To those readers who have been unemployed for some considerable time, that may seem like a rather silly question. Yet they are the very ones who run the greatest risk of either making a disastrously wrong decision or, by jumping at the offer, of failing to negotiate the best deal. When you have spent months out of work, devoting yourself full-time to the job search, it is very tempting to accept the first offer you get, especially if it arrives just as you are starting to become desperate.
Those who currently have jobs are likely to be more careful. Even if their progress is blocked where they are, or their company is in a parlous state, they know how easy it might be to jump out of the frying pan into the fire.
So, when the elation has died down, you need to take the time to consider carefully every aspect of the situation before you commit yourself. If the offer is made face to face, or over the telephone - either by the potential employer or by a recruitment consultant - acknowledge that you are pleased to have received it but say that you would like to think it over before giving your decision. Ask for it to be confirmed in writing - that will buy you a bit more time. When, on the other hand, the first you hear of the offer is a letter arriving on your doormat, you are spared the need for an instant response and automatically get time to think it over.
How much time you have to consider it varies widely, but several days would normally be reasonable and, at a push, you can get away with up to a couple of weeks. Some companies actually put a limit on it, saying that the offer is only open for a given amount of time. While you need a sufficient breathing space to talk things over with your partner and do any checking around which is required, do not take more time than you need. Put yourself in the position of any other candidates who are being held as reserves in case you decline and be considerate to them. Do, on the other hand, be wary of any company that demands an immediate decision on a 'take it or leave it' basis.
What to Check
By the time you get to an offer, which will probably be after two or three rounds of interviews, you might think you would already have all the information you need to make a decision. In reality, however, there are a number of reasons why it may only be at this late stage that vital information becomes available. Private companies may be unwilling to release their detailed accounts until they have narrowed the field down to the last candidate and know that they are genuinely interested. Professional partnerships are still more secretive. Even public companies may be wary of early disclosure of key facts, especially if - for example -these relate to plans regarding an expansion program or the introduction of a new product.
Make sure, therefore, that you have all the information you need about the following.
- The company's financial situation - its profitability, liquidity and sources of funds (especially for financing any planned growth).
- The industry in which it operates, including both the general prospects for that business sector and the company's position in relation to its competitors.
- The Company's power structure - how are decisions made and who really calls the shots?
- The key people - have you met all of the individuals who really count as far as the position you have been offered is concerned? If the company is part of a group, have you met relevant people from the parent company?
- If the ownership is in the hands of an individual or a family, what are the plans for succession? Is the company likely to be sold off?
- The culture - joining a new organization inevitably involves an element of culture shock. Have you really got a feel for the likely extent of that? Especially where you are making a major change, for example from a large corporation to a private company, or from a British organization to an American one, are you sure that you are going to be able to adapt?
- The reason for making the appointment - have you been told the truth? Has the position been imposed on the company, for example by the parent organization or at the insistence of the company's bankers? If so, what kind of resentment are you going to face?
- Are there any other problems? Have you asked what difficulties face the company as a whole, and the person accepting this job in particular? Have you been given a *warts and all' view or just the sunny side of the picture?
- Job title - if for example, you are a 'director (designate)', how long will it be before the 'designate' is removed?
- The job - has it been defined fully and precisely enough for you to be sure it is the right move? Be particularly wary with newly created positions. Is there any overlap with posts held by other people and, if so, what are the implications?
- Performance measures - do you have a clear and detailed understanding of how your performance will be judged?
- Reporting lines - are there any ambiguities which need sorting out in order to avoid problems later?
- Authority - has the amount of authority you have, and any limits on it, been clearly defined? Is the authority you have been given in line with the responsibilities which you will be accepting?
- The resources you will need in order to do the job success-fully - what guarantees do you have that they will be adequate?
- The remuneration package.
The first source of information is the company itself. If you do not have all the information you need, then do ask. There is nothing wrong with requesting either additional facts, or a further meeting to discuss pertinent matters. It is in both parties' interests to avoid making what could be an expensive mistake.
If you have concerns, or need reassurance, about the company's financial situation, you could ask for the opportunity to meet its professional advisers - the partner in its audit firm, or its bankers or lawyers.
For independent advice, do use your network. By now you should be familiar enough with networking to get any additional information you may need on the company itself, the industry it is in and its competitors. Try to get views on key people, too -especially the person you are going to be working for and, if it is not the same individual, whoever runs the company. When you meet people at interview they will, like you, probably be deliberately displaying their best side and many successful individuals can be highly charismatic, at least until you get to know them better.
If the selection process was handled by recruitment consultants, they may also be useful, but do not expect their advice to be totally unbiased, especially if part, or all, of their fee is dependent on filling the job. You are more likely to get impartial advice from any headhunters or consultants whom you know well but who were not involved in this particular assignment.
Finally, do talk the offer over fully with your partner, especially any implications on your domestic life like a longer journey to work, absences from home due to business travel, or the need to relocate. It is better to confront any problems before you take the job, rather than when it is too late.
Negotiating the Package
Often, a company takes the initiative on the package and makes you an offer, leaving you with the options of accepting, turning it down or negotiating. Sometimes, however, they will tell you they want to make you an offer, but ask you to attend a further meeting to discuss terms. At such a meeting, they may make the first move, or they may ask you what you expect to be paid, perhaps in the hope that you will bid low.
The whole thing can get a bit like a game of poker, which may suit you if you enjoy bluffing and gambling, and terrify you if you do not. In a game of poker success depends partly on the cards you have in your hand, and partly on how you play them.
By the time you come to negotiate on the remuneration package, you probably have the stronger hand. The company has identified you as the favored candidate. Should you decline the offer, they will have to consider either turning to someone who is only their second choice or, if there are no other suitable candidates, starting all over again. This advantage is, nevertheless, balanced by the fact that the company probably has more experience in conducting negotiations than you do - unless, of course, you have done a lot of hard negotiating in the jobs you have previously held.
Where selection has been carried out by recruitment consultants, it is possible that they may act as intermediaries in the salary negotiations. This could have two advantages. Not only are they likely to be more experienced in such matters than you are, but they also have a vested interest in achieving a satisfactory outcome. In order to achieve this, they may try to persuade the company to up the ante. Indeed, where they are paid on a percentage of the salary which is finally agreed, rather than on a fixed fee, it will be in their own interest to do this.
Evaluating the Offer
Regardless of who actually does any negotiating, however, you need to know whether you are being offered a fair figure for the job in question. How do you find out?
Salary surveys are not a great deal of use for this purpose. At best they will give only broad markers. They are usually out of date by the time they appear, they quote very wide ranges, and you have to take into account so many different factors - like size of companies, the number of levels of management, regional pay variations - and so on - that you will be lucky to arrive at any conclusions which are sufficiently precise.
To be fair, by the time you get to a senior level of management, there is no precise rate for any given job. The same job title may mean very different things in different companies - and that is before you start taking into account the variations in performance between one individual and another. There are, however, two groups of people who will be able to give you a pretty good view on the matter.
The first group are professional recruiters. A headhunter or recruitment consultant who is handling the Job in question may not be entirely impartial, but it is worth asking any others that you know well enough, although you should obviously be discreet, maintaining confidentiality about the name of the company from whom you have had an offer, and Just describing its size and the nature of its business.
The other source is your good old network contacts. Speak to people who are in the same business sector. You can do this at the same time as you ask them for any other information or advice about the position in question.
You will, naturally, also be comparing the offer you have received with what you are currently, or were last, earning. If you are currently employed, you may well feel - unless you are making a sideways move to enhance your long-term career progression - that you require an increase to justify the risk of moving and the increased responsibilities of the new job.
You will want to take account, too, of any disadvantage you may suffer by leaving before you reach the end of a bonus or profit sharing period, or as a result of missing out on either a salary review or the chance to exercise share options. Those who are unemployed, on the other hand, may be willing to move sideways, or even to take a drop, in order to re-establish their careers.
The main consideration will, of course, be the total value of the package, but you and your potential employer may be able to negotiate to mutual advantage over the various elements of it. Smaller companies are often more flexible over the way the total cost to them of employing you is divided up. Large companies tend to be more bureaucratic, although some do offer cafeteria benefits, i.e. the opportunity to pick and choose assorted benefits up to an agreed value.
Elements of the Package
In looking at the various elements of the package, there are a number of points you need to be aware of.
- Salary. As well as the basic offer, check the frequency and date of reviews. If a review is due a few months after you start work, will you miss that and have to wait over a year for your first one, or can you negotiate an interim review? An agreement to a review being undertaken after, say, six months can also be used as the means of achieving a compromise if you cannot get the company to match your expectations on the salary at which you will start.
- Bonus or profit share. A scheme based on a formula is generally to be preferred to one which is purely discretionary, although the latter may pay well if you have a generous boss. Check whether the amounts earned depend solely on your own performance, or that of a team, or even the whole company or group, and ask for figures on what has actually been paid out in the past rather than relying on pie in the sky expectations.
- Share options. Get full details of the scheme and check the current tax situation. In evaluating this benefit, bear in mind both the plus of the fact that it can make you a lot of money, and the minuses of the uncertainty of this and of the long timescale involved.
- Equity participation generally. Whether you acquire shares via options or in some other way (e.g. bonuses), take an objective view of their marketability. Shares in unquoted companies may be saleable only to the individual who owns the bulk of the business, in which case you need to examine the relevant provisions extremely carefully. Beware too of the promise of shares in a business which is owned fifty/fifty by two people. When it comes to the crunch, you often find that neither is willing to put a small but potentially controlling interest into someone else's hands.
- Cars. Check which running costs are paid by the company and which you have to meet. Although most people still find it tax efficient to have a company car, you may wish to consider cash alternative, if one is offered.
- Pension. What do you contribute, and how much does the company put in? If you opt for a private pension, will they contribute to that? If you are currently in a company scheme, what will you lose by moving, especially if capping rules come into play? Will other elements of the package compensate for this?
- Insurances. Does medical insurance cover just you or your whole family? How much life cover is provided? What about permanent health (long-term disability) cover?
- Relocation. If this applies, what will the company pay for? Just legal and estate agents, fees plus the actual removal costs? Or will they contribute to the equally large sums you could end up paying out, as a result of having to move home, on new carpets and curtains? You also need to consider a host of other factors, like whether the salary differential reflects comparative house prices, and whether educational standards in the new area will necessitate incurring the cost of private school fees.
- International relocation. The number and complexity of factors, including different tax regimes as well as considerations like housing, education, the cost of groceries and other everyday items, and your partner's earning potential, make it imperative that you obtain expert advice.
Before you finally accept an offer, it is vital to get it all in writing, including any amendments you may have negotiated. However much you may trust the person you are dealing with, never accept promises made orally. What would happen if the individual in question had a heart attack or went under the proverbial bus?
Do also bear in mind that offers may well be made subject to a medical check and satisfactory references. Surprisingly, only a minority of employers seem to insist on medicals, although the majority does appear to check references. This raises some interesting questions about how honest you should be.
Unless you have to fill in an application form, the question of your health is likely to arise only if an interviewer asks specific questions, if you display obvious signs of having a problem, or if you raise the matter yourself. Since prospective employers tend to run a mile at the slightest whiff of a health problem, you may, so long as you are quite sure that the matter in question will not affect your ability to do the job, prefer to be economical with the truth. You need to be aware, though, that if you are asked to take a medical, there could be problems, so you should be very wary of being blatantly untruthful. If direct questions are asked it is generally better to explain the situation fully and thus put it into its proper perspective.
The situation regarding references is rather clearer cut. It is likely that your current or most recent employers, and probably one or two earlier ones, will be asked to act as referees, and very few refuse, even if they limit what they say to objective, factual matters and avoid committing themselves to subjective opinions. If, therefore, you have fudged dates of employment to conceal a gap in your career history, or have erred on the generous side in quoting your remuneration, hoping that this will enable you to negotiate a better deal in your next job, you are almost certain to be caught out. Such dishonesty would represent grounds for your prospective employer to withdraw the offer.
While some companies are very guarded about giving references, many are not. There is consequently a fair chance that the company which has made you an offer will phone up your current or most recent boss, and have quite a lengthy chat about everything from the factual items like dates, job titles and salary to your achievements, your personal relationships with superiors, colleagues and staff, your integrity and sobriety, and even the stability of your personal life.
Naturally you will avoid, if at all possible, giving as a referee anyone from whom you expect to get a bad reference. If, however, the company which has offered you the job insists on speaking to a former employer whom you left under a cloud, alert them to this and explain the situation, e.g. that there was a disagreement over some fundamental matter or simply a clash of personalities.
In any case, you should never allow referees to be contacted until you have given them the courtesy of a call to explain who will be contacting them, and you should use this opportunity to brief your referees about the company and job in question. With the exception of the public sector, where openness about job applications means that references are supplied on application and taken up before interview, it is rare for referees to be contacted until an offer has been made and it is advisable, therefore, to decline to supply them any earlier in the process unless it is to your advantage to do so - for example, if you are out of work and wish to reassure a potential employer as to your performance in your last job or your reasons for leaving it.
Buy Backs
If you are in employment it is possible that, when you hand in your notice, your employers will try to dissuade you from leaving them. In some cases they will actually try to buy you back with inducements of one kind or another. You may be offered more money or you could be told that the company had been on the point of offering you a promotion. How should you respond?
Some people feel that, once they have accepted an offer of a new job, they should honor their decision. Others are happy to encourage an auction between their current and prospective future employers.
If you find yourself in this situation, you may wish to seek advice from disinterested third parties. Remember, though, that any recruiter who is directly involved does not fall into that category, being paid by your future employer and probably being dependent for at least part of that payment on you accepting the job.
The decision you make will inevitably reflect circumstances which are different in every case. If you are tempted to succumb to a buy back, you should however, bear in mind that, if it took the threat of losing you to make your present employers recognize your true worth on this occasion, you may find yourself back in the same undervalued position once again in the not too distant future.
"The more effort you put into preparation, the more positive and confident you will feel on day one."
