himself looking for a new opportunity, he had to assess what a realistic salary range was. Although he would have loved to maintain his high salary, he knew it wasn’t likely. When he accepted a new job offer it was at a salary he considered reasonable, but it was also several thousand dollars less than he had been making.
In the event that salary is not negotiable, what else could make up for a salary that is less than what you wanted? You might consider trying to negotiate the timing of your first performance appraisal and your first opportunity for a raise. Typically, this step doesn’t happen until you have been with your new employer for a year. But you might be able to negotiate the opportunity for it to happen six months after your hire instead. That gives you six months to really demonstrate your value and show that you are worthy of a raise.
Many individuals use the negotiation process to discuss their benefits package. Perhaps you can get another week or two of vacation in lieu of a higher salary. Or maybe your new employer would be willing to pick up a larger portion of the cost of your health insurance. You may also find opportunities around funding your 401(k).
Because we’re all balancing so many responsibilities outside work, many individuals see this process as an opportunity to negotiate flexible work options. For instance, you might ask for a flexible schedule to accommodate the needs of an elderly parent. Or you may want to telecommute a few days a week because of traffic issues. Some organizations are willing to consider variations of a 4-10 work schedule (four days a week, 10 hours a day), which would give you a long weekend, every weekend.
In short, really think about your bottom line and your lifestyle. Appendix I is a monthly expenses worksheet to help you figure things out. What options would you want to negotiate that would work best for you?
Negotiating Salary
Most people find negotiating a salary to be the most intimidating process, especially because the subject of salary is often taboo to start with. Think about the many organizations that strictly forbid employees from discussing their salaries with one another. However, if you are prepared when you start negotiating, you’ll feel more comfortable.
A colleague of mine is the recruiting director for a major consulting firm, and he says that whichever party (applicant or employer) raises the salary issue first is at a disadvantage. However, some research suggests that the person who names their price first gets closer to their stated number (Chapman 2011).
Either way, it is very important to know your market value. Despite your previous salary or your expectations for a new salary, you need the reality check of knowing what you are worth out on the open market. If you don’t do this, you could undersell yourself or price yourself out of the market.
If asked about salary expectations, try to provide a range rather than a specific figure. You could say, “Based on the research I have done, I believe that this position is worth this range in this geographic area.” Then state a range of perhaps $10,000 (for example, $80,000-$90,000). Using this strategy, you show that you have done your homework to determine your market value, rather than simply stating a salary figure that you personally expect.
Finally, be realistic. Yes, that salary in the upper six-figure range would be just wonderful, but is it realistic for your market value, the type of employer, and the work that you will be doing? Remember my client Pat? He knew that it was unrealistic to expect an offer at his previous salary. If you are not realistic in your negotiation, you are not negotiating in good faith and you are risking the whole offer falling apart.
How Do I Know My Market Value?
To be realistic in your salary negotiations, know your actual market value. It will be based primarily on the job title, type of work, and your geographic region. The same job title will probably have a very different market value in rural Idaho than it does in New York City. Determining your market value will require you to do some research.
A good place to start is with professional organizations and publications. Many professional organizations conduct annual surveys of a range of job titles in various geographic regions. This information may be published in a research report or whitepaper or on their website. They also typically discuss any salary trends they are observing. Note that you may need to be a member of the association to access these data.
There are also a large number of commercial online resources for salary research. Although some charge users for detailed searches, most allow basic searches by job title and geographic area for free. The data may be a bit dated, because it is often based on research that is as much as a year old. However, most online resources allow users to dig down for both job titles and cities or geographic regions. Many supply a median salary and ranges of salaries. Some of the most popular online resources are Salary.com, Glassdoor.com, and Payscale.com.
The United States Department of Labor Employment and Training Administration also provides a very good online resource, O*NET OnLine (www.onetonline.org). In addition to listing the job requirements, interests, and skills for a huge range of job titles, O*NET provides data about the projected demand in coming years. Salary information is available both nationally and broken down to the state level. This is a rich resource of information for determining your market value.
Friends and colleagues working in your field can also be a good resource for salary information. In fact, they can probably provide the most up-to-date figures based on their knowledge of your field. Rather than asking colleagues exactly how much money they are earning, instead ask them for their insight into what a realistic range is. If possible, find a colleague working in the industry in which you are considering an offer, because she will probably provide the most accurate information for your purposes.
Negotiating: The Personal Aspects
After your salary research is complete, there are still variables that make every negotiation unique. These are subjective aspects, based on your personality and comfort level, and are entirely within your control.
Negotiation does require a certain level of assertiveness. Even initiating the process requires that you be fairly assertive. A big difference exists, however, between assertiveness and aggressiveness. Being overly aggressive could offend a potential employer and even result in an offer being rescinded. So what level of assertiveness is called for?
Most important, keep your negotiations with your potential employer positive. This is not the car dealership scenario described at the beginning of the chapter. You and your employer need to conclude the conversation feeling as if both sides got a fair shake. But what does this mean?
First, make a case for your value. What skill sets do you bring to the table that will benefit the employer? How will you help them solve their problems? Better yet, how will you help them move their performance to the next level? This conversation is not about what you need from them, but about the value you can add to their organization.
Second, understand the employer’s constraints. Some employers (particularly nonprofit or government employers) may not have a lot of flexibility in the negotiation process. Don’t be unrealistic in your expectations.
Finally, don’t issue an ultimatum. Nothing will take negotiations to a negative place more quickly than issuing an ultimatum about what you want or need. Even if you have a bottom line in mind, making demands will not get you what you want. Instead, negotiate from a positive place. If you do end up having to walk away from the offer, keeping the process positive will result in both parties feeling good even though the negotiation was not successful. And who knows, another opportunity may come up in the future for which you will be viewed favorably.
After some of my negative early career and personal experiences around negotiating, I detested even seeing the word negotiate. I promised myself that I would never again put myself in a scenario in which I needed to negotiate anything. That promise was, of course, not realistic. As I began to realize that the process did not necessarily have to be negative, I realized that I could develop the expertise to negotiate both positively and effectively.
Realize that your future employer truly wants you both to be happy. If you accept a job with a salary that you view as being unacceptable or a benefits package that is inadequate, you likely will not perform at your maximum.
In short, you need to adjust your attitude about the negotiation process by adopting a mindset that the process should result in a win-win situation. While that adjustment may be easier said than done, it’s important to see that your job offer discussion is much different from the negative process you may experience when you purchase a car. A win-win benefits both you and your potential employer. Keeping that concept in mind will help you diminish your negative feelings about the negotiation process.
How Will My Potential Employer Respond?
The good news is that most private sector employers expect some kind of negotiation process. Negotiation of the various aspects of an offer has become a widespread practice. In a 2015 Salary.com survey, 73 percent of the employers surveyed said they were not offended when people negotiate. Even more interesting, 84 percent of the respondents said they always expect job applicants to negotiate salary during the interview process. And for those concerned about losing an offer if they try to negotiate, 87 percent said they’ve never rescinded a job offer after the negotiation process.
The bad news is that there is some risk. If the employer you are trying to negotiate with is not one of the 87 percent, you do run the risk of offending them and your offer being rescinded. Refer to the earlier part of this chapter about when and when not to negotiate for assistance in making your decision about whether to move ahead.
Getting to Win-Win
Regardless of whether you are negotiating salary, benefits, or work schedule, these tips will help you be successful and achieve the win-win scenario that both you and your potential employer are striving for.
Remember to stay positive. The theme of remaining positive is woven through this entire chapter, but it is the single most important thing that you must do throughout the process. If you become negative by making unreasonable demands, for example, the entire process will break down. Regardless of your previous experiences with any kind of negotiating, stay positive.
To best make your case during the negotiation process, you have to be prepared with any back-up information that you will need. With salary negotiation that means knowing your market value. For other issues (benefits, work schedule, and so forth), you need to help the employer understand how everyone will benefit. For example, if you are trying to negotiate a telecommuting arrangement two days a week, you should first assure your employer that you have the technology in your home to make the arrangement work flawlessly. You should also try to have some evidence (perhaps from past experience) that you may actually be more productive when working from home.
Finally, be realistic about the eventual outcomes from the negotiation process—you may not get everything that you want. You may not get the full salary you desire, or you may end up telecommuting one day a week rather than two. However, in a true win-win scenario, both you and your new employer will feel satisfied with the outcome of the process.
Wrapping Up the Deal
You have moved through the negotiation process successfully and have received an offer that is acceptable. Congratulations! What steps do you need to take to finalize the deal?
First off, do not accept the offer on the spot, even if you’ve already gone through negotiations. You may have a spouse or significant other with whom you need to discuss the details of the offer. Absent that, you simply deserve the opportunity to review the offer one last time in detail to be absolutely sure that you understand every aspect. Any reputable employer should be willing to give you at least 24 hours before you respond.
Secondly, be clear about all the details and make sure you understand what you are accepting. One of my clients received an offer that included a very complex system of awarding her company stock options. Although the situation sounded good on the surface, she did not understand the process. Her initial reaction was to just go ahead and accept, but I convinced her that she really needed to go back and clarify. When she did, the employer modified the process.
Third, get the offer in writing. A verbal offer is not enough and needs to be followed up with a formal offer letter. Learn from this example of a colleague of mine who did not heed this advice. She negotiated an extra week of vacation with her recruiting contact at the organization she was joining, but the agreement about the extra vacation was verbal. By the time she started work, her recruiting contact had left the company and no one knew anything about that extra week of vacation. Fortunately, the company did eventually go ahead and honor the verbal commitment, but my colleague could easily have ended up without that extra time off.
Finally, respond to the final offer in writing. Once again, a verbal acceptance is not enough and should be followed up with a formal letter. With a written offer and a written acceptance of the offer, you have a paper trail that ensures both you and your new employer are on the same page about the circumstances around your employment.
Summary
The negotiation process can be complex and frustrating, yet rewarding. First, research your circumstances to determine whether negotiation is recommended. Discover your market value and then consider what can be negotiated. It is important to keep a positive attitude and strive for an arrangement that will work well for both you and your future employer. A successful negotiation process will truly result in a win-win for both you and your new employer.