Jim Bretl, director of career services at Marquette University in Milwaukee, Wisconsin, likens the current employment scramble to the NBA, where team owners vie competitively for the best players.
If you're a manager in the National Hiring League of America, you are looking for employees in the hottest U.S. economy in nearly 30 years. New MBAs (especially from prestigious business schools) aren't the only ones on the receiving end of this employment frenzy: engineers, top flight chemists, and computer programmers are all in demand. So are teachers. In fact, you may be surprised to discover that, along with the economy, some formerly off-limit fields now offer lucrative and interesting opportunities. For example, professionals who once shied away from teaching because it was too hard to find a good paying job may be pleased and surprised to discover that, in an effort to compete with private industry for bright and talented candidates, some public school districts have initiated signing bonuses that are designed to lure qualified mid-career employees into the classroom.
So, too, with certain areas of health care. An experienced occupational therapist in North Carolina says that health-care employers routinely pick up the tab for her rent in order to entice her to sign on with them. That's why she didn't hesitate to leave one position without having another one: she already knew that the employment statistics were on her side.
For job hunters who want to change careers, the time is also right. Because employers are scrambling to hire qualified talent, they often are willing to hire and train people who may not have the exact expertise they're looking for.
All of this talk about how great the economy is can be misleading. While some fields are booming, the market for others is as stale as ever. Before venturing into the job market voluntarily, it helps to know how marketable you are and the amount of movement in your occupation of choice.
Jerry Hannigan, an experienced mid-level marketing manager with more than 20 years in a variety of industries has discovered that positions at his level are every bit as scarce as they were in the 1980s when he was first downsized from AT&T. Like many corporate employees who lost jobs during the downsizing heyday, he has had trouble finding positions at his former level of responsibilities and compensation.
Evanston, Illinois, career consultant Kathleen Voss sympathizes with his dilemma. She believes that many experts have over generalized about how great the job market is.
"It isn't great in every area," she says. "It depends on what you want to do." For example, it isn't a great market for psychologists in private practice--thanks to managed health care. Nor is it particularly terrific in some areas of banking where constant reorganization and consolidation have shrunk the market considerably. Investment banking demand may be great (especially for MBAs from, D top schools) but it still depends on what part of the investment banking field you're trying to enter.
Voss cites an example of an investment banker in Boston who, as a senior vice president in insurance, was involved with managing trades. Despite her University of Chicago MBA, she was unemployed for a year after leaving her job. It's wasn't that she didn't have offers. She was simply unable to find a job in the financial community commensurate with her abilities and salary requirements.
"It's a mistake to blatantly talk about the market being so great," says Voss. "Sometimes it's hard to match what you had before."
Chicago outplacement consultants Margaret Bernstein and Noah Bernstein agree. "It may be an open economy for a lot of people," says Freeman, "but not for everyone." Adds Morrell, "The larger the salary, the harder it may be to move."
The important thing is that you take the time--and make the effort--to understand your particular piece of the employment market. Then, when you and your future employer are ready to talk money, you won't sell yourself short or make unrealistic demands.
Although you may be tempted to take advantage of an employer's urgent need, conducting satisfying and successful salary negotiations isn't a win-lose game. Your goal is to help create a mutually satisfying resolution between you and your future employer.
You'll need several tools to master this art form: a strategy that suits your personality and the situation, a well-developed sense of timing, effective communication skills and the right attitude. First, though, you need to understand your role.
At the beginning of the interview process, you're an unknown entity to employers. Because they don't know what you can do for them yet, early discussions of money are basically a screening device, a way to weed you out on the basis of affordability.
Establishing Value First
Your goal should be to keep yourself in the game longer. Even if the stated salary range is too low, the employer may be more flexible once you've established how great a contribution you can make. After all, labor is intangible; its value is in the eye of the beholder. After you've built value for your product, the company may be less resistant to the fact that it's expensive. People realize that quality costs--so first prove your quality and then name your price.
Questions about your salary requirements or history can surface as early as the initial telephone or human resources interview. At this point, you not only have no negotiating power, you may not even be talking to someone with the power to negotiate with you. Rather than box yourself in or screen yourself out, say that you're flexible, but need to know more about the position. (If the question is cast in terms of past earnings, convert it into a salary requirements question.) It's just too soon to raise a red flag over the issue of income.
You may not agree with my advice. After all, if the job pays too little, why waste everyone's time with further discussion? Simple: Because if you're a strong candidate and negotiator, the salary offer may improve significantly.
Think about the way people get to the point of buying something they can afford, says Jack Chapman, a Wilmette, Illinois, salary negotiations consultant.
Psychologically, such consumers go from thinking they can't afford an item to feeling they can't live without it, he says. As the urge to buy grows stronger they move from a position of rigid neutrality to more emotional desire. They start looking for ways to shuffle their resources so they can afford to buy and come up with creative ways to justify the purchase.
The same logic applies to employment decisions. Get employers enthusiastic about your candidacy and they may become more generous. Therefore, your first and foremost task is to establish your value. Make employers believe that they can't live without the contribution you'll make to their organization. Since you can't do that until you know more about the position and the organization, you should always try to defer premature salary questions.
Rick Ehlers suggests the following statement: "I can appreciate your interest in discussing salary but I'd prefer to defer the discussion until I know more about the position."
Another (more emotional) approach: "To be honest with you, I feel uncomfortable discussing money right now because I don't want to box myself in or don't discuss salary until there's an offer on the table.
In other words, focus the discussion away from the topic of money and onto the topic of job fit.
Dealing with Persistent Questions from Employers
Employers are not always so easily persuaded to abandon the topic of money. When employers persist, consultant Bob Maher recommends a "turnaround" strategy: "Ask them what range they've budgeted for the position."
This approach worked well for a $45,000-a-year computer programmer who was hoping for a 10 to 20 percent increase along with his job change. When asked his salary preferences, he responded, "Can you tell me what the job pays?" The interview replied, "We have a $45,000-to-$53,000 range." After that, all the programmer needed to do was nod and say, "That fits with my range."
But what if the range has been set too low?
You can say, "Thank you" and get up and leave; or you can get defensive and protest that you were making a lot more than that at your last job.
A better approach, though, is to reach for your homework and say, "Are you aware that similar positions generally pay in the neighborhood of $?" This strategy depersonalizes the situation, while also probing why the employer has set the range lower than industry standards. Knowing the employer's budgeting rationale can tell you a great deal about the organization.
Diversionary Tactics
Your task is simply to understand the employer's position and stay out of premature salary negotiations. Sometimes, you can do that directly. Having received a disappointing response to your turnaround question, you can follow up with another query: "Can you tell me how you arrived at that number?"
This strategy directly explores the employer's needs and priorities, which positions you to build value for your candidacy and thereby "up the ante." You can then easily return to a sell mode in which you continue to establish your value to the employer.
Another good option at this stage is to express surprise at the figure but keep an open mind. Then, lead back into a defer strategy in which you "agree to disagree" until you know more about the position and the organization. So far, you still haven't tipped your hand on your salary requirements (although you may have implied your goal).
Some employers may find evasions irritating. If an interviewer really persists, you probably should name some numbers rather than risk further irritation. But what numbers to name?
Here's a situation when doing your homework can really pay off. Express realistic expectations and needs by using salary surveys as a basis for your requirements. This will also convey to the employer that you know your value in the marketplace and are seeking it.
If the employer casts the question in terms of your salary history, though, you'll have to take a different approach. One option is to distinguish between past earnings and future requirements by saying, "I can tell you how much I was earning at my last employer, but until I know more about this position, I really can't tell you how much I'd be looking to earn here."
This response serves two functions: It disarms the employer by complying with the request, yet at the same time, it establishes a distinction between your past history and your future desires.
If you think you were underpaid in your last position, you may want to convert the salary history question into a worth statement. Rather than just state your final salary, make a "calculated disclosure" that reflects your entire compensation package, advises Maher.
Such a strategy could have worked well for the computer programmer described earlier who was hoping for an increase from his $45,000 annual salary. By calculating in his 401(k), pension and profit-sharing earnings, he could easily (and honestly) have told recruiters: "Last year, my position was worth $52,000."
Still, making such "worth statements" early on can be hazardous, Maher concedes. They may force you into negotiations before you've had a chance to display your value.
Usually, it's wiser not to reveal your previous earnings at all, says Ehlers. "What you made before may be totally irrelevant," he says. "You could be talking apples and oranges."
For example, a real-estate professional earned nearly $80,000 a year plus perks doing site selection for fast-food companies. But when the real-estate market collapsed, there simply was less need for this professional's skills. In keeping with the laws of supply and demand, he needed to determine a more realistic financial objective.
"It's your responsibility to research the marketplace and make some determination of your value to that marketplace," Ehlers says. "Then convert the past earnings question into a realistic dollars-and-cents figure."
Another possibility is to "agree to disagree" on the issue of salary. Just indicate flexibility and a desire to learn more and then revisit the question later in the game when you have a stronger negotiating position.
FRINGE BENEFITS ADD UP
Consider the total salary package. "Fringes" such as health-care coverage, vacations, retirement and profit-sharing plans can add 25 percent to a worker's salary.
The Moment of Truth
You've learned about the position and established your value, and the company genuinely seems interested. At this stage, a question about salary usually is a precursor to a formal job offer and the beginning of direct negotiations.
The time to defer is over. Now your goal is to get an offer on the table you can look at together. This time, in response to the question, "What kind of money are you looking for?" you can employ a new "turnaround" strategy with the statement: "Make me an offer."
Some employers may comply with your request immediately, or take some time to think about it. If a formal offer arrives in the mail or over the telephone, request an in-person meeting with the hiring manager to discuss it.
"It's too hard to read cues over the phone from someone's tone of voice," Ehlers says. "You need to look them in the eyes to pick up visual cues. Besides, it's harder to say no to someone face-to-face."
Other employers will say they need some financial information from you before they can formulate an offer. This can be an ideal time for a "worth statement," but precede it with a reiteration of your selling points. These will remind the employer exactly why you should be hired.
Once you know an employer really wants you, your first impulse may be to request the sun, stars and moon. Try to resist. Instead, name a figure that, based on your research, genuinely reflects the fair market price for your employment services.
An office supply company asked a senior systems analyst to produce two numbers before making an offer: the actual numbers on his pay stub and his "wish list" numbers. When he said "mid-50s" to the latter request, he was prepared to justify his desire with salary statistics he'd gleaned from a Source EDP study of what people in similar positions earn. As it turns out, the company met his "wish list" figures without asking him to defend them.
Consultant Jim Kacena suggests naming a higher number that leaves room for the employer to cut your request back. This is similar to what Nelson Harper's Dennis Huebschman refers to as "leaving some wiggle room."
Still, you must always anticipate potential objections and prepare rationales for what you want. Atlanta career counselor Mark Satterfield has identified three of the most common objections employers voice to high-end requests:
- Budgetary constraints ("We don't have the money").
- Your salary history ("You were only making $ in your last job").
- Peer pressure ("No one else at your level is making that much").
A sales rep who interviewed with a Delaware pharmaceutical company wanted $47,000 plus quarterly commissions, but the vice president of sales offered less.
She countered with, "Why do you feel my offer won't work for you?"
The manager explained that under the "old regime," others often were compensated along the lines of her demand. But the firm had discovered that when the base was too high, reps weren't as motivated to perform.
Understanding the situation enabled the rep to prepare a solid justification for her request. First, she encouraged the VP to recognize that some of her peers were still being compensated under the old system, so breaking precedent needn't be a concern.
Then, she focused on her personal situation. For her, it would be de-motivating to take a pay cut, she said. If motivation was the issue, then she'd be far more motivated by the knowledge that her paycheck matched her worth. Because she was an experienced salesperson, she didn't need to prove her value; she just needed to get the company to agree to pay her according to the standards used for its more experienced and committed sales reps. In the process, she illustrated the power of her sophisticated negotiation skills.
Says Mark Satterfield, "Always remember that your goal is to reach a mutually acceptable resolution, not to squeeze every last penny out of the company."
Kacena agrees, "Negotiate as a friend and equal, seeking a resolution that's fair to both sides."
One easy way to do that is to express enthusiasm and appreciation for the offer. This helps establish a context of commitment and trust from which to work things out.
Guidelines for Negotiation
Career counselor Linda Bougie recommends the following general guidelines for all salary negotiations:
- Be flexible.
- Concede minor issues.
- Dramatize your concessions, not theirs.
- State your desires in terms of their benefits.
- Look for suitable areas of compromise.
From a practical standpoint, it usually makes sense to negotiate in order of descending levels of importance. For most people, this means starting with actual base salary. After that, you can discuss performance bonuses, commissions, benefits and other perks.
Negotiating Styles
In general, your negotiation strategy should reflect your personality and work style. Some people choose a passive negotiating strategy. This approach selects out one area of concern (usually salary) and (nicely) asks for more by questioning, "Is that the best you can do?" without making any specific demand.
Should the employer express openness to your desire for more, you must be prepared with your demand and a justification for it. On the other hand, if the employer expresses an unwillingness to bend, the game is over. Discussion ended.
Another, somewhat more assertive, approach relies heavily on the techniques of clarification and silence. In this strategy, you go through the employer's offer on a point-by-point basis, clarifying each item on the list. Your response might sound something like this:
I'm here to accept your offer, Mr. (or Ms.) Employer. But before I do, let me make sure I understand it completely:
- You're offering me $55,000 per year. Is that right?
- I'll be reviewed annually with a standard cost-of-living increase, but no merit rises. Is that correct?
- You have a 401(k) plan with a 50 percent matching policy?
By pausing silently after each clarification, you can play on the employer's cumulative guilt to get more without ever asking.
Jack Chapman also advises using silence as a negotiating tool. By repeating the figure, he says, you let the interviewer know that you heard the offer and are thinking it over. But your body language conveys that you're not entirely happy with it.
The outcome, Chapman claims, is usually a concession to your unspoken demand for more. However, if you'd rather ask for what you want than guilt-trip an employer into providing more, try another, more direct, negotiating style. This approach requires a clear understanding of your financial and emotional needs.
Richard Keyster, a risk/loss manager who was laid off after more than 20 years with Aetna Life and Casualty Company, benefited from such self-knowledge when a central Illinois insurance company offered him a job. On learning that the package didn't include a company car, he remarked innocently, "I'm used to having a car." To his surprise, the company returned to the bargaining table and immediately offered one.
Often, though, it takes a little more effort to get what you want. Reviewing the employer's offer carefully with an eye toward potential holes often helps. Rick Ehlers remembers working with a national sales manager whose "sticking point" was relocation costs from Chicago to the East Coast. The executive brought in quotes from real-estate agents in both cities to justify a $15,000 salary increase. He got it. Obviously, playing "hard ball" isn't recommended unless you're prepared to say "no."
"You definitely have to know your bottom line and refuse offers that won't meet your needs," Kacena says. "But that doesn't mean you have to negotiate with pistols. You never want to demand a concession or deliver an ultimatum."
It's rare, but occasionally offers are withdrawn during the negotiation stage. A retail marketing executive who kept asking for "more, more, more" discovered this the hard way. After two weeks of greedily nit-picking his prospective employer, the firm decided (based on his negotiation techniques) that it had made a mistake and rescinded the offer.
Obviously, this candidate took his strategy too far and alienated the employer. By sending an "I'm-not-going-to-be-happy-here-unless . . ." message, he set up a win-lose situation. And he lost.
Actually, the conflict over money may have reflected a deeper emotional issue. In his previous job, the candidate had been vice president of marketing. The new position didn't carry the same title, which to him represented a step down the career ladder. Perhaps he sabotaged the salary negotiations because he couldn't own up to the real issue at hand.
Remember that net worth and self-worth are not the same thing. Confusing the two will only hurt your effectiveness. Rather than take low offers as a personal insult, view them as a challenge to your negotiation skills.
When an executive outplacement firm approached Rick Ehlers with a lowball offer, he used humor to push the numbers higher. "You don't want a professional," he said. "You want slave labor." The recruiter laughed and upped his offer.
Is there ever a time not to negotiate? You should always ask for things you feel are important to your career satisfaction. Many candidates mistakenly assume that salaries are preset and, therefore, nonnegotiable. This can become a self-fulfilling prophecy. If you don't ask, you usually don't get.
"Don't be afraid to negotiate because you think an employer will withdraw the offer," Kacena says. "In fact, most employers expect you to negotiate. Don't surprise them too pleasantly by backing off."
On rare occasions, however, employers may make offers that are music to your ears. Recently, without any prompting whatsoever, an industrial psychologist extended a dollar offer that was more than double my regular fee. While I didn't protest ("Oh no! That's way too much!"), neither did I feel the need to negotiate further.
The University of Chicago made news last year by disclosing that its 667 newly-minted MBAs can expect to walk into jobs with a record median salary of $120,000. That's up almost $10,000 from the preceding year's class median and up $40,000 from the class of 1996's. Robert Hamada, the Dean of University of Chicago's Graduate School of Business, attributes the jump to the laws of supply-and-demand.
Jim Bretl, director of career services at Marquette University in Milwaukee, Wisconsin, likens the current employment scramble to the NBA, where team owners vie competitively for the best players.
If you're a manager in the National Hiring League of America, you are looking for employees in the hottest U.S. economy in nearly 30 years. New MBAs (especially from prestigious business schools) aren't the only ones on the receiving end of this employment frenzy: engineers, top flight chemists, and computer programmers are all in demand. So are teachers. In fact, you may be surprised to discover that, along with the economy, some formerly off-limit fields now offer lucrative and interesting opportunities. For example, professionals who once shied away from teaching because it was too hard to find a good paying job may be pleased and surprised to discover that, in an effort to compete with private industry for bright and talented candidates, some public school districts have initiated signing bonuses that are designed to lure qualified mid-career employees into the classroom.
So, too, with certain areas of health care. An experienced occupational therapist in North Carolina says that health-care employers routinely pick up the tab for her rent in order to entice her to sign on with them. That's why she didn't hesitate to leave one position without having another one: she already knew that the employment statistics were on her side.
For job hunters who want to change careers, the time is also right. Because employers are scrambling to hire qualified talent, they often are willing to hire and train people who may not have the exact expertise they're looking for.
All of this talk about how great the economy is can be misleading. While some fields are booming, the market for others is as stale as ever. Before venturing into the job market voluntarily, it helps to know how marketable you are and the amount of movement in your occupation of choice.
Jerry Hannigan, an experienced mid-level marketing manager with more than 20 years in a variety of industries has discovered that positions at his level are every bit as scarce as they were in the 1980s when he was first downsized from AT&T. Like many corporate employees who lost jobs during the downsizing heyday, he has had trouble finding positions at his former level of responsibilities and compensation.
Evanston, Illinois, career consultant Kathleen Voss sympathizes with his dilemma. She believes that many experts have over generalized about how great the job market is.
"It isn't great in every area," she says. "It depends on what you want to do." For example, it isn't a great market for psychologists in private practice--thanks to managed health care. Nor is it particularly terrific in some areas of banking where constant reorganization and consolidation have shrunk the market considerably. Investment banking demand may be great (especially for MBAs from, D top schools) but it still depends on what part of the investment banking field you're trying to enter.
Voss cites an example of an investment banker in Boston who, as a senior vice president in insurance, was involved with managing trades. Despite her University of Chicago MBA, she was unemployed for a year after leaving her job. It's wasn't that she didn't have offers. She was simply unable to find a job in the financial community commensurate with her abilities and salary requirements.
"It's a mistake to blatantly talk about the market being so great," says Voss. "Sometimes it's hard to match what you had before."
Chicago outplacement consultants Margaret Bernstein and Noah Bernstein agree. "It may be an open economy for a lot of people," says Freeman, "but not for everyone." Adds Morrell, "The larger the salary, the harder it may be to move."
The important thing is that you take the time--and make the effort--to understand your particular piece of the employment market. Then, when you and your future employer are ready to talk money, you won't sell yourself short or make unrealistic demands.
Although you may be tempted to take advantage of an employer's urgent need, conducting satisfying and successful salary negotiations isn't a win-lose game. Your goal is to help create a mutually satisfying resolution between you and your future employer.
You'll need several tools to master this art form: a strategy that suits your personality and the situation, a well-developed sense of timing, effective communication skills and the right attitude. First, though, you need to understand your role.
At the beginning of the interview process, you're an unknown entity to employers. Because they don't know what you can do for them yet, early discussions of money are basically a screening device, a way to weed you out on the basis of affordability.
Establishing Value First
Your goal should be to keep yourself in the game longer. Even if the stated salary range is too low, the employer may be more flexible once you've established how great a contribution you can make. After all, labor is intangible; its value is in the eye of the beholder. After you've built value for your product, the company may be less resistant to the fact that it's expensive. People realize that quality costs--so first prove your quality and then name your price.
Questions about your salary requirements or history can surface as early as the initial telephone or human resources interview. At this point, you not only have no negotiating power, you may not even be talking to someone with the power to negotiate with you. Rather than box yourself in or screen yourself out, say that you're flexible, but need to know more about the position. (If the question is cast in terms of past earnings, convert it into a salary requirements question.) It's just too soon to raise a red flag over the issue of income.
You may not agree with my advice. After all, if the job pays too little, why waste everyone's time with further discussion? Simple: Because if you're a strong candidate and negotiator, the salary offer may improve significantly.
Think about the way people get to the point of buying something they can afford, says Jack Chapman, a Wilmette, Illinois, salary negotiations consultant.
Psychologically, such consumers go from thinking they can't afford an item to feeling they can't live without it, he says. As the urge to buy grows stronger they move from a position of rigid neutrality to more emotional desire. They start looking for ways to shuffle their resources so they can afford to buy and come up with creative ways to justify the purchase.
The same logic applies to employment decisions. Get employers enthusiastic about your candidacy and they may become more generous. Therefore, your first and foremost task is to establish your value. Make employers believe that they can't live without the contribution you'll make to their organization. Since you can't do that until you know more about the position and the organization, you should always try to defer premature salary questions.
Rick Ehlers suggests the following statement: "I can appreciate your interest in discussing salary but I'd prefer to defer the discussion until I know more about the position."
Another (more emotional) approach: "To be honest with you, I feel uncomfortable discussing money right now because I don't want to box myself in or don't discuss salary until there's an offer on the table.
In other words, focus the discussion away from the topic of money and onto the topic of job fit.
Dealing with Persistent Questions from Employers
Employers are not always so easily persuaded to abandon the topic of money. When employers persist, consultant Bob Maher recommends a "turnaround" strategy: "Ask them what range they've budgeted for the position."
This approach worked well for a $45,000-a-year computer programmer who was hoping for a 10 to 20 percent increase along with his job change. When asked his salary preferences, he responded, "Can you tell me what the job pays?" The interview replied, "We have a $45,000-to-$53,000 range." After that, all the programmer needed to do was nod and say, "That fits with my range."
But what if the range has been set too low?
You can say, "Thank you" and get up and leave; or you can get defensive and protest that you were making a lot more than that at your last job.
A better approach, though, is to reach for your homework and say, "Are you aware that similar positions generally pay in the neighborhood of $?" This strategy depersonalizes the situation, while also probing why the employer has set the range lower than industry standards. Knowing the employer's budgeting rationale can tell you a great deal about the organization.
Diversionary Tactics
Your task is simply to understand the employer's position and stay out of premature salary negotiations. Sometimes, you can do that directly. Having received a disappointing response to your turnaround question, you can follow up with another query: "Can you tell me how you arrived at that number?"
This strategy directly explores the employer's needs and priorities, which positions you to build value for your candidacy and thereby "up the ante." You can then easily return to a sell mode in which you continue to establish your value to the employer.
Another good option at this stage is to express surprise at the figure but keep an open mind. Then, lead back into a defer strategy in which you "agree to disagree" until you know more about the position and the organization. So far, you still haven't tipped your hand on your salary requirements (although you may have implied your goal).
Some employers may find evasions irritating. If an interviewer really persists, you probably should name some numbers rather than risk further irritation. But what numbers to name?
Here's a situation when doing your homework can really pay off. Express realistic expectations and needs by using salary surveys as a basis for your requirements. This will also convey to the employer that you know your value in the marketplace and are seeking it.
If the employer casts the question in terms of your salary history, though, you'll have to take a different approach. One option is to distinguish between past earnings and future requirements by saying, "I can tell you how much I was earning at my last employer, but until I know more about this position, I really can't tell you how much I'd be looking to earn here."
This response serves two functions: It disarms the employer by complying with the request, yet at the same time, it establishes a distinction between your past history and your future desires.
If you think you were underpaid in your last position, you may want to convert the salary history question into a worth statement. Rather than just state your final salary, make a "calculated disclosure" that reflects your entire compensation package, advises Maher.
Such a strategy could have worked well for the computer programmer described earlier who was hoping for an increase from his $45,000 annual salary. By calculating in his 401(k), pension and profit-sharing earnings, he could easily (and honestly) have told recruiters: "Last year, my position was worth $52,000."
Still, making such "worth statements" early on can be hazardous, Maher concedes. They may force you into negotiations before you've had a chance to display your value.
Usually, it's wiser not to reveal your previous earnings at all, says Ehlers. "What you made before may be totally irrelevant," he says. "You could be talking apples and oranges."
For example, a real-estate professional earned nearly $80,000 a year plus perks doing site selection for fast-food companies. But when the real-estate market collapsed, there simply was less need for this professional's skills. In keeping with the laws of supply and demand, he needed to determine a more realistic financial objective.
"It's your responsibility to research the marketplace and make some determination of your value to that marketplace," Ehlers says. "Then convert the past earnings question into a realistic dollars-and-cents figure."
Another possibility is to "agree to disagree" on the issue of salary. Just indicate flexibility and a desire to learn more and then revisit the question later in the game when you have a stronger negotiating position.
FRINGE BENEFITS ADD UP
Consider the total salary package. "Fringes" such as health-care coverage, vacations, retirement and profit-sharing plans can add 25 percent to a worker's salary.
The Moment of Truth
You've learned about the position and established your value, and the company genuinely seems interested. At this stage, a question about salary usually is a precursor to a formal job offer and the beginning of direct negotiations.
The time to defer is over. Now your goal is to get an offer on the table you can look at together. This time, in response to the question, "What kind of money are you looking for?" you can employ a new "turnaround" strategy with the statement: "Make me an offer."
Some employers may comply with your request immediately, or take some time to think about it. If a formal offer arrives in the mail or over the telephone, request an in-person meeting with the hiring manager to discuss it.
"It's too hard to read cues over the phone from someone's tone of voice," Ehlers says. "You need to look them in the eyes to pick up visual cues. Besides, it's harder to say no to someone face-to-face."
Other employers will say they need some financial information from you before they can formulate an offer. This can be an ideal time for a "worth statement," but precede it with a reiteration of your selling points. These will remind the employer exactly why you should be hired.
Once you know an employer really wants you, your first impulse may be to request the sun, stars and moon. Try to resist. Instead, name a figure that, based on your research, genuinely reflects the fair market price for your employment services.
An office supply company asked a senior systems analyst to produce two numbers before making an offer: the actual numbers on his pay stub and his "wish list" numbers. When he said "mid-50s" to the latter request, he was prepared to justify his desire with salary statistics he'd gleaned from a Source EDP study of what people in similar positions earn. As it turns out, the company met his "wish list" figures without asking him to defend them.
Consultant Jim Kacena suggests naming a higher number that leaves room for the employer to cut your request back. This is similar to what Nelson Harper's Dennis Huebschman refers to as "leaving some wiggle room."
Still, you must always anticipate potential objections and prepare rationales for what you want. Atlanta career counselor Mark Satterfield has identified three of the most common objections employers voice to high-end requests:
1. Budgetary constraints ("We don't have the money").
2. Your salary history ("You were only making $ in your last job").
3. Peer pressure ("No one else at your level is making that much").
In each case, try first to understand the employer's resistance and then prepare your justification. This usually requires an open mind and some sophisticated "mouth work."
A sales rep who interviewed with a Delaware pharmaceutical company wanted $47,000 plus quarterly commissions, but the vice president of sales offered less.
She countered with, "Why do you feel my offer won't work for you?"
The manager explained that under the "old regime," others often were compensated along the lines of her demand. But the firm had discovered that when the base was too high, reps weren't as motivated to perform.
Understanding the situation enabled the rep to prepare a solid justification for her request. First, she encouraged the VP to recognize that some of her peers were still being compensated under the old system, so breaking precedent needn't be a concern.
Then, she focused on her personal situation. For her, it would be de-motivating to take a pay cut, she said. If motivation was the issue, then she'd be far more motivated by the knowledge that her paycheck matched her worth. Because she was an experienced salesperson, she didn't need to prove her value; she just needed to get the company to agree to pay her according to the standards used for its more experienced and committed sales reps. In the process, she illustrated the power of her sophisticated negotiation skills.
Says Mark Satterfield, "Always remember that your goal is to reach a mutually acceptable resolution, not to squeeze every last penny out of the company."
Kacena agrees, "Negotiate as a friend and equal, seeking a resolution that's fair to both sides."
One easy way to do that is to express enthusiasm and appreciation for the offer. This helps establish a context of commitment and trust from which to work things out.
Guidelines for Negotiation
Career counselor Linda Bougie recommends the following general guidelines for all salary negotiations:
- Be flexible.
- Concede minor issues.
- Dramatize your concessions, not theirs.
- State your desires in terms of their benefits.
- Look for suitable areas of compromise.
From a practical standpoint, it usually makes sense to negotiate in order of descending levels of importance. For most people, this means starting with actual base salary. After that, you can discuss performance bonuses, commissions, benefits and other perks.
Negotiating Styles
In general, your negotiation strategy should reflect your personality and work style. Some people choose a passive negotiating strategy. This approach selects out one area of concern (usually salary) and (nicely) asks for more by questioning, "Is that the best you can do?" without making any specific demand.
Should the employer express openness to your desire for more, you must be prepared with your demand and a justification for it. On the other hand, if the employer expresses an unwillingness to bend, the game is over. Discussion ended.
Another, somewhat more assertive, approach relies heavily on the techniques of clarification and silence. In this strategy, you go through the employer's offer on a point-by-point basis, clarifying each item on the list. Your response might sound something like this:
I'm here to accept your offer, Mr. (or Ms.) Employer. But before I do, let me make sure I understand it completely:
- You're offering me $55,000 per year. Is that right?
- I'll be reviewed annually with a standard cost-of-living increase, but no merit rises. Is that correct?
- You have a 401(k) plan with a 50 percent matching policy?
Jack Chapman also advises using silence as a negotiating tool. By repeating the figure, he says, you let the interviewer know that you heard the offer and are thinking it over. But your body language conveys that you're not entirely happy with it.
The outcome, Chapman claims, is usually a concession to your unspoken demand for more. However, if you'd rather ask for what you want than guilt-trip an employer into providing more, try another, more direct, negotiating style. This approach requires a clear understanding of your financial and emotional needs.
Richard Keyster, a risk/loss manager who was laid off after more than 20 years with Aetna Life and Casualty Company, benefited from such self-knowledge when a central Illinois insurance company offered him a job. On learning that the package didn't include a company car, he remarked innocently, "I'm used to having a car." To his surprise, the company returned to the bargaining table and immediately offered one.
Often, though, it takes a little more effort to get what you want. Reviewing the employer's offer carefully with an eye toward potential holes often helps. Rick Ehlers remembers working with a national sales manager whose "sticking point" was relocation costs from Chicago to the East Coast. The executive brought in quotes from real-estate agents in both cities to justify a $15,000 salary increase. He got it. Obviously, playing "hard ball" isn't recommended unless you're prepared to say "no."
"You definitely have to know your bottom line and refuse offers that won't meet your needs," Kacena says. "But that doesn't mean you have to negotiate with pistols. You never want to demand a concession or deliver an ultimatum."
It's rare, but occasionally offers are withdrawn during the negotiation stage. A retail marketing executive who kept asking for "more, more, more" discovered this the hard way. After two weeks of greedily nit-picking his prospective employer, the firm decided (based on his negotiation techniques) that it had made a mistake and rescinded the offer.
Obviously, this candidate took his strategy too far and alienated the employer. By sending an "I'm-not-going-to-be-happy-here-unless . . ." message, he set up a win-lose situation. And he lost.
Actually, the conflict over money may have reflected a deeper emotional issue. In his previous job, the candidate had been vice president of marketing. The new position didn't carry the same title, which to him represented a step down the career ladder. Perhaps he sabotaged the salary negotiations because he couldn't own up to the real issue at hand.
Remember that net worth and self-worth are not the same thing. Confusing the two will only hurt your effectiveness. Rather than take low offers as a personal insult, view them as a challenge to your negotiation skills.
When an executive outplacement firm approached Rick Ehlers with a lowball offer, he used humor to push the numbers higher. "You don't want a professional," he said. "You want slave labor." The recruiter laughed and upped his offer.
Is there ever a time not to negotiate? You should always ask for things you feel are important to your career satisfaction. Many candidates mistakenly assume that salaries are preset and, therefore, nonnegotiable. This can become a self-fulfilling prophecy. If you don't ask, you usually don't get.
"Don't be afraid to negotiate because you think an employer will withdraw the offer," Kacena says. "In fact, most employers expect you to negotiate. Don't surprise them too pleasantly by backing off."
On rare occasions, however, employers may make offers that are music to your ears. Recently, without any prompting whatsoever, an industrial psychologist extended a dollar offer that was more than double my regular fee. While I didn't protest ("Oh no! That's way too much!"), neither did I feel the need to negotiate further.
