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May 1, 2014

The Art of Salary Negotiation

Tips on negotiating for your next job offer

Salary Negotiation“What are your salary expectations?” is one of the most critical questions you may encounter during the hiring process. Answering this question requires some skill and strategy. Recent data from Salary.com indicates that 87% of employers will not withdraw a job offer following negotiations during the interview.

Prepare for your next job offer and salary negotiation by following these tips:

1. Research – Know your worth. It is essential to research industry standards before each interview so you know what the approximate salary range is for the role you are being considered for. Job portals like www.payscale.com  and www.glassdoor.com  publish salary ranges for industries as well as roles. You must know your market value and be informed so your ask fits well within the role’s compensation range. According to HBR.org   Employers set salaries based on what they currently pay people to fill similar roles and what they believe competitors are paying. Information is power in negotiation so the more you know about these data points the better. Use LinkedIn to reach out to people who might know what an appropriate salary is. Maybe it’s someone you trust inside the organization, a career advisor, a search consultant, or contacts in the same industry. Don’t rely on one piece of data or one type of source. A good recruiter will ask if you have any base salary requirement. If asked, answer the question honestly. The employer needs to know that you’re in the range they’re hoping to pay so they don’t waste their time or yours. If you’re the top candidate, most employers are willing to do what they can to make the numbers work.

2. Wait for the question – Do not be the first person to bring up money/compensation into the conversation.

According to this Forbes article on salary negotiation  – Starting a discussion about salary prematurely sends a signal that you don’t place a high priority on being a good fit for a company’s culture – you just care about the almighty dollar. In the same way, if a recruiter brings up money right off the bat, it’s a good idea to smoothly change the subject so you can fully demonstrate your qualifications before talking about your salary requirements.

3. Stay strong without sounding aggressive – You want to sound positive during this conversation. One cannot afford to come across as too demanding. It is a tricky situation, because it is necessary to negotiate hard however you need to push just enough without going overboard.

 The Red Shoe Movement (A forum helping women achieve career success) had expert Lily Benjamin address this issue with the following: “Emotions will come across in negative ways when negotiating because you are trying to sell something you are passionate about. This causes you to forget to listen. State your intentions and be logical. People respond to logic not emotions. Redirect your emotions during negotiation. Show objective data. Emotions and passion can hijack objectivity and your negotiation techniques.”

4. Understand the person you are negotiating with – Knowing the person and their role at the organization is always helpful to navigate your conversation. Knowledge of role may help you gauge the capability and power that individual has in making a decision about your role.

Prof. Deepak Malhotra  professor at  Harvard Business School says  negotiating with a prospective boss is very different from negotiating with an HR representative. You can perhaps afford to pepper the latter with questions regarding details of the offer, but you don’t want to annoy someone who may become your manager with seemingly petty demands. On the flip side, HR may be responsible for hiring 10 people and therefore reluctant to break precedent, whereas the boss, who will benefit more directly from your joining the company, may go to bat for you with a special request. Your job is also to figure out where they’re flexible and where they’re not. If, for example, you’re talking to a large company that’s hiring 20 similar people at the same time, it probably can’t give you a higher salary than everyone else. But it may be flexible on start dates, vacation time, and signing bonuses. On the other hand, if you’re negotiating with a smaller company that has never hired someone in your role, there may be room to adjust the initial salary offer or job title but not other things.

5. Talk about the ‘Job offer’ as a whole –Understand the benefits and other factors like flexible working hours, vacation days, etc. It’s important to ask questions around career advancement opportunities, mentoring and training offered in the organization. Do not have a myopic view and limit your discussion to the salary alone.

Katherine McGinn, professor of business administration at Harvard Business School says “Candidates often focus on money because it is tangible but what makes a position attractive is not just the dollar amount assigned to it. Think about the aspects of the job that will make it satisfying: opportunities for advancement, exciting assignments, the chance to work with senior executives, etc.” McGinn suggests asking yourself, “How can I build the biggest job I’m interested in having?” and then negotiate with your potential employer about those non-monetary elements, in addition to salary.

6. Close confidently – Finally, know your ZOPA (Zone Of Possible Agreement) and be prepared to walk away or continue the discussion with a follow up later. You don’t have to agree to the offer on the spot or in person. It is common practice to request for time to think about the offer and go back with a response. Take no more than 2 days to do so. Remember to negotiate on facts based on research; it will help portray you as a professional.

In a competitive job market, salary negotiations may be perceived as challenging but a well thought-out strategy can help you walk out with your desired compensation package.

Image courtesy of David Castillo Dominici / FreeDigitalPhotos.net