Tips for a productive salary negotiation
Many of you would rather scrub your bathroom tile with a toothbrush than talk with an employer (or future employer) about salary. Even though you need to, and expect to, get paid a reasonable amount for your work, you fear the act of getting there. There are likely a few reasons for that; 1. you don’t know how to negotiate, 2. you feel shy about asking someone to pay you more, 3. you really don’t know what you should be making and you’re hoping someone will just tell you, 4. you realize you are making too much for the value you provide and don’t want that dose of reality. Let’s face it, unless you are a professional arbitrator, you probably don’t practice salary negotiations very often (and if you do, you might have other career development concerns) so let’s talk through 5.5 basic techniques for talking through compensation with an employer – see how much you already know…
- Know your market, know your value Before you begin your search in earnest, you should not only investigate the viability of finding a position, but also what that position will likely pay you. I’ve found that many salary reports clump Colorado into either the Rocky Mountain region or the Southwest Region. In the Rocky Mountain region we tend to be on the upper end of the scale and in the Southwest, on the lower end. As well, Colorado employers successfully play the ‘standard of living’ card – and justifiably – this is a great place to live/work/make a life! Also, the Denver Metro area demographics are pretty young, resulting in a bit lower compensation comparison. Finally, the industry, the availability of talent like yours, and your education status beyond your undergrad will all factor into your market value in Colorado. You should seek information from multiple sources (job boards, chamber of commerce, recruiters, colleagues) to compile your data.
- Ask for a LITTLE more than you really want Negotiating 101 says that in search of any desired outcome, you should ask for more than you expect to get. Now, I agree with this, however multipliers don’t really apply here. You shouldn’t ask for 4x what you want and hope that you’ll get 2x. Being reasonable is the key concept. If you’d like a salary of $70k and the salary range for the position is 65 – 90k you shouldn’t ask for 90k (unless you possess every qualification in the position description and are really over-qualified). Rather, ask for 77k and you’re likely to get something between what you want and what you’ve asked for. ‘Going for broke’ will probably mean going broke.
- Play fair, Play real Here are a couple of real stories from job seekers in Colorado to illustrate my point. One gentleman that I interviewed a couple of years ago provided me with a compensation number that was, in my mind, very unreasonable. When I questioned him about this number I found that he had included his base salary, cost of his computer, cell phone, cash contribution by the company for his healthcare/life insurance/short term disability, and anything else he could calculate – and provided me with that total as his last salary. Ummm, nope! In another case, a very talented professional who recently relocated from California told me that he didn’t think that a geographic adjustment was necessary as his reason for relocating had nothing to do with his salary. Well, I understand that but… Anyway, I know that you don’t want your last salary to be a factor in your next compensation package, but it will be. By being open and honest about what you make, and have made, you demonstrate trust and authenticity – your employer will appreciate that and 9 out of 10 companies want to pay market, not get away with a cheap hire.
- Evaluate the money value of other perks and benefits Some components of an offer package have hard dollar value, don’t discount them. An extra week of time off, a bus pass, membership to a health club, 401k matching, and healthcare contributions can all be assigned a dollar value. If you don’t have to pay $60/mo for the gym membership then you’ve received a $720/year raise. A match on your 401k not only nets you the cash, but also the tax benefit. A bus pass, if you use it, will save you fuel costs, parking, wear on your vehicle, and lower your commute stress. These perks save your employer money too – keep these real dollars in mind – beyond your salary.
- There is ALWAYS a Ying and a Yang A company that is willing to pay over market for a position MAY expect long hours, weekend work, heavy travel, or burden its employees with an unreasonable workload. As well, a company that pays less than market may not place a value on your skills, be financially unstable, or be used to working with inexperienced people. Neither of these scenarios is wrong. Find out what is behind the salary range, and then make an informed decision.
5.5 The rule of Thumb is, there is no rule of Thumb. We’ve all been programmed to think that we must always be moving up in our careers; more money, more prestige, more responsibility, more perks, more, more, more. That is simply not true. There may be life events that necessitate less (or different). Caring for children, aging parents, our own health, running for office or just taking a breather. Life is what happens while you are busy focusing on your career. You have 40, 50, or 60 years to work in your lifetime and you will likely move up, down and sideways as various points. Taking a step back doesn’t necessarily mean you’re a failure and moving up doesn’t necessarily mean you are a success.
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