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The Art of Negotiation

Information and advice you'll need to know before going into a salary negotiation

By the editors of gecc

The most important criteria to look for in a new job are a rewarding work environment, amiable co-workers, and the knowledge that you will be spending yours days working on projects that give you a deep feeling of personal satisfaction. For all of you who would like to eat three times a day, however, let's talk about how you can get that same position but for a heck of a lot more money. The following is a quick synopsis of some of the best information and advice you will need before talking numbers.


  • Negotiations can be one of the quickest parts of the job hunt process, taking place in less than a minute in many cases.

  • Assume every offer you receive will be negotiable. If it's not, you've got nothing to lose by asking.

  • There are two main types of companies in the world. The first feel that their first offer, is their best offer, and very often it is. Companies in this category do a lot of industry research, and honestly do their best to offer a fair, competitive salary. They find little advantage to low-balling and bringing in underpaid personnel, so negotiations with these firms are often halted quickly. Companies with this strategy are usually great employers. The second type of company is very accustomed to negotiations, and consider it to be an acceptable reality of the hiring process.

  • The employer is working from a company-determined range for each position. The salary range is divided into three roughly equal segments. The lowest third of the range is reserved for inexperienced workers who show potential; the middle third of the range is for competent workers; and the highest third is for people who bring something extra to the job.

  • Another range, called the hiring range, starts near the middle of the salary range and extends below the bottom figure. Hence, a job with a salary range of $32,000 to $40,000 may have a hiring range that starts at $28,000. In other words, an inexperienced candidate may be offered $28,000, while a competent applicant might be offered $32,000. In both cases, more money is available, but only if the candidate knows to ask for it.

  • Research has proven that the employer is most often not proposing the highest wage possible at the beginning of the offer. You will seldom receive more money unless you ask for it. No request, no raise.

  • Don't screw yourself from the get-go. Many company request your salary requirements with your resume. Do not include them. Very few companies will hold it against you, and this information is only to their advantage. If your number is too small, there is no room to negotiate, and if it's too high, you won't get a call back.

Preparation:


  • Preparation is probably the single most important part of successful negotiations. Any good trial attorney will tell you the key to presenting a good case in the courtroom is the hours of preparation that happen beforehand.

  • The motivation is easy. In exchange for 2 hours of preparation, you could might walk away from the table with $2000 or more in salary—not a bad pay-off for a small amount of time.

  • Granted, it's a complete pain in the ass, but every job seeker should put together a rough personal budget, keeping in mind that things like income tax, loan payments and health care will probably account for a huge chunk of each paycheck.

  • Determine three figures: how much money you think you need; how much you want, and what you think you can live with.

  • Be sure you know exactly what you want, not approximately. Clarity improves communication, which is the conduit for effective negotiations.

  • Justify your needs to yourself, and you will be confident enough to get it.

  • Gather as much factual information as you can to back up the case you want to make. For example, if most entering employees cannot negotiate salary you may be jeopardizing the offer by focusing on that aspect of the package. Turn your attention to some of the other more flexible parts of the offer in order to sweeten the deal, such as your health plan, dental plan, retirement package, the type of schedule you prefer, etc.

  • Review what you know about your contact's communication style and decision-making behavior.

  • How will you respond to counteroffers? What are your alternatives? What's your bottom line? In short, plan your strategy.

  • Have someone, preferably an experienced business professional, critique your reasoning.

Resources:


What You Need to Know Going In


  • You'll have more negotiating power if you have specific programming or engineering skills, internship or co-op experience—anything that has demonstrated or tested your professional skills.

  • Requesting a salary increase because you are a fast learner, or have a high GPA usually are not justifiable reasons in the eyes of the employer.

  • Always wait until a job has been offered before you begin negotiating.

  • Always begin by expressing genuine interest in the position and the organization.

  • Often, your initial contact person will come right out and state: "This position's salary is $32,000; everyone starts out at that figure." Don't let this discourage you, every single salary is negotiable. Express your enthusiasm for the position, the company, and its work environment, and then calmly explain how that salary comes out on the low end when compared some of the other positions you've been considering.

  • The key is to keep the initial interview conversation rolling without ever committing to an exact salary. Always leave yourself an out. For example, when pressed, mention that you'd still like to find out more details about the position because your primary concern is an exciting work environment, not money. This is, of course, not exactly accurate, but it keeps the ball rolling and sets up your position at the future bargaining table. The initial interview is kind of like dating someone without ever trying to commit to them. Guys should know all about this.

  • You will usually be up against someone who has much more experience with negotiating. The best thing you can do is take away their power. The easiest way to do that is to NEVER TELL THEM THE SMALLEST AMOUNT YOU ARE WILLING TO TAKE.

  • According to the Noel Smith-Wenkle Salary Negotiation Method, the first time they ask you how much you'll take, reply: "I am much more interested in doing (type of work) here at (name of company) than I am in the size of the initial offer." If they press you again, reply: "I will consider any reasonable offer." These are worth memorizing.

  • Whoever mentions the first price, usually loses the battle. After they are forced to name a figure, NEVER jump right on top of it. Research shows that if you acknowledge the offer, contemplate it for a few seconds, and then explain how that figure is smaller then you had expected, the hiring manager will almost always immediately offer more. Remember: he or she has usually been given a little leverage to make the hire.

  • Compare it to your "secret bottom line." You can always give in and accept the offer. With a little hesitation, however, you may be able to get way more than you had expected.

  • Try to avoid expressing that you need the figure to be X amount higher. See if you can get by with simply saying "higher."

  • If pressed, defend your proposal with your work-related skills and positive benefits to the employer.

  • You can always negotiate more than just salary. Benefits can add thousands of dollars to the compensation package. They include paid personal leave, discounts on the company's products and services, health insurance, paid vacations, personal/sick days, child care, elder care, use of the company jet for family emergencies, disability and life insurance, retirement plans, investment or stock options, relocation costs, and tuition credits for continued education. One of the biggest trends in today's hiring market are signing bonuses.

  • If it makes you more comfortable, submit your initial request in writing and plan to meet later to hash out the differences.

  • Keep in mind that the employer has chosen you from a pool of qualified applicants, so you are not as vulnerable as you think.

  • Remember that this process should be a smooth one, and that success is determined by how well you break down the barriers that crop up when two people take sides.

Sources:

Lily Maestas, Counseling and Career Services, University of California.
Amy Lingren, Knight-Ridder News Service.
David G. Jensen, Search Masters International.
The Noel Smith-Wenkle Salary Negotiation Method.
Jack Chapman, Author of Negotiating Your Salary.

Recomended Books:

Negotiating Your Salary: How to Make $1,000 a Minute, by Jack Chapman (Ten Speed Press).

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