In this battle you are at a tremendous disadvantage. The power is in the hands of the employers, and they know how to use that power - ruthlessly. You are under economic pressure. You are under emotional pressure. You will not be in a good position to negotiate unless you have learned a few tricks to even out the odds. This article will give you an understanding of the dynamics of salary negotiations so you can turn the odds in your favor.
Pricing Your Product
We have agreed that at this time of your life you are a Marketing Manager, engaged in making the most important sale of your life, YOU. Essential to any successful marketing effort is the thinking and analysis that leads to a pricing decision. It follows, therefore, that long and serious consideration must be given to the question of how much your product, YOU, is worth.
How do you answer that question? Flip answers such as, "As much as I can get," or, "At least a million dollars," are not appropriate. No, the question deserves a serious reply. Some job hunters respond something along the following lines: "I am looking at $60,000 a year "or" I couldn't accept less than $70,000 plus a guaranteed bonus," or perhaps, "My present salary is $55,000."
None of the preceding is a good answer. The truth is you cannot intelligently say you are worth $60,000 per year anymore than you can give an odd figure, such as $63,672.18. No one else can pinpoint your value that closely. The best that anyone can say about you is that your employment value lies somewhere in the range of $50,000 to $60,000 or $45,000 to $50,000 or $65,000 to $75,000. Perhaps your range might be from $125,000 to $150,000, or even $250,000 to $300,000. The point is everyone fits into a range.
How, then, do you evaluate what you are worth, your range? The answer is, by a rational analysis forcing you to think objectively about your value and to appreciate the reality that the worth of any employee must always be thought of as a range and not a specific figure.
The first step to establish your salary range is to set minimum and maximum values. You would like to make a million dollars a year but, realistically, what would be the top of your range? Say, with Lady Luck smiling broadly, it might be $100,000. Then, considering your education and experience you feel you are worth $50,000, at the very minimum. Now you have established a broad range of $50,000 to $100,000.
Get more realistic. How many people do you know with talents equal to yours who are earning $100,000? No one? Maybe you should whittle that down to $80,000 which is more than you made on your last job. In all fairness, the minimum of $50,000 was too skimpy. What you have accomplished in your career should allow you to demand an absolute minimum of $60,000. So now you have identified a range between $60,000 and $80,000.
The preceding figures are based on intuition and general feel for the current employment market. Your next step is to consider a number of more specific factors. The main ones are: What were you making in the open market in competition with other managers? What is the level of your education and the quality of your work experience? How smart are you? Another relevant factor is what are the going salaries in the industries and geographical areas you are targeting? Chambers of Commerce and libraries often provide current information from wage and salary surveys. Studying the job ads will also give you a range for salaries being offered in many categories of management.
The above analyses, coupled with realistic evaluations as to your appearance, demeanor, attitude, and honestly measuring what you have to offer against other candidates available, might help you conclude you are worth somewhere between $65,000 and $75,000 per year. Good! You have done what every smart marketer should: You have evaluated your product (YOU) and put your price tag... within realistic and reasonable limits.
The rest of this discussion on salary negotiating is based on the concept that any person is worth between X and Y dollars per year. If you have the slightest doubt about this, and if you feel that, instead of a range, you are worth a specific figure such as $50,000, or $62,600 or $70,019, then stop reading right here, for the rest of this article is not for you.
Range for the Job
Now that you have agreed that your value, anyone's value, falls within a range, then consider the greater question: What is the range of that job you are after?
A position has been advertised or is becoming available. How much is that job worth? In the private sector, lower level positions usually carry non-negotiable rates of pay. In government employment, or in highly regimented organizations, there are often jobs with no ranges subject to negotiation. The government has pay grades, of course, based on years of service, education, and other factors. If you want to join the Army, all buck privates, or all Second Lieutenants, start at the same rates. If you are joining a school system, all teachers with similar education and the same years of experience start at the same salary.
But, in the private sector, jobs falling into managerial, executive, supervisory, professional categories, all have ranges of pay.
You are after a specific job. What is that job worth? A range, of course. Remember, we are not talking about entry level jobs, lower level jobs, government jobs, or even higher level jobs (such as commercial airline pilots) controlled by union bargaining. With these special exceptions, you should expect almost any job in the private sector to have a salary range.
Those of you with experience on the hiring side have been through the ritual of determining a starting rate of pay for a new hire. The owner of a small business, responsible only to himself, doesn't need to get approval to add an employee. But, nearly everyone else needs to get approval from someone, often approvals from more than one level of upper management. The Manager needs to get an "approved purchase order" before he can buy an addition to the staff.
Successful businesses get to be successful by, among other things, controlling payroll expenses. For most enterprises, the biggest budgetary item is cost of labor. Consider two companies, very similar to each other in product and sales volume, each with 1,000 exempt employees. Company A has a sound wage and salary structure and employs tightly controlled hiring practices. Company B is more loosely run, less efficient in hiring and over the years finds itself paying its people an average of $1,000 more a year than Company A. A Purchasing Manager is getting $41,800 instead of $41,000. A salesman is earning $47,000 instead of $45,000. Individually these differences are small, but collectively, it means Company A with 1,000 salaried employees and spending an average of $1,000 a year less per employee, ends up putting an extra million dollars annually into its bottom line.
It is hard to hypothesize a search for a Sales Manager where the job is to be offered at $85,000 a year, not one penny more, not one penny less. Can you imagine a vacancy for a Production Control Manager where the salary is to be precisely $46,400?
Setting the Range
To further convince you every job has a range, the following scenario will illustrate the process by which management of a typical company might set the salary range for a management position.
Mrs. Randolph, the Credit Manager, has tendered her resignation because she has received a better job offer. She has been with the company for six years, starting at $35,000 and currently earns $45,000. Another company, closer to her home, has offered her more money with promises of bonuses based on performance. Her present company is happy with her work but can't match her new offer without creating an internal problem with their salary structure.
Her boss, the Controller, speaks to the Financial Vice President indicating a search must start for a replacement. They discuss the caliber of person needed and type of experience required. Do they want a younger person who might require training and direction, or should they search for a more senior type who might bring additional outside experience to their growing firm? Do they need someone with experience within their industry, or might other types of credit and collections experience be acceptable? Finally, they get around to money.
Financial Vice President: "How much are we going to have to pay?"
Controller: "I figure somewhere between $40,000 and $45,000."
FVP: "How did you arrive at those figures?"
C: "Well, we've been paying Mrs. Randolph $45,000 and we're losing her to a higher offer. Besides, I've checked with some friends in the area. The going rate for Credit Managers seems to be in the $42,000 to $47,000 range."
FVP: "Well, let me sleep on it. We'll talk more tomorrow or the next day. Meantime, why don't you check with our outside auditors to see what advice they offer?"
Their meeting ends and the Controller makes a few more phone calls to collect ammunition for his next meeting with the FVP. He wants a strong Credit Manager who can handle the company's problems with collections because of the weak economy. Also, he doesn't have time to train a beginner in current problems peculiar to their industry.
The Controller concludes it is going to be difficult to find a competent person for under $45,000. They may even have to go up to $47,500 in order to get someone as good as Mrs. Randolph. He feels Mrs. Randolph is really a jewel and has been underpaid. He would have liked to ask for a higher range, but was afraid to do so in view of the company's present difficulties.
The Financial Vice President contacts some friends outside the company to get a feel for current wage levels. He also speaks to the President of the company, who reminds him of the need to keep costs in line. The FVP concludes they are going to have a hard time finding a good Credit Manager for less than $47,000. His guess is they may have to go as high as $50,000. He decides it would be prudent to approve the requested range of $40,000 to $45,000.
The FVP knows from long experience that whenever he approves a range they always wind up with someone at the top of the range. He understands human nature and knows the Controller doesn't have much incentive to keep the salary down. The Controller is interested in hiring as good a person as possible because his success is determined by the strengths of his subordinates. Besides, if he finds someone for less than $45,000, is he going to get a medal or bonus? Not likely. The FVP hopes they will get lucky and find someone for $45,000. If they don't, he can always extend the range another two or three thousand dollars.
When the two executives meet again, the Controller gets approval to find a replacement for Mrs. Randolph within the range he had requested. But Note: There are now two ranges. There is the approved range of $40,000 to $45,000, and there is also the Boss's secret range of $45,000 to $50,000.
After reading the last few paragraphs, are you willing to accept that any job for which you are being interviewed has a price range attached to it? You have already agreed that your value should be expressed as falling in a range between X and Y. Now, you must understand the job you want also has a price range. It is imperative you believe this! At lower managerial levels this range might only be two or three thousand dollars. For most jobs, the range is easily $5,000. At higher levels, the company's salary range might easily be $20,000 or more.
Previously you accepted the idea that your value as a manager lies within a range. Now you also must accept the additional concept that "every job has a range". If you don't believe this then you should stop reading at this point for what follows is predicated on this logical premise. If you are a candidate for a position and naively believe there is a rigidly fixed rate of pay for the job, then grab what they offer you and leave the higher standard of living to stronger and wiser souls!
So, a lot of thinking goes into the valuation of each job being filled. Companies want to control expenses but, at the same time, they want to hire the best people they can afford. If you accept the premise that every job has a range, and you have now interviewed successfully to the point where you have been offered a job, would you have any reason to believe the money you have been offered is anything more than the bottom of the range? Of course not! This is where negotiations begin.
When you go job hunting, you are in the position of a seller. The product you are selling is YOU. The companies to which you write, the ads you answer, the people you meet are all potential buyers. You want to get as good a price as you can for your product. The buyer, on the other hand, is trying to acquire your product (YOU) for as low a price as possible, within a range the company considers equitable and reasonable.
Between a buyer and a seller, who is in the power position? The buyer, of course. The buyer can always walk away from the deal, leaving the seller to wait and hope for another buyer to come along. The exception to this general rule is the occasional "sellers' market.'' This is when demand far exceeds supply, and sellers find themselves in the happy position of naming, and getting, their price.
In job hunting you rarely find a sellers* market situation. A star athlete can sometimes name his price. A "hot" entertainer can often command a high price to appear in a show. Like most mortals, as a seller you must learn to deal with those powerful buyers, the employers, who try to use all the tricks buyers utilize to get the best price.
It is accepted wisdom that when buyer and seller confront each other, THE ONE WHO MENTIONS MONEY FIRST, LOSES. When the seller mentions money first, the buyer immediately knows the maximum the buyer needs to pay for the commodity. When the buyer mentions money first, then the seller knows the minimum price to expect.
Employers, bless their souls, usually are good people. Employers buy raw materials, supplies, equipment and labor. A profit at year's end is the result of purchasing all of these commodities at favorable prices and selling their products for amounts in excess of their costs.
The Purchasing Department deals with suppliers, vendors, consultants, services, using all the tricks at its command to get favorable prices and terms. The Human Resources Department negotiates with the unions for wage rates, and also "buys" human beings for other lower level positions.
Salaries for Managers, Supervisors, Executives, Professionals, and Specialists are handled by negotiations con-ducted by a broad spectrum of managers, occasionally assisted by Executive Recruiters, and sometimes guided by outside salary specialists and consultants.
It is in an employer's best interest to establish a negotiating edge as early as possible. That is why so many ads ask for "salary history." If you are too smart to fall for that ruse when you answer their ad, the next time they try to get salary information from you is when they ask you to fill out an employment application. Of course, they want to know where you went to school, where you worked, and all kinds of vital statistics and then they slip in the question for the main thing they are after: "How much did you make on your last job?" Again, you should be too clever for them and leave those questions unanswered.
The next crack at you will occur early in your interview when you hear questions such as: "What's your current salary?" "What are your salary expectations?" "What's the least you'd consider to join our firm?" "What did you earn at the Acme Company?"
Don't mention salary when you respond to an ad. Nothing good can happen to you if you do so. If you mention too high a figure, you probably won't be interviewed. If you mention too low a figure, you may be considered as under qualified or worse, you might do yourself a disservice by selling yourself for less than they might be willing to pay. The same applies to any application you are asked to fill out. On those money questions, just write in "Open", or "will discuss".
When money questions are thrown at you in the interview, handle them as you would any other sensitive questions. Duck them with replies such as: "I'm willing to consider any reasonable offer," or "It's hard to answer without more information about the job", or "I don't think we would have any trouble in agreeing on a fair salary", or "Perhaps we can defer discussion of salary until we've agreed there's mutual interest regarding the job".
Some writers recommend these money questions can also be answered by turning the tables on the interviewer: "What is the range for the job?" or, "What do you have in mind?" Of course, if the interviewer is dumb enough to answer that the job range is between $52,000 and $56,000 you would immediately latch on to the higher figure in your mind, but you still want to change the subject. The problem with these last two responses is that they keep the conversation focused on salary which is a subject that you want to postpone until later.
It is also possible that the interviewer may not give you a totally truthful answer. The official range may be $52,000 to $56,000, but they may be willing to go even higher for an outstanding candidate. If you express interest in the higher figure of the range mentioned, you may be telling the interviewer that you are willing to sell yourself for less than they may have been willing to pay.
Are you being advised to give evasive replies to money questions? You bet! Think of how you would reply in a social situation when asked a personal question you would prefer not to answer. You just evade the question. Someone you just met at a party asks you how much rent you pay, or whether you are happily married, or your opinion about a mutual friend. You don't want to be impolite even though you feel the question is impertinent. So you laugh and offer an evasive answer and change the subject with a question.
That is exactly what you do in the interview. You evade and then YOU CHANGE THE SUBJECT WITH A QUESTION. This is one of the reasons you prepared a few questions in advance of the interview. A good, open ended question will take the interviewer's mind off the money question, bring the conversation back to the company's needs and focus on how you can help solve some of their problems.
You never want to be the one to initiate the subject of remuneration. You always want to postpone discussion of money until LATER. When is later? Later is NOT NOW! Your objective always should be to get the employer to mention money first.
The Offer
If you have followed the job hunting techniques, you will come to that exhilarating moment when you finally hear a job being offered to you. You have been successful in avoiding any discussion of salary, so this is the first mention of money on the part of the employer.
"Miss Morgan, my associates and I are very impressed with your presentation. We're pleased to tell you the job is yours. Your starting salary is $48,000 a year and we want you to report for work Monday morning."
Oh, joy! Oh, ecstasy! You want this job so badly you can taste it. You were making $45,000 on your last job but, because of the pressure you have been under, both financial and emotional, you had decided you might even accept $40,000. Now they have offered you $3,000 more than you were making on your last job and $8,000 more than you were willing to take. You want to scream, "Yes, I will take it!"
But... wait. You have just read and accepted the premise, that every job has a range. So, by what stretch of the imagination would you assume you are so wonderful and charismatic they would offer you the top of their range? Why would you feel they are offering you anything other than the bottom of the range they expect to pay?
Furthermore, if you have done a good job of selling yourself and they like you, and the company's sales volume is over $50 million per year, does it really make much difference whether they pay you $48,000 or $50,000 or $52,000? Of course not!
Response to Offer
In negotiations between buyer and seller, the buyer has the advantage. Well, at that magical moment when you received your job offer, a mystical metamorphosis has taken place: YOU ARE NO LONGER THE SELLER. You have made your sale and now the roles are reversed. The company has now become the seller trying to sell you on the idea of joining them. YOU ARE NOW THE BUYER who is trying to decide whether to accept their offer. Now who has the negotiating advantage? You do, of course! YOU!
The way many job hunters would respond to such an initial offer (and thereby start their salary negotiations) is by throwing a slightly higher figure at the interviewer. For example, our hypothetical Miss Morgan might say she could only consider accepting the position If it paid $50,000. There would be a good possibility she would get it because if she is a good buy at $48,000, she would also be a good buy at $50,000. But she might have made a great mistake.
She wasn't a smart enough job hunter to understand the existence of a salary range. Her request for a slightly higher figure may very well leave her salary closer to the bottom of the range than to the top.
There is a better way. It is called the "Thirty Seconds of Silence Routine". Miss Morgan should smile broadly, indicating her pleasure. Her demeanor should show she is flattered, honored, thrilled. She should say how excited she is at the prospect of working for such a wonderful company, with such impressive associates, and for such a dynamic boss. She should convey in words that everything is great... except for one thing, the salary.
Thirty Seconds of Silence
"Thank you," says Miss Morgan. "This sounds like a wonderful challenge." Then she looks out the window at the trees in the park across the street and muses aloud, "Forty eight thousand, hmmm," and falls silent. If you could read her thoughts, what she is doing is counting slowly to herself... "One, one thousand, two, one thousand, three, one thousand, four, and one thousand..."
Miss Morgan will never reach the thirty second count of "thirty, one thousand" because nature can't stand a vacuum, and neither can the interviewer. Most interviewers will say something long before the end of the countdown and a surprising percentage of salary offers are improved during that early negotiating period.
The interviewer is under pressure. He is responsible for closing this sale. He doesn't want to go back to his superiors or his peers and admit defeat. He tried to be a hero by buying Miss Morgan at a bargain price when he offered the low end of his range. He is far from the top of the range he can offer, and he would like to be able to tell his associates he succeeded in making the sale.
Some time before the thirty seconds are up, the interviewer might say, "What's the matter?" I thought you'd be pleased with my offer." Again, Miss Morgan should reiterate her excitement about the job, repeating everything is wonderful except the salary which she considers "thin." Then she lapses back into silence and continues her count from wherever she left off... ''ten, one thousand, eleven, one thousand, twelve, and one thousand..."
At this point the interviewer will frequently raise his offer. "You may have a good point, Miss Morgan. Perhaps I can get approval to increase the starting pay to $49,000. I am sure this should help you make up your mind."
Miss Morgan has learned how to play the game. "Well, forty nine, hmmm." She starts her silent count once again... "One, one thousand, two, one thousand, three, and one thousand..." The offer may be increased again. How long does this game go on? It varies from one situation to another, but be daring. The job will not evaporate. You have succeeded in selling yourself, so keep smiling. Remember the company wants you. Good people are hard to find. Keep pushing, remembering all the while to smile, to be charming, to be excited about the job. It may be possible to move up the initial offer by several thousand dollars.
When do you stop? When you receive a signal clearly indicating the interviewer is hot going to budge one dollar further up the salary range, at least for now. Perhaps the interviewer says, "Look, Miss Morgan, that is really our best offer. We hope you will accept but if not, we will have to continue interviewing other candidates." At other times, you will have to rely on your intuition to tell you if you have pushed negotiations as far as you can. This might be based on the interviewer's expression and attitude. What do you do now? Accept the job, right? No! No!
Never Accept On the Spot
Now is the moment to remember one of the most important rules of job hunting: NEVER ACCEPT OR REJECT A JOB OFFER ON THE SPOT. The time has come to apply that rule. You interviewed well, you got your offer, and you went through your "thirty seconds of silence" routine. Maybe you were able to increase the initial offer, as in the preceding example, or maybe the interviewer refused to budge one dollar from the first offer. Either way, don't accept, or reject the salary offered, yet.
This is the moment to ask for time to consider the offer. Say you want to sleep on it or discuss it with your spouse or your guru. After all, you are being asked to make the most important decision at this time of your life. If you encounter an employer who insists on an immediate answer, who won't give you time to consider your decision, you have received an important indication it might be wise to pass up this job opportunity. Do you really want to work for an individual or organization so insensitive to the employee? Be assured almost all employers will grant you the opportunity to sleep on an offer.
Thank the interviewer again for the exciting offer, and make an appointment to return the following day. Don't worry the job will be waiting for you. If you were a desirable employee on Wednesday, you will be just as desirable on Thursday or Friday. In fact, you may be even more desirable, because this delaying tactic can be an effective negotiating technique.
Think of what happens to the interviewer after you leave. He may get a tongue lashing from his boss, who may berate him for possibly letting a top candidate get away. The boss might say, "You dummy! You had approval to go as high as $52,000. Why did you stick to your low offer? Make sure you don't lose her when she comes in tomorrow.
The Next Meeting
When you arrive for your next meeting, you may find the interviewer predisposed to increase his last offer. The conversation might run:
"Well, have you had enough time to decide on our offer?"
"Yes, and I am still very excited about the opportunity, though I find the salary disappointing. Have you had a chance to give further consideration to that aspect of your offer?"
At this point the interviewer may stand fast, or he may say, "I did have a chance to discuss this with my boss, and I am pleased to say I have been granted permission to start you at $50,000. I guess that should meet with your approval." Either way, what do you do now? You guessed it - back to the thirty second routine!
"Hmmm, $50,000" ... "One, one thousand, two, one thousand, three, one thousand..." Sweat him out! He may have something more to give; Find out if he has made his best offer. He may still be trying to be a good businessman and buy you at a bargain price. You might repeat some of the many assets you bring to the company. You can ask if it would be possible for you to meet with his boss again. You might suggest additional ways in which you feel you can contribute to the company's growth and profitability.
The offer may be increased again, but eventually you will reach the point, as you did in your previous meeting, when the conversation and your intuition tell you that you have gone as far as you can. The interviewer has said in effect, "That's my best and final offer. Take it or leave it."
Do you accept the offer now? No! No! No!
Fringes and Perks
Now is the time to talk about fringes and perks.
Clerks and other lower level employees discuss health benefits and vacation policies during interviews. Executives and managers settle the money question first. After you have negotiated the best salary, then is when you want to discuss some of the fringe benefits which might be negotiable.
What is negotiable varies from company to company. The higher your level, the more benefits there are for which to bargain. At the very highest levels you can talk about stock options, bonus plans tied to profitability, employment contracts, special insurance programs, financial planning advice, and a host of other goodies. Most of us, unfortunately, do not have access to such juicy perks, but there are things for which almost any manager can negotiate.
There is sometimes room to negotiate vacation time. Many companies have a policy relating vacation time to length of service. For example, a typical firm gives only one week's vacation after the first year of service, but two or three weeks in subsequent years. You are in a good bargaining position, so you might say, I've been planning for some time to attend a family reunion in my home state next year. If I accept your offer, could we have an understanding that I will be entitled to two weeks vacation a year from now?"
This is an easy concession for the interviewer to make, and it amounts to an extra week's pay for you and your family. If you are starting at $50,000, that is close to $1,000. The interviewer usually doesn't need any special permission to make that concession, and besides, he will consider it to be a moot commitment. If you have been doing a great job, you will deserve the extra week's vacation. If your performance isn't satisfactory, you probably won't be around to collect on the promise.
A more important, but easily negotiable, fringe benefit is the early salary review. This is another benefit most managers can grant without getting special approval. You might say, "Even though I'm disappointed with the starting salary, I'm very excited by the challenge of joining your organization and by the prospect of working with you. I think you'll see very quickly how I'll strengthen your department and the contribution I can make to the company. If I accept the starting salary you indicated, could we have an understanding my first salary review will take place in six months, instead of the anniversary date which is your usual company policy?
A $4,000 increase that comes six months early is the equivalent of a $2,000 bonus check. If you push your luck and can get that same adjustment after three months (nine months earlier), you will be picking up an extra $3,000.
If there is a car involved in the job, it may be possible to upgrade the kind of car you will be driving. It may be possible to negotiate the size and location of the office space you will be occupying. It is relatively easy to ask for, and get, some of these concessions at the time you are going into the new job. After you have been hired, you stand in line with all of the other soldiers!
After you have fought hard, but pleasantly, for that extra pay and for any negotiable fringe benefits, don't agree to start too soon. Appearing too anxious to start could be interpreted as a sign of weakness. Instead of acceding to the request you start next Monday, ask for more time. Say you have some loose ends to wrap up. Ask if you might start a week later.
Of course, if there is an emergency and they need you urgently, you can always agree. Say you will juggle your affairs for the convenience of the company but, after their emergency is over you will need to take a few days off to take care of some personal matters. You will start work in a more dignified manner, and besides, what is wrong with enjoying a few days off with pay?
You Must Negotiate
Here is some news you would probably rather not hear. YOU MUST NEGOTIATE. You are very foolish if you don't. Maybe you don't care about those few extra pesos. Maybe you don't want to be perceived as a money-grubbing sharpie. Maybe you don't care about your family's standard of living. Maybe you feel that poor people are happier than rich people! Following are the reasons why you must negotiate.
A preeminent reason to negotiate, of course, is the money. You sell your mind and body for the money they will bring. With the fruit of your efforts, money, you pay for the many tangible things that make life bearable and enjoyable. The more money you earn, the better the quality of life to be enjoyed by your family and the greater security you can establish for your future.
You will be more desirable to the employer. The employer will have greater respect for persons who know how to defend their own interests. If the employer admires your ability to handle your own interests competently, he will have more confidence when you are protecting his interests against customers, vendors, governmental agencies, unions, and other groups.
As long as you keep smiling and keep acting graciously and courteously, no one will resent your trying to make the best deal for yourself. To the contrary, you will be more admired and respected, and you will be perceived as a stronger, and therefore more valuable, employee.
Most job hunters are afraid of standing up to a prospective employer and asking for more money. It is fair to say a very high percentage of hapless job hunters accept less money than they could have received had they done a little negotiating. They end up leaving thousands of dollars on the table. Sad, but true!
So, What's the Difference?
But really, does it make much difference in the long run if you start your new job at $60,000 instead of $65,000 a year? The difference is only $5,000. That extra money would be nice, but are there not other important things about a job, such as location, duties, fellow employees, and other intangibles?
Sure, other factors are important. Everything should be considered when making a job decision. BUT DON'T ALLOW ANYTHING TO KEEP YOUR EYE OFF THE MONEY. Did you say the difference between $60,000 and $65,000 amounted to $5,000? That's just the first year!
Consider two executives who start with the same company on the same day. One starts at $65,000 and the other, after a little negotiating, starts at $70,000. They both stay with the company for ten years. At the end of the ten years, that starting spread has added up to a whopping $50,000 in income differences between the two executives.
Next, what about salary increases which are commonly based on a percentage of salary? Given an annual increase of seven percent, by the end of ten years there could be an additional difference in their incomes of more than $10,000 per year. Consider also that the second employee could be saving the difference in their salaries. Invested in Municipal Bonds at seven percent, such savings, by the end often years, will have earned additional income of several thousands of dollars.
You can now see, the difference between $65,000 and $70,000 is not just $5,000. Over a ten-year span, your unwillingness to negotiate could easily cost you and your family over $100,000! And what of the person who accepted $80,000 when $90,000 was within the employer's price range? What about the higher level executive who accepted $120,000 when $150,000 was a reachable goal?
Another Potent Reason to Negotiate
Think about Miss Morgan. Remember how ecstatic she was when she received her wonderful offer of $48,000? What if she had given in to her impulse and grabbed at the offer? Suppose Miss Morgan had merely said, "Thank you. I'm very pleased. Fll be delighted to report for work Monday morning.
What do you suppose would have gone through the mind of the interviewer at that moment? Chances are he would have said to himself, "What a jerk I am! I could have gotten her for less. She jumped at $48,000. She probably would have been just as happy with $45,000... or even $40,000." From now on every time the interviewer sees Miss Morgan he will be reminded of one of his failures.
When will the interviewer, now Miss Morgan's boss, get even? You guessed it. When salary review time comes along. Then Miss Morgan, instead of getting the $5,000 raise she should be entitled to, will be hearing, "You've been doing a fine job but, if you will recall, when we hired you we tried to be very generous in anticipation of the good work we expected from you. You were well taken care of by us on joining the company and we hope you'll be pleased with the $2,000 adjustment to your income at this time."
If you negotiate firmly, but pleasantly, the boss will feel lucky to have hired a jewel like you at a favorable price. He will be constantly reminded of your value to the company, and you will be marked in his mind as someone who should receive special consideration when salary adjustments are made.
Summary
YOU MUST NEGOTIATE. Even if your negotiation efforts are unsuccessful, even if you don't improve the initial offer by a single dollar, you will still come into the company with the image of someone who knows how to take care of his or her personal interests. You will be respected, and respect is vital in setting the stage for a successful career with the organization.
