While carpooling home from work one afternoon, Jason Andress learned, quite by accident, that he was paid significantly less than his co-workers. Although he had the same qualifications and was hired around the same time as his higher-paid co-workers, he earned approximately $4,000 less than they did.
His first assumption was some vague sort of discrimination. Later, he realized that he was simply the victim of poor negotiation tactics. While the rest of his co-workers had negotiated their starting salaries, Andress had allowed his employer to take control of the salary discussions. Desperate to get out of his former job, Andress had accepted the first offer that came, without bothering to bargain for some extra money.
"It infuriates me that I am paid less," laments Andress. "After all, I was just as qualified for the position as everyone else."
In today's business world, a professional is expected to negotiate his or her salary. It's the last test before employment -- an examination of the employee's will and resolve. "The first offer is seldom the highest offer. These days, everything is negotiable," explains David Koehler, vice president of Clarke & Associates, an Orlando executive search firm. "You should never blindly accept the first offer."
Most people don't understand the importance of negotiating a starting salary. Because all raises and bonuses are based on current salary, your entire future can be jeopardized with poor negotiation skills. All raises will be markedly lower if you don't succeed at the bargaining stage. The following tips will help you negotiate a fair compensation package without offending your future employer.
Determine beforehand exactly what you want to achieve in the negotiation. Approaching the bargaining table without a clear view of your goals is like showing up blindfolded at the airport. You'll manage to get somewhere, but you won't know where you are once you get there.
What are your expectations? Are your needs negotiable? What is your minimum requirement? When you're preparing to negotiate your compensation package, think about what your work means to you. Is it your source of satisfaction, or is it simply a way to pay for the things that you truly want? Understand your motivation before you enter the interview. With proper preparation, you will be able to arrive at a deal that truly meets your personal goals.
Know your market value. This is determined by the supply and demand of the talent pool, level of difficulty of the job, prestige of the company, and interchangeability of skills. If you can offer something unique to the company, you have tremendous bargaining leverage.
Here's an example culled from the headlines. Although it involves ridiculously high amounts of money, the lesson is important. In late 1996, the six stars of NBC's sitcom "Friends" wanted to renegotiate their salaries. Although they were earning $35,000 per week, their bosses were earning approximately $5 million for every episode. The stars wisely understood that without them, there was no show. They were the product, and their market value was phenomenal.
The negotiations went quickly. Warner Brothers, the producer of "Friends," doubled the stars' salaries. At the same time, they made all six actors commit to an extra year on the show. Both sides got what they wanted, and everyone left the bargaining table happy.
Even if you aren't a wildly successful, overpaid sitcom actor, you can benefit from this example. You've got to recognize your potential or actual contributions to your company, and capitalize on your success. The company isn't going to offer you more money and benefits out of the blue; you have to ask for them.
Another strategy: Avoid figures. When a potential employer asks what you're hoping to make, it's best to counter that question with another question. "Ask him what he expects to pay," admonishes Koehler. "Make him throw out the first number. What if you want $70,000 per year, but he's planning to pay $80,000? You've just cheated yourself out of $10,000."
When the employer names the salary range, don't be discouraged. Usually the company's "top figure" is the midpoint of the range. Most can still go up another 20 to 25 percent.
Don't be greedy. It's easy to price yourself out of contention for a position. You may be the consummate professional, but there are always desperate applicants who will do the job for less than you will.
About a month after the "Friends" salary hold-out, Malik Yoba and Michael DeLorenzo, two stars of the low-rated series "New York Undercover," pulled the same stunt. They wanted a threefold increase of their $25,000 weekly salaries. The show's producers slapped the actors with a $1.2 million breach-of-contract suit and had an open casting call for new actors. Eventually, one of the actors was fired. Producer Dick Wolf said, "These gentlemen have an inflated view of their importance."
Greed will kill a promising deal. Your objective is not to squeeze every last dime out of the company. Instead, you should aim to create a mutually beneficial agreement that will enable both you and your company to make money. Everyone will walk away a winner, and no one's pride will have been hurt.
Never accept the first offer on the spot. Even if the offer is higher than your wildest dreams, it can't hurt to wait a day before accepting it. "You should thank the interviewer for the offer, and tell him you need a day to think about it," explains Koehler. "Walk away from it. It puts some doubt in their mind, which will give you more leverage when you are negotiating the figures."
You can't leave the interviewer hanging indefinitely, though. "Set a time when you'll get in touch with them," instructs Koehler.
Ease into the negotiation. When you return to accept the job, explain that you are excited about working for the company and that the job offer looks great -- except for one small thing. The recruiter will switch into his or her "negotiation mode" and will ask what the problem is. It is then that you can begin to negotiate the salary.
Be prepared to make some concessions. Just as the "Friends" cast members had to sign another year's contract, you will have to concede to some of your prospective employer's demands.
This is also the time to ensure that you get the perks you want and deserve. If they can't match your salary requirements, use this opportunity to bargain for extra vacation days or benefits.
Be bold. The interview and subsequent offer may be the only time when your boss is available and willing to meet your requirements.; ;
Chances are, the interviewer will be impressed with your initiative. Good negotiation skills are an art; your prospective employer will be glad you have the assertiveness and self-reliance to guard your best interests.
The last recommendation might be the hardest: Be prepared to walk away. Unless you're desperate, you should be willing to give up the job if they can't meet your requirements. You'll only end up feeling miserable and underpaid.
Walking away is also a chance to get another offer. If the company really wants you, they'll find the money somewhere. Don't count on it, though. Sometimes a company simply doesn't have the money you're looking for. If this is the case, keep looking for the perfect position. It's out there somewhere.