Salary Negotiations: The Initial Offer and Your Response

When negotiating salary or other benefit, you are also negotiating the foundation of a relationship, so you want to get off on the right foot. You and the employer must come to an agreement that you both feel is fair.

If you have multiple job offers, you can sharpen your negotiation skills. Practice with a company you are indifferent about working for. If you are feeling confident, try for the company with the best offer. Remember, if they are negotiating, then you are the leading candidate. Use this power to your advantage.

The following are the best steps to take when negotiation begins:
1. Do not negotiate until you have an offer in writing. Let the employer go first with the offer. However, if they ask you first, tell them your salary range (that you determined with the Considerations in this handout).
2. Restate their offer, and then process it. Keep an honest yet non-emotional response (including body language) based on your research.
3. If it is less than you expect, indicate that it is lower than you expected per your research. Be prepared to verify the sources of your research.
4. Counteroffer with your research-based response and desired range. Remain objective, optimistic, and polite.
5. Never accept an offer right then and there. Ask when they need to know your decision. A respectable company does not ask you to respond immediately.

Their Response and Your Arguments
They may have to consult with the company and get back to you. Rarely do they withdraw an offer because of a counteroffer, but they may if the company is reorganizing or downsizing. Hopefully the employer returns with a satisfying offer. Otherwise, they state their objection and the offer that stands.

Numbers always work in salary negotiation just as they do in your resume. Never give subjective or emotion-based arguments like, “My co-workers really like me” or “I deserve it”. Give undeniable business-related numbers such as, “I increased annual sales by $25,000″ or “As vice president, I’ve reduced my department’s employee turnover by 40%”.

Handling Common Salary and Raise Objections
You may hear the following objections. Here are some methods for overcoming these:

Their Objection Your Response
1. “That’s not within our budget for the job.”
-or-
“That’s all we have allocated for the job.”
• Communicate your value to the employer.
• Convince them to revise the budget allocation for the position.
• Point out that the amount is below market value, using your researched range (not an exact amount).
• Show your interest in the job, but mention that you cannot justify accepting less than the market value.

2. “Other employees with similar qualifications and experience aren’t paid that much.”
-or-
“You’d be earning more than others in this type of position.”
-or-
“No one else has received a raise, so why do you think you should?”
• Persuade them that you should earn more because you are worth more. Give specific examples to support your argument (e.g., more advanced degree or more experience than others).
• Suggest that they give you a different job title so you fall into a higher salary bracket. Offer to take on additional responsibilities to offset the higher salary. Usually big companies are not quick to blur job titles and salary levels. But smaller companies not using formal pay-grades may be more flexible to this.

3. “Your salary history does not justify such an increase.”
-or-
“That’s a lot more than your last salary.”
• Stress that you expect to be compensated for the value of your work and what you plan to achieve within the organization. Help the employer realize that previous salaries are unrelated to this job. Try using these responses in terms of your situation:
• “Yes, I earned less at my last job. However, I held that position for 3 years and the experience I’ve gained certainly warrants an increase.”
• “What I’m paid is below market rate. That’s one reason I’m looking for a new job. Because of my skills and recent degree, I don’t want to accept anything less than market value for a new job.”

4. “You haven’t been working for a while.”
• Do not let them assume you are willing to work for less, need retraining or are desperate for a job. Let them know that you offer as much as those with current experience.
• Stress that your endeavors away from work (training, education, volunteer work, personal projects) enhanced you as an employee.
• Accept a lower salary and request a performance review in 6 months. Ask for a guarantee that if you meet your goals, they will increase you to the market value.

5. “I’m sorry, but it’s our policy not to negotiate.”
• Look into whether this is true about the company. If it is true, you may have no choice. If might not be true, say, “I understand you don’t normally negotiate salary. But I am an exception, because…”
• Negotiate for better non-cash benefits.

Final Offer
Know when to quit. If you sense the employer getting frustrated with your proposals or states that this is all they can do for you, stop and evaluate the existing offer. Do not give the impression that you are impatient or greedy. You may annoy the employer if you push beyond their limits, and they may withdraw offer.

When they come back to you with their final offer, be ready to evaluate and decide to accept or decline. Once an offer and package is agreed upon verbally, always make sure they are going to mail it to you in a signed, written document (an “offer of employment” letter).

Other Negotiables
Salary is not the only area to negotiate. If the employer rejects your desired salary or in certain jobs, industries or companies where salary is non-negotiable, you still have other options. These other options may be more important to you and might be negotiable.

To better prepare and negotiate, you may want to ask their HR department for information about benefits and options available. These can include:

• Bonuses (performance-based)
• Performance reviews (including timing and percentage)
• Health, dental, life and disability insurance
• Retirement or pension plans
• Vacation and sick days
• Work-from-home days
• Tuition reimbursement
• Overtime policies
• Profit sharing plans
• Stock options
• Employee discounts
• Company car and expense accounts (like commuter expenses)
• Relocation/moving expenses
• Termination contract
• Professional association or gym memberships
• Certifications
• Childcare
• Sign-on bonus

You Can Only Change the Present

Follow my instructions for one moment: I command you to: Sit down! I command you to Standup! If you want to standup you must do it in the present. Your physical power is only in the now. You cannot stand up in the past. You cannot stand up in the future. You can wish you could stand up a month ago. You can wish you could stand up yesterday. You can think about standing up tomorrow. But you can only physically stand up right now. This illustrates the point that you have no power to change anything in the past and you need not worry about the future. What you can do is change your thoughts about what has happened in the past. No one has the power to change your thoughts except for you. You can feel guilty, sad, and angry about past events, but none of those feelings will change your present. If you let those feeling overwhelm you, then they can paralyze your actions. But just as your thoughts can paralyze your actions, your thoughts have the ability to move you forward in the present.

You must decide that you are here now. The successful accomplishment of your dreams and goals requires acknowledging that you are now where you are. Accept that where you are now is ok, at least for now. Obviously you wouldn’t be reading if you didn’t want to change things about your life, but for now accept that you are here now and nothing can change what has gotten you here.

You hate your job
You are overweight
You are in a bad relationship or abusive relationship
You have a handicap.
You have no confidence.
You feel unattractive or unloved.
You are financially broke or are in debt.
You have problems with your children
You have problems with members of your family.
You have no true friends.
You have no job

All of the above can be make you feel overwhelmed, but it is where you are now. If you are a mountain climber, it is important to know that you must firmly place yourself in one place before you can begin to raise yourself to the next step. If you tried to climb while, looking down you will be overtaken with fear, If you try to climb by looking up, you will get overwhelmed with all that is ahead of you. You must only focus on where you currently are in order to move ahead. You don’t want to get stuck on the mountain of life. You will starve, get weak, and fall off. Learn to reach for the next ledge and pull yourself up on inch at a time.

It is OK to be upset or angry with your current situation, but only as a way to create you to make positive changes and change your current situation. You cannot feel sorry for yourself because the rest of the world does not care. The rest of the world has its own problems. Whenever you feel yourself caught up in the emotions of guilt, anger, and self-doubt, say to yourself. “I am here now, now what? “This does not determine where I will go or what I can be” Then pick a course of action to move your forward to the future that you want.

Seven Habits of Superior Negotiators

Superior negotiators come in all genders, shapes, and sizes, but they tend to have a few things in common. Here is my list of the seven habits of superior negotiators:

1. A superior negotiator is always prepared. Abraham Lincoln said, “If I had eight hours to chop down a tree, I’d spend six hours sharpening my ax”. This is definitely the mindset of the superior negotiator. They think through the potential options ahead of time.

2. A great negotiator focuses on the interests of the other party. Rather than obsessing about what he or she wants, a great negotiator invests time in understanding what motivates the other party and why certain things are important to them.

3. He or she is willing to walk away. By knowing the bottom line of what is acceptable and by knowing the next best alternative, a strong negotiator is empowered. This takes the guess work out of the negotiation and focuses the agreement on what might be acceptable.

4. A great negotiator is open to new ideas and is willing to brainstorm on the spot with the other party to discover other options. Brainstorming involves some personal risk, but it makes for better agreements.

5. Listening skills are a prerequisite for an outstanding negotiator. This means not talking; in fact, outright silence is often a great choice.

6. Superior negotiators are realists. They are willing to compromise and they tend not be greedy or mean spirited since they want the opportunity to do business again. Relationships are valued.

7. They are willing to work to get the right deal and are exceedingly patient since a good deal takes hard work and time to create. This could mean multiple meetings or many phone calls.

Are you a superior negotiator?