Before you begin to discuss compensation with an interviewer, be aware of your bargaining power so that you can plan the extent of your negotiations. Obviously, with a strong position, you can enter negotiations with greater confidence in yourself to get your asking price.
Following are the nine conditions of both a strong and a weak bargaining position:
Strong Bargaining Position
- You are in a seller's market. The law of supply and demand is in your favor, with great demand for your job specialty but low supply.
- You come highly recommended, with your reputation preceding you.
- Your written credentials are outstanding. They show success with other firms, rapid growth, and a great future.
- You possess knowledge of industry-and-company going salary ranges. You are aware that most jobs do have a range which can be negotiated.
- You are currently employed and have no sense of urgency to leave.
- You have other good job offers.
- You have thus far avoided salary discussion and have, instead, successfully sold your credentials.
- You possess knowledge of *'how to get a job."
- You are effective in face-to-face selling situations.
Weak Bargaining Position
- You are in a buyer's market. The law of supply and demand is in the buyer's favor, with little demand for your job specialty but high supply.
- You will get poor recommendations.
- Your written credentials are very bad. They show a history of job-hopping, zero growth, and a sad future.
- You have no idea of salaries paid for this type of work.
- You are currently unemployed and feeling desperate.
- You have no other job offers and your prospects are bad.
- You have prematurely disclosed a low salary history and have required a high salary goal.
- You are totally ignorant of the job-getting process.
- You should never have been given a job interview in the first place.
Initiating Salary Discussion
At the proper time-perhaps during the end of the second interview or during the third interview-the interviewer may express serious interest in bringing you on board. This is the cue to discuss compensation. Generally, such discussion can be initiated in the following three ways:
- The interviewer requests information about last salary and desired salary.
- The interviewer states the salary figure and may seek your approval.
- You ask the interviewer for the salary figure.
In negotiating for top dollar, it is best to get the interviewer to state the intended salary and thereby open negotiations. If you intend to negotiate, consider the interviewer's statement of salary, not as a rigid and fixed figure, but rather as an offer that can be discussed and possibly modified. The figure that the interviewer states may be far greater than you expected then you can be proud that you didn't open first with a lower asking price. Remember, if you sold yourself well, it is possible that the interviewer will price you in the upper portion of the salary range rather than in the lower portion for fear of insulting, embarrassing, and possibly losing you.
Then, of course, the opening figure may be too low for you. But with a strong bargaining position and using the proper negotiating tactics, you now have the opportunity to negotiate the first offer up to a more reasonable compensation figure.
If you successfully postponed the request for premature salary discussion, the interviewer may initiate salary discussion at this point by repeating the earlier questions. But now it is appropriate for you to handle these questions.
In response to the interviewer's question ''What salary do you require?'' attempt to ''throw back the question" and get the interviewer to say what figure or range the company is planning to pay. If you are successful and the interviewer opens negotiations, you have won the advantage of being able to negotiate from a known figure.
On the other hand, if you desire to move forward quickly and possess a strong bargaining position, you may state your financial requirements directly.
Here are a few ways to state your requirements:
- State a range that overlaps the top portion of the actual range and then exceeds it. For example, if the actual range is $35,000-$40,000, state a range of $38,000-$43,000. This provides for an opportunity to negotiate at the top of the actual range and even creates the opportunity for being moved into a higher job classification with a higher salary ceiling.
- State a request for at least a 20% increase in base salary, and possibly more if your bargaining position allows it. By remaining and growing in the same company, you can anticipate an annual average salary increase of only 5% to 8%, Obviously, one important reason for a voluntary move to another company is the financial inducement of the initial increment. If you are unemployed or in a job which will soon be eliminated, your bargaining position is seriously weakened. In this instance, shoot for the recommended figure of 20%, but in reality be prepared to accept less.
However, if your current salary is poor, and this is a major reason for seeking another job, revealing this information may lead to a low salary offer. In such a case, consider giving your total financial package: *'My total compensation package with Good News Publication amounts to $27,000." Upon further inquiry by the interviewer, you may give a breakdown of this package, indicating base salary, bonus, etc. Explain your desire to be compensated according to your actual worth. You can also give reasons for your current compensation, indicating that on your current job, compensation and growth opportunities were limited because of internal conditions of the company.
An interviewer may say, ''John, I believe you will find the annual salary of $22,000 to your satisfaction. Of course, you would also be receiving a fully paid up life insurance plan, full executive purchasing privileges, and a good annual bonus," or "As originally stated in our classified ad, this position pays $12,775 per year to start!" Remember, no matter how the interviewer states the job salary, if you possess the bargaining position and want to negotiate, and then consider the figure as an offer instead of an ultimatum. From here, you can make a counteroffer.
If the interviewer does not initiate salary discussion once an offer for employment is given, it is your responsibility to do so. A basic part of discussing a job offer is the discussion of compensation. You may initiate discussion this way: ''Now that you have decided to invite me to join your staff, 1 would appreciate hearing about the compensation package you have in mind. I'm sure it will be fair and acceptable."
In addition to discussing base salary, you should also discuss other parts of the total compensation package at this time. For executives, non-salary benefits can amount to a significant portion of the total package, including bonuses, pensions, club privileges, insurance, car use, stock options, and more. Therefore, be sure to clearly define those non salary benefits before making any formal decision to accept an offer.
It is possible that at the end of an interview, the interviewer may say, ''Mr. Holmes, you are a very attractive candidate for this position and can expect to receive our decision by mail within a week.'* This job-offer letter may convey the starting salary along with the job offer. If an initial salary figure is conveyed by letter rather than in person during an interview, you do have somewhat of a problem in opening up negotiations if the salary figure is too low. In this case, if your bargaining position is sufficiently strong, you may visit or call the interviewer to discuss the terms of the offer.
If you fail to persevere in such a case and either accept the written offer at the low salary or reject the offer because of the low salary, both you and the company are the losers. By following up and making the employer aware of the desire to negotiate a fairer salary, you will be giving the company an opportunity to satisfy your needs and in this way purchase your talents in a manner agreeable to both parties.
