Part 4 of 4: Negotiations
The final act of acquiring the promotion you have long-desired is the negotiation of acceptable terms. For some, this involves the company extending an offer, a quick look at a dollar figure, and a quick, enthusiastic affirmative response. An unbecoming and self-defeating course of action, quickly accepting whatever terms the company has proposed diminishes your earning capacity while marking yourself as a weak businessperson. A person of dignity, worthy of respect and capable of leadership, will not acquiesce without efforts to secure more favorable terms.
A job offer is the first company’s expression of interest in you as a potential employee. As with most offers, the first will not likely be the most lucrative. You have invested considerable time and effort into acquiring a position because the benefits of the job exceed the costs. While you may not have actively or consciously acknowledged and considered these cold economic principles, they are real and vital. To fully invest yourself in your work, you must feel adequately remunerated, this requires negotiation.
Negotiation is an art founded in science. The language of compromise is the poetic expression of business jargon; we mingle emotion and principle to excite the sympathies of our contextual adversary and bend their will to our cause. The fundamental elements of our negotiating position have nothing to do with emotion or creative expression; they are the tangible benefits our labor offers the company.
A sound negotiation strategy will benefit both employer and employee, creating favorable conditions for maximum productivity with an appropriate and satisfying compensation package. Our discussion of negotiation will assist you in developing and executing such a strategy while avoiding costly mistakes and miscalculations. To begin, we must understand the rules of engagement.
A Second Date
If the interview is analogous to a first date – a lot of getting-to-know-you talk and some flirtation, but neither side is revealing too much – the job offer negotiation is the second date. Second dates are more perilous because we have established some mutual interest, but neither side is committing yet; we know what we want, but how do we get it? Both parties will be revealing more substantial details about their personality, character, desires, and fears. You want to maintain a professional, cooperative posture even as you actively press the other person to give up something you want.
What we do before walking into a negotiation will largely determine our success. If you decide to haphazardly approach the hiring manager and demand a higher salary, you will fail. Proper preparation will not guarantee a favorable outcome, but at the very least, you will lay the groundwork for future growth.
We first want to create a profile of the company. If you heeded our advice in Part I [hyperlink], a significant amount of the research is already completed. We now want to delve further into the nuances of the specific job being offered. Begin by going to the Human Resources department and asking for the official position description for the job. If one does not exist, you have more freedom to be creative in your argument because the company does not have a formal outline of duties and responsibilities; tailor your argument to your personal strengths. Assuming you can acquire one, the position description will form the framework of your proposal, tying your skills and experience to the stated objectives and requirements of the job.
While visiting HR, you also want to get whatever official compensation policies they will give you. You are likely to encounter resistance; some charm and cunning will prove useful. In sophisticated corporations, nearly all jobs are classified into salary bands or grades with minimum and maximum salaries. Advancement from bottom to top is dependent on years of experience and performance-related awards. Initially, your position in the scale will be based on your prior job experience. An argument for advanced education can be made, but will have to relate directly to the job.
If you cannot get specific salary information, research more general trends online. The Bureau of Labor Statistics provides industry data by geographical area which gives you a useful barometer of the market. For economists, labor is similar to any other commodity – it has a market price and is subject to fluctuation based on supply and demand. Knowing the current market for your skills will help you set proper expectations for your salary demands.
The second step in preparation is profiling yourself. Even if you missed Part II [hyperlink] you will have done the majority of this work while preparing your resume. The specific task now is to price your skills, knowledge, and experience relative to what you know about the company’s compensation policies and the market. This is a comparative exercise with a fair amount of guesswork so we are interested in creating a range of reasonable expectation, not a hard salary figure. If market data shows the median salary for similar positions in your market is $70,000/year, you are not likely to secure $90,000 for a promotion. The median salary will reflect what someone with several years on the job is making, not a starting figure. A reasonable starting range is $60,000 – $80,000.
If there is considerable demand for qualified people in this position, exceeding current supply, companies will be motivated to overpay to attract. If there is excessive supply – many people with your skill set seeking employment – companies will offer less, knowing they have alternatives if you decline. Augment your range based on this information.
The third step is to catalogue the non-compensation factors influencing the desirability of the job. These vary based on personal preference, but typically include location, schedule, office environment, co-workers, management, leave policies, holidays, insurance benefits, retirement, company discounts, offsets for costs (parking, tuition, child care, etc), training, and advancement potential. All of these benefits are potential negotiating factors. List each factor’s relevance to your current situation and project your near-future. Child care subsidies may not benefit you today, but if you are planning to start a family in the next five years they will become extremely valuable. Weight the factors according to significance and give each a value you would be willing to subtract from your desired salary to obtain. For example, if you wish to make $80,000/year, how much would you give up for an additional week of paid vacation? $5,000? $10,000? In negotiation, you may find yourself confronted with such choices and you want to have a ready response to ensure you come away satisfied.
Finally, you want to gather as much information as possible about the person you will be negotiating with. In many cases, the hiring manager will also be your immediate supervisor and while they have some influence over your compensation, the ultimate budget approval for the department is several coffee pots above his pay grade. Knowledge of the person will inform your decisions on how to approach the negotiation in tone, level of aggressiveness, and setting future meetings.
Your preparations are complete when you have an educated estimate of the way the company values the work you will be doing, your specific value relative to others doing this work, and your personal desire for employment benefits beyond the salary.
With proper preparation, we can now create a plan of attack. The goal is to convince the company your particular value exceeds their initial estimate based the principles they use to evaluate pay. Demonstrating direct correlation between your education, prior experience, and past performance and the job requirements of the position will enhance your negotiating stance. Arguments for unqualified claims of ability (anything you cannot directly point to a real example to illustrate) are useless and indicate immaturity of thought.
With your skill set established, next you want to add value. Discussing current market conditions and median industry pay show you are well-researched and aware of other job options. If you have other offers you are considering, do not reveal specific details. Compensation information is a trade secret, vital to the company’s competitive health, and you do not want to compromise your integrity. If you are willing to betray company A to company B, company B can only assume you would betray them as well. Show the company you have thoughtful and well-supported logic behind your salary request based on current market conditions.
Anticipate failure. If you cannot secure a pay increase today, negotiate for tomorrow. Pay increases are typically tied to performance evaluations, the first of which will often occur after your first year on the job; ask for a review after six months, with the accompanying pay increase assuming you are meeting expectations.
Your position will be strong if you have effectively displayed how your skills fit in the marketplace. Now you close the deal. Asking for the sale can be nerve-wrecking for those not used to open negotiation. You must build confidence in your preparation and plan. To do so…
If your idea of practice is pacing the hallway moments before your meeting mumbling to yourself, save everyone some time and just accept whatever they offered, then go reevaluate how you are living. The best plans inevitably go awry and so we must practice to safeguard against bad decisions made in moments of duress. Negotiating anything is stressful because the stakes are high. With future employment and earnings on the line, your quality of life hangs in the balance. Practice implementing your plan.
Enlist the services of a mentor, if possible; a colleague or business associate, if available; or a friend or spouse, if all else fails; to act as the company’s negotiator. Develop a working script, a flow of dialogue enabling you to articulate the key points of your salary request with lingual grace and proper grammar. Practice maintaining a smooth rhythm and cadence in your speech. Avoid words of absolution like never and always. Contain your emotions and be professional at all times. Practice maintaining good posture, keeping eye contact, and the rhythm of your breathing. Practice your handshake, firm and confident.
Prepare for contingencies. What will you do when the conversation begins with an immediate and unwavering no? Is there a minimum salary below which you would decline the job? How will you transition from pay to benefits? What will you do if your kept waiting for a half-hour before the meeting starts? You cannot plan for everything, but you can anticipate the more likely potential issues and prepare an appropriate emotional response.
You are ready. You have prepared, planned, and practiced. All that remains is the performance itself, to do the business of doing business. As a professional, this is the life you have sought. Negotiation and confrontation are part of the daily grind. We hone our skills, build confidence, and execute.
Winning the negotiation is more than securing a salary offer you desire. You are laying a foundation for future interaction. The person you negotiate salary with today, you will negotiate salary with in a year. You are beginning a conversation and a relationship that will loom large in your immediate professional future. Ask for more than they will give. Be cordial and polite. Take your victories and defeats with grace. Do nothing which would damage your personal brand. Live up to your good reputation; reinforce their decision to offer you the job.
The job offer will feel like victory; your work is not done. Negotiation can be intimidating and overwhelming, if you are unprepared. Understanding what the company is offering, how they made their determination, proper inventory and value of your skills, a plan to counteroffer, and the confidence to make a professional pitch will enable you to get more value for your work. If you are prepared and know your brand before you negotiate a job offer, you will exude confidence and professionalism during a productive, lucrative job offer negotiation.
Congratulations, you are one step closer to being a Dignified Devil.
+++Related Links: The Business Man’s Handbook: How to Earn a Promotion – Part 1, Part 2, Part 3 and Part 4