Last Updated on September 26, 2021
Tips for Salary Negotiations
Trips for Salary Negotiations
In this guide you will find…
The Negotiation Mindset
A salary negotiation is much different than a typical sales negotiation. You are not negotiating the price of a used car, but instead you are working together to build a better future for both you and your future employer.
For both parties, the salary negotiation is a compromise, where you want everyone to be happy with the outcome. You may be thinking that it is best to squeeze every possible dollar and benefit from a future employer, however, I would advise against this. An employer that overpays (or pays significantly more than their initial offer) is going to have very high expectations for their new hire. This heightening of expectations could lead to added stress and a mismatch between expectations and reality. However, it is in your best interest to negotiate a salary that is fair and satisfactory to your current life situation. If you go the route of accepting the first offer, just keep in mind that in general, an underpaid employee is likely starting a job on the wrong foot with their employer and probably has a bad taste in their mouth from the beginning. Accepting an initial offer that is not to your full satisfaction can lead to this outcome.
When going through the job application process, the applicant’s end goal is getting hired. However there are many steps in the process, usually multiple interviews, stretches of waiting, emails exchanged, and hopefully offers exchanged (and more likely than not, rejections received). According to TalentWorks, It is a process and for many jobs, it takes on average more than 150 applications to land a job. The last piece of advice related to mindset, is to adopt the team mentality early on. When a jobseeker is applying for a position, they are hopeful to join the team. Start acting like a team-player from the beginning and that will assuredly help the process for everyone. Like any team, communication and flexibility is key to success.
Timing is Everything
During the job search process in general timing is so important, when your resume is received could be more crucial than the content of it, or your past experience. Being able to fill a hole at the right time is so incredibly important to employers that it can surpass other factors. However, it is not only the timing of your application, but also the timing of your conversations during the interview process is important. As an example, talking about salary too early in the interview and negotiation process is a common mistake from jobseekers. When you are interviewing and looking for work, you become more valuable as the interview process continues. The more time and energy (and money) that a company puts into interviewing you, the more valuable you become. At the beginning of the interview process, both parties (the job seeker and the employer) do not know each other very well. The job seeker does not fully understand what the job entails, and the employer cannot fully grasp what the job seeker can bring to the table upon a first impression.
If a question is asked early in the process like “What sort of compensation are you looking for?” or “What range are you looking for?” politely defer the question and say that you want to make sure this is a good fit for you before talking compensation. Or perhaps you could say that this is a joint decision you will be making with a partner and you would like to discuss with them first what would make the most sense given your current financial situation. If they are pushing for an answer, it is ok to tell them what you are currently earning, or what you most recently earned, and that you are confident that if this is a good fit, then you can certainly come together and find a number towards the end of the process that is amenable to everyone involved.
If you get to the point where a verbal offer is given, that’s a great sign! That means they like you and want to invest in you! Also at this point your value is at its highest point to the company and you can use this to your advantage. In most cases an initial offer is meant to have some flexibility. Here is your opportunity to negotiate and cement the verbal offer into something more tangible that will work for everyone.
Likely the company has given the jobseeker a timeline of when they would like a response. Stick to this timeline! Worst case scenario, if you are late the offer could be rescinded, and best case scenario, you are starting the job off on the wrong foot as you have missed your first deadline!
Depending on the company, the offer can be fairly straightforward with a base salary and medical benefits, or it could be more complex and include performance bonuses, commission, equity, or other incentives or perks. Upon receiving an offer, take some time and analyze if you believe this is a good fit for you. Some things to think about…
- Is this the type of work you truly enjoy doing?
- Is there a track for you to progress in the company? Where could you be if you stay with the company in 2 years? 5 years? 10 years?
- Is the commute (if there is one) amenable to your lifestyle?
- Is the salary suitable and in the range of what you were looking for?
- Are there any non-financial perks as part of the offer?
After you have thought this through…ask yourself if you really do want this job. If the answer is yes, then let the employer know that. Let them know that you want to make this work, and you want to join the team. If there are aspects of the offer you want clarification on, or would like to improve, then let them know that as well, but keep the same framework of “I want to make this work” and then dive into how the offer can be improved.
If you are looking to improve your compensation or total employment package, let the hiring team know how excited you are for the opportunity and include specific reasons why…this will let your sincerity shine through and create a much more open and welcoming atmosphere in the negotiation as opposed to an adversarial or combative tone.
Once you have established your excitement, let them know why you should be compensated more. You can use resources like glassdoor or payscale to see that you are being compensated appropriately and mention any research you have done. If you have any sort of special skills or experience that would be difficult to find in another candidate, mention that. If you feel that you are an especially good cultural fit, then use that in your discussion. The most important thing is to have a reason (better to have two reasons) as to why you should be paid more.
Second, outline what you are looking for. Is it a higher base salary, more vacation days, equity? Tie together your reasons why with your requests, and then highlight your excitement to get on board with the company and make it clear that if your requests are met, then you are happy to join.
Creative Ways to Improve your Compensation Package
Many times, there is only so much a company can offer in terms of a base salary. The hiring manager is likely limited to a budget that was set months or even years in advance and cannot exceed a certain dollar amount. However there are ways to work around these budgetary constraints.
With startup companies (especially in the world of eSports or Sports Analytics), they may be able to offer equity in the company, or stock options. If that is already on the table, a tactic could be to ask for increased equity instead of increased salary. This is great for a couple of reasons because it shows that you believe in the future of the company and that you are invested in seeing the company succeed.
Another possibility is asking for a signing bonus. A signing bonus is usually not in the same budget as salary, so this could be a workaround to make the new hire appreciated and well compensated, while allowing the department to stay on budget. Along similar lines, it is completely reasonable to ask about performance reviews and possible bonuses as a result of positive performance reviews with your manager. Companies differ on whether or not they would be able to put a structure into writing in your contract, but most do have a pay scale and development plan for employees.
There could be other perks available. Maybe it is tickets to sports events or a membership to a sponsor of the organization. Is there a company car available for you to use or a transportation stipend available? Does the hiring manager have the ability to increase the number of vacation days in your contract? Are there industry conferences you would like to attend on behalf of the company? Is there any kind of professional development you are looking to pursue that your future employer could help subsidize? Also look at what is important to you…is working from home on certain days appealing? This could be a great (and cheap) way to improve your work situation and allow the company to give you the flexibility you need to do your job well.
Tips from a former hostage negotiator
Chris Voss has a decorated career with the NYPD and FBI. He has spent more than 20 years working in the FBI Crisis Negotiation Unity and at one point was the FBI’s Chief international hostage and kidnapping negotiator. He now runs a successful consulting firm, The Black Swan Group Ltd and published a fascinating book called Never Split the Difference which I highly recommend. He dives into successful techniques that he and his colleagues developed over his storied career.
In his book, Voss breaks salary negotiation into 3 techniques:
- Be pleasantly persistent on non-salary terms.
- This creates empathy with your future employer and also creates a positive atmosphere which should lead to a fruitful negotiation.
- The more you talk about non-salary terms, the more you will learn about what options they can offer in terms of perks and benefits, and if the company cannot meet your non-salary requests, they may offer more money as a result.
- Define success for your position and metrics for your next raise.
- This is “free” for your current employer and meaningful for you.
- It gets you a planned raise and creates a positive relationship between you and your supervisor in that you have an excellent understanding from the get-go as to what is required for people to be successful in this role.
- Spark your employer’s interest in your success, and gain an unofficial mentor.
- You should approach the negotiation as a way to sell yourself and your success, and do it in a way that will make your supervisor look good.
- You want to be an asset to your employer in that you will be an ambassador to their department and their wise decision-making. This gives your mentor a stake in your success.
- “What does it take to be successful here?” is a critical question that you should ask during an interview. Once this advice is given, it should be noted that they will likely be attuned to whether or not you follow their advice. If you follow their advice, stay in close contact, and ask for more advice, then you have just gotten your first unofficial mentor who will have a stake in your success.
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