Sunday, May 24, 2009

Laid Off? The Art of Salary Negotiation

One of the most painful aspects of a job search for most people is discussing compensation with the potential new employer. What are your services worth to a new company? Every company is different, even in the same industry.

In my first blog, I discussed taking stock of your skills. Later we discussed the importance of including your impacts in your resume and interview. Some people have told me that “I just did my job. I don’t have any impacts.”

If you “just did your job” of course you made impacts! Hopefully you did the best job that you could. For instance, let’s say you were a cashier. When you are finished with your shift, does your cash drawer balance every time? Isn’t that a positive, measurable impact? You can talk about being detail oriented and dependable, qualities that every hiring manager seeks. Wouldn’t it be cool to be able to say that “My cash drawer balanced every day for the past 4 years?” Even some modest “C” level candidates have made that comment during the distress immediately following a reduction in force. One place to look for your impacts is your old annual reviews.

Therefore it doesn’t matter whether you are an executive or a cashier. The complexity of the work is the difference between the jobs. Both levels of work are important to the successful company.

Let’s get back to discussing compensation conversations. First of all, Congratulations on receiving an offer!! As a candidate, it is important to understand the value that a company puts on a job. If you were contributing at a high level within a large company, you may be surprised how the value may change in a smaller company. In some smaller companies, your value may be valued substantially higher. Whereas in another company, they may feel that you were over compensated. It’s a minefield out there!!

Actually it’s not that bad. While many companies do not understand that “Recruiting IS Sales”, you may use that to your advantage. Most recruiters do not want to waste their time. If they ask you what you were making at a previous job, respond by asking “What is the compensation/salary/hourly range for this position?” Many times their response will save everyone time. Simply put – if the company does not value the work produced by this position you either have a wonderful opportunity to prove them wrong; or you may have a situation that will provide you with many frustrating days if your work is not valued.

For instance, a couple of weeks ago I received a call from a recruiting firm asking if I would be interested in a contract recruiting consulting assignment in Des Moines. I said “Sure.” Then I asked the hourly rate the client was willing to pay. She replied, “$17.50 per hour.” I chuckled and told her that I haven’t worked for so little since the 1970’s. Obviously they did not value recruiting very highly.

Hourly workers have less room for negotiation than higher compensated salary workers. A way for anyone to try to begin a salary negotiation is to ask “if there is any flexibility in the offer?” They may say, “Why do you ask?” If they do, they have cracked open the door for a discussion to increase the offer. Then you may mention some of your “wish I would have said comments” from your review of the interview. Then ask if they may be willing to increase the offer base or give a signing bonus. Sometimes companies are willing to give an extra week of vacation or increase the relocation package if that is required. Don’t expect a large increase in your base compensation. Generally they have extended an offer that is within a range in their budget or comparable to others in similar positions in their company.

If the person who is extending the offer says that it is their final offer, you have a decision to make. As a result of your interviews with them, do you feel they are going to promote you if you do a great job and make positive measurable impacts? If the answer is yes, and the offer is close to your requirements, then you may accept. If the answer to that question is no, then you should think hard about declining – but do so in a positive manner and ask that they get back to you if another position opens where you may be able to make impacts. As the RecruiterGuy, I have had several experiences where the company realized that a candidate turned out to be the right one, realized the offer was too low, and they later came back with a higher compensation package. That doesn’t happen often, but it does happen.

Negotiation is an art not a science. Most importantly, remember not to take the negotiations personally. While I realize that it is personal to you and your family, remember that essentially you are “selling” your services to the new company. Therefore this is a sales situation and objectivity is important. Don’t be afraid to walk away from an offer that is too low. It obviously is the wrong position for you. We spend too many hours working to be frustrated in our job. Again, if they do not value the position highly enough to pay your worth, you will be frustrated almost daily.

Please do not fall into the trap of asking “for a week to think about an offer” that you know you are going to accept. What do you gain by doing that? What do you lose? They may feel that you will accept but keep looking. That’s not a positive way to begin a working relationship. On the other hand, what happens when you accept that same offer immediately? You send a message to your future manager and company that you are excited about working with them. Isn’t that the way to begin your professional relationship?

Now I am going to touch on a sensitive subject. Even if you are religiously devout, it is best if you do not say that you are going to “pray on this offer”. If that is the case, hopefully you have been praying through the whole process. God probably has already indicated whether it is right for you. You just need to listen. The reason that I mention this topic is I received that response more than you would believe over the years. If you insist to respond in that fashion, the result may be that the company will find a way to rescind the offer because you concerned them that you may spend time proselytizing during work hours, not working. Just say, “I’m excited about your offer. May I get back to you tomorrow?” Keep it simple.

Once you accept your offer, honor your commitment. When an offer is accepted, a company stops all recruiting on that position. The manager is excited that you accepted and has probably already penciled you into some projects or scheduled you to work. If you change your mind, they have to begin recruiting from the beginning and that may put them months behind. Obviously, you should never expect to work with them in the future because your integrity is now called into question.

If you are employed, it is best to give two weeks’ notice. It is the expectation of your current employer. You never want to burn bridges. In another blog I will discuss the trap of counter offers.

Hopefully the information presented here helps you in your negotiations! Remember; use examples of your impacts at other companies and REMAIN POSITIVE! Good luck!