Whether you really want "big bucks" or not, you must always negotiate your salary, never just accept what is offered. Otherwise, your PE will feel cheated. He or she will suspect that more was paid for you than was necessary. So you will have devalued yourself as well. When does negotiation start? Earlier than you may think.
Negotiate Starts in the Pre-negotiation Stage
The pre-negotiation stage is the period before you have made a sale. Up to this point you have deferred all talk of compensation. However, everything you do is really part of your salary negotiation, from the quality of your sales letters to the way you dress and how you present yourself. At some point, however, you will begin to focus on salary negotiation during the interview. Perhaps the interview has been going well. You can see where things are heading. It is time to begin. Your objective is to give salary guidance to your PE while avoiding direct questions or discussions of salary.
The best approach is an indirect one. For example, you can describe an experience you had with your company car. This will alert the PE to the fact that you expect a company car or equal compensation. Or you can tell a story about a subordinate and mention his salary. The salary level you assign to your subordinate will give the PE an idea of what salary you expect. Say anything you want in the way of a subtle hint, but do not state your compensation requirements explicitly. You are not yet in actual negotiations. How do you know when actual negotiations are beginning?
The key to success in the interview, or in any dialogue with the PE, is to listen. By listening carefully you will know when you are about to get an offer, The PE will begin to sell the job to you. He or she will describe the advantages of the job, the company, working conditions, or recreational opportunities. The crucial moment is when the PE begins to describe fringe benefits. This is one reason that you should not bring up fringe benefits yourself. If you allow your PE to do it, you will know that you have made a sale and will gain a psychological advantage in negotiation.
How to Avoid Negotiating from Your Old Salary
In many human endeavors there are guiding principles of success that must be observed. In salary negotiations there is such a principle. It can be stated simply: If you are trying to negotiate a significant increase in salary, do not make your present or previous salary the basis of negotiations.
If you are already making a satisfactory salary, you may be seeking a great job for another reason for example, to improve your opportunity for advancement or to get out of an impossible political situation. In this case, you may want to reveal your previous salary and negotiate from there.
If you are after a significant salary increase, there is an important fact that you must know. Most companies will try to use your previous salary as a starting point for negotiations and will try to limit increases to 10 to 15 percent of your previous salary. Yes, even though this policy is obviously shortsighted, the average PE wants to get a bargain. A bargain to him is as close to your previous salary as possible, assuming your previous salary is not high and he has no other guidelines.
To avoid negotiating from your old salary, you must give your PE some other basis for negotiations. One good basis is what the job is actually worth to other companies. Before going into the interview, you should obtain accurate salary information about the job, taking into account industry, function, tide, geographical location, and size of company. You can obtain this information from a variety of sources. Try to get a good idea of exactly what you are worth so you do not inadvertently price yourself out of the market and so you can speak with authority when discussing salary with a PE. Prepare your research carefully before you begin overt negotiations.
You have been alerted that an offer is about to be made. Now the PE will probably ask you, "What is your present salary level?" or "How much were they paying you at the XYZ Company?" or "What compensation do you require?", or maybe just, "How much do you want?" You should preface your answer by telling the PE that you researched compensation for the job, size of company, and geographical area before the interview. Then your pitch might go like this: "The American Psychological Association Survey shows a salary range from $37,000 to $43,000 per year, with a median figure of $40,000 per year. I believe you're looking for quality, or you wouldn't be seeing me in the first place. Therefore, I think that $X is fair. Agreed?" The X should be 15-20% above the salary range you have decided on earlier. And of course, the figures you quote from the survey should support your opener.
Another basis for negotiation available to every job hunter is the mythical offer. It can be used either by itself or in conjunction with your researched salary figures. If a PE asks you your present salary or desired compensation, say, "Well, I already have an offer at $X." If the PE balks at the range determined by your research, you can come through with the statement about your salary research. As long as you haven't priced yourself out of the market, the PE will begin to negotiate with you.
Sometimes I am asked the obvious question: Why not lie about your present salary make it much higher than it actually is and negotiate from there? I do not recommend this. Aside from any ethical considerations, it is easy for a PE to find out your actual salary if he wants to. A surprisingly large number of companies will release this information to anyone who claims to have a need to know. Some "friends" from former companies will gleefully give a formal denial when asked to confirm the figure you have stated to your PE. Or the PE could ask you to produce a W-2 withholding form or even your federal income tax return.
Then, of course, there are agencies that specialize in background checks. Ergo, lying about your present salary is not recommended.
If for some reason you are forced into revealing your current salary, there are acceptable tactics you can use to enhance your salary picture. You can give a figure that includes an expected salary increase. For example, if your annual raises have been averaging 10 percent over the last few years, you can add that expected 10 percent. Or you can include the dollar value of fringe benefits such as bonus, car, and stock options.
Why You Shouldn't Give Your Actual Bottom-line Figure Immediately
Negotiations require a good deal of "indirection" and patience, After the strain of a vigorous job campaign and the stress of the interview, many job hunters feel great relief and goodwill knowing that they are about to get an offer. As a result, they want to be direct and have done with it. "Look," they would like to tell the PE, "I know you want me, and you know I would like to come to work for you. I need $X per year in order to do this."
Such directness is generally a mistake. Even if you really have only one salary figure in mind, do not give it immediately. If you do, you surrender all psychological advantages to the PE. Any additional negotiating for example, moving expenses and other conditions of employment may be difficult to negotiate. He will expect an immediate figure for that as well. Many PEs enjoy negotiating and may not be as eager as you to conclude the deal. If you cite your actual salary figure up front, the PE will start to negotiate from there-and he will expect the bargaining process to be downward, never upward.
More than likely, your real salary goal consists of two figures which you developed from your salary research. The first is the highest figure you can hope to achieve, the second the minimum you would accept. Unless you know your top figure is way above what he can pay, and yet you still want the job, start out at 15-20% above your top figure. Negotiating position, and allow negotiations to continue regardless of what the PE has in mind.
