Thursday, June 20, 2013

Negotiate Offers Carefully



Disclaimer:
Negotiation is both an art and a science.  Some important factors which are crucial to this process are timing, research, and judgement.  A simple blog post cannot address these variables.  I am not an Attorney, nor am I a Financial Planner or a Certified Human Resources Professional.  I am just The Jobs Guy.  While I do have many years of experience helping thousands of people in their careers, my opinion and advice is meant to substitute for the advice from an Attorney, Financial Planner, Human Resource or any other type of relevant professional. 

Navigate the First Negotiation/Job Offer
At this point, you've assessed yourself, your interests, strengths and abilities. You used Imagine, Research and Ask to develop an effective Core Message. You presented a coherent, targeted self-marketing strategy to a specific group of companies and have succeeded in getting a job offer. Congratulations. Way to Go! Be excited, be happy, be proud, thump your chest and release a primal scream! ...Ummmm....slow down a second, they're still on the telephone or staring at you from across a conference table. To quote the first fictional robot to have an anxiety disorder, “Danger, Will Robinson! Danger!”

To deal with this job offer situation the best thing you can do is to remain calm (or at least calm-sounding). At the same time, you must convey enthusiasm. Smile, even if it is a telephone offer-they'll hear it in your voice. At this moment, you have three primary goals: 1. Get all of the details of their offer that you can. 2. Buy some time to think. 3. Set up a follow up meeting/contact to close the deal.

I recommend starting off by listening first. Get to a pen, crayon or computer as quickly as possible. This will undoubtedly be the moment that the pen is dry, the crayon needs peeled and the computer won't start. Hopefully you have prepared in advance. At any rate, listen carefully, get the details and then buy some time.

No immediate answers, ever. Immediate responses are how people wind up in high pressure time-share condo deals and quickie marriages in Las Vegas (Apologies to Time-Share Salespeople and Britney Spears). If this company really has gone through a process and selected you, they'll give you a day to “Sleep on it”, “Discuss it with my family”, or “...review the match so that I can do the best job possible”. You need to show (or at least feign) interest so they don't simply check you off the list and proceed to Candidate B. Requesting 24 hours to consider a major decision which will impact your life, your family and your future is not unreasonable. If they are less than understanding about that point, maybe you are better off without them. You need a moment to think and they need to know that you are seriously considering them as well. Setting up a “hiring meeting” for the next day is one way to accomplish those goals.

Are there situations in which the company absolutely must have your answer right that minute? I suppose an oil well drilling company that needs you to put out their burning well might qualify. But, you'll know when you are in a special situation and the cost of your services should go up accordingly.

Regardless, let's assume that you have moved on to the hiring meeting to negotiate and finalize the details.Please note that some companies and positions do not negotiate. The position may be predefined because of union contracts, or it is an entry-level job and they do not need to negotiate with a potential employee. The following tips are only for clearly negotiable jobs.

The First One to Mention a Number Often Loses.
In a job involving negotiation, the work that you performed earlier (Imagine, Research, Ask) continues to pay off. Your research has probably given you a salary range, a reasonable guess at the benefits package, hours, duties and so forth.

In terms of the mechanics of this negotiation, the first one to mention a number loses. This is a critical point, because that establishes a baseline. If you have honestly reported your previous salary history (discussed elsewhere in this blog), they have a concept of your baseline. This is now problematical for you.

As an example, I once hired a highly competent professional who did not negotiate well. She was fabulous at her job and after going through the selection and hiring process, she was clearly the top candidate. Entering the negotiation, my concern was that I would not be able to afford her services. The total budget was only $40,000 in salary.

At the hiring meeting (third interview), we had a bit of thrust and parry. Initially, she wouldn't mention a number and as noted, I know better. So we stalled, until I asked “Candidly, what did you make at your last job?” She should have dodged or avoided (some people would lie, but that is not needed). But, she told me “$35,000.” In that instant, I 'won'.

My job was to conserve resources for the non-profit agency while attracting the best talent. When she mentioned $35,000, I knew I could succeed and make her happy at the same time. I told her the truth; “That's not the budgeted number for this position at this time.” She assumed our original budget was lower when it was really higher. So, I said “Let me talk to the CEO about this.” I walked out of the Board room and into the Boss' office. “I looked at him, and said “I am about to offer the best candidate $3,000 less than budgeted and make her happy. Are you in agreement?” Ten seconds later, I was back in the Board room and related “I talked to the CEO and I have his approval to offer you $37,000, based upon your previous salary history. Do you accept?” She saw the job as giving her a raise, did a great job for us for a long time and, up until now, never knew she could have made more money.

I know that some people are going to read the above vignette and think “Oh my. He is a Licensed Social Worker and he took advantage of that poor woman”. In my defense, this is a financial negotiation and can be a somewhat adversarial interaction. I was obligated to find the best solution possible, and I used that $3,000 toward helping people with disabilities to get jobs.

My employee failed herself because she did not do her research. This position was funded by a grant from another non-profit, as she was told. She could have emailed the organization that provided the funding and requested the budget forms as awarded. They would have emailed the actual budget to her. Heck, the project budget was listed on their website. Her failure to research was not my responsibility. My job was to get the best people available for the lowest price. I did that and used the savings to extend the mission of the grant. The HR Professional or Hiring Manager you will be negotiating with is in a similar position.

In my opinion, it is vaguely possible I have not quite beaten the salary negotiating point to death. First of all,be nice and be reasonable. I am not advocating playing hardball here. But this is a financial negotiation and it is important. Also, let the buyer beware. Companies might not always tell the absolute truth. YourResearch can help you judge this as well. At any rate, here are some phrases to help you avoid their attempts to nail you into a baseline.

When the employer asks something like “What do you expect to make?”:
-”What did the previous employee earn?” (The previous employee probably was there a while and got some raises. Starting at THEIR baseline might be good for you).
-”What is the typical salary range for the position?” (And if they give you a range, you are going to make a sour face and start working from the top).
-”Where do you expect most people to begin?” (Of course, you will be able to demonstrate that you are better than most people because of your Research and Core Message).
-”Given the lack of ______(tuition reimbursement, free childcare, carpooling, etc), what do you normally offer?” (Be careful not to sound too negative here).
-”When do you normally evaluate a new employee and adjust salary?” (Vaguely on topic and sets a table for an early employee evaluation and raise).
-”Is the commission structure cast in stone?” (For some sales positions, perhaps you can get an additional point or two).
-”Are there additional responsibilities I can start with, to demonstrate my value?” (Only vaguely on topic, but again setting the table for justifying a higher starting point for you).

And the list can go on longer than 'The Simpsons' on Fox. The point is to answer these questions with other questions. The first one to mention a number loses.

Now the baseline is set. Benefits can also become negotiating points. This applies to vacation time and other things you value. I once turned down a job for which I was desperate. I had spent 7 years getting the experience and education needed; they offered. I declined, citing the pay and my college tuition bill. They wanted me, honestly had no more cash and offered an enhanced package of benefits (start health insurance 1st day, gave me same vacation as 10th year seniority). I took the lower salary and enhanced benefits. I loved the job, enjoyed 4 weeks vacation each year busted my butt for them and my clients. As noted, I loved the job, and the extra time off gave me the energy to excel. I exceeded established goals regardless of the extra time away. And we both felt that we “won”. Done properly, negotiations can have a win/win outcome.

Your Job Offer, Part II
Different industries and occupations have their own way of dealing with a job offer. It is unlikely that the Manager at a fast food restaurant is going to send a registered letter on vellum parchment (Yes, the Author is aware of paper making...he has chosen to annoy the Book Binders and Grammar Nazis on purpose) for the person who changes the fryer grease. You did get a job description and specific offer letter after accepting their offer and before starting? I didn't think so. You got all excited and forgot to take care of business properly. It is human nature to get excited at these times and to forget to focus on the details.
Typical job offer elements often include date of offer/start date, salary/bonuses/stock options/other financial incentives, job title, benefits package. For professional positions, this is often sent as a hard copy letter from the personnel office.

Good luck and Best Wishes,

Chris

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