Wednesday, March 14, 2012

10 Tips for Negotiating Your Salary

Your heart races. Your palms are sweaty. Your mouth is dry. Pound!...Pound!...Pound! heart is about to fly out of your chest...

If you've been faced with negotiating your salary you're likely familiar with these feelings. After surviving the interview process, this is probably the hardest part about taking a new job.  There's no doubt that it's not fun and no one likes it but if you don't do it right you are seriously losing out by leaving money on the table.

You need to remember a couple of things. First, no one works for free and the person offering you a job knows this. Second, everything is negotiable. EVERYTHING. The process of negotiation involves two parties with mutual yet sometimes conflicting interests working together to find common ground. It is important to remember that both parties want to find a suitable agreement and that each will need to give and take in order to make that happen. The employer wants you and has a number in mind they would like you to accept. They also have a number they are willing to go up to in order to secure your services. Likewise, you want to work for the employer. And likewise, you have a number you would like to make as well as one you can't go under. Now, the trick is finding out what each other's numbers are.

The worst thing you can do when accepting a new job is accept less than you think you are worth. Even though you think you won't, you'll end up resenting the employer because they are under valuing your services and that could harm your entire time of service at that organization. Yes, this process may be uncomfortable for a few minutes but accepting less money than you need and want has the potential to be uncomfortable for years! And once this process is over, any reasonable employer isn't going to give the negotiating process a second thought. They will be glad they have you aboard and be ready to get started.

1. Be prepared for the negotiating process. Do your homework and find out what positions such as this one pay in your geographical area so that you can set your expectations. Then you'll have a scale on which you can place the initial offer to know if it is high, low, or just right. When you feel that an offer might be coming, make sure you spend some serious time thinking about the salary and your own financial picture. We all have bills to pay. You need to know how much you need to earn in order to really assess if what is being offered will be enough for you to live on. Realistically, think of your salary in three ways: Bare minimum you need, the amount you can settle for, the amount you want. Head into the negotiating process with a clear head so you'll know how the initial offer will affect your life.

2. Don't become emotionally attached. You need to be willing to walk away if you can't get the employer to offer the amount you need to live on. If you have $3000 per month in bills and they offer $2700 a month and won't go a penny higher you can't take that job. It's that simple. Be ready to respectfully decline the offer and walk away.

3. Listen to the offer. Thank the person for such a generous offer. Tell them you are very excited by the possibility of working for them. And then ask them when they need a response because you need to think it over. Hopefully they'll give you some time to go away to "think" a counter offer. At the very least, try to get them to agree to let you think it over one night and then call them with an answer in the morning. If not and they need a response right then and there, take a minute or two to gather your thoughts. Remember, you should be prepared for this (see step #1) so it won't be that big of a deal to do it on the spot. And then launch into the process of a counter offer.

4. Consider the benefits package. Your compensation isn't just the amount of money you are taking home, although that is obviously a substantial part of it. It's the entire package you are being offered including: sick time, vacation time, personal days, medical and dental benefits, retirement options etc. Factor all of this into your thinking. Maybe they aren't offering as much money as you'd like but the other benefits are so terrific that you can afford to not bring home as much in your paycheck.

5.  Always ask for more money. ALWAYS. You will never know if you could have gotten more unless you ask. And trust me, they aren't just going to thrown more money at you then they need to so you absolutely have to ask for more. Determine your counter offer. Don't be afraid to ask for more money. It's what you are supposed to do. Even if you only get a few hundred dollars, your first salary increase, every increase thereafter, and any potential retirement contributions they make will all be based on that higher number. So you won't just be making more now, you will be affecting your future earnings.

6. Make your counter offer higher than you really want or need. This one is tricky. How much higher should you go? You need to counter with something within reason so don't be greedy. But at the same time don't short yourself. Your real goal here is to create wiggle room in the negotiating so that you can have room to come down to where you need to be while getting them to come up as high as possible. If you get the high counter offer, then you've just made extra money. If they counter it, you'll have a place to go down to without going further than you want or need. Use this initial high counter and work down from it to where you need to be.

7. Ask about standard of living increases, merit increases and bonuses. When are they awarded? What is the criteria for determining such increases? Can you get more money now and defer your first increase? Can you accept less now but increase the level of that first increase? You need to know how your future salary is going to work as much as you need to know about your current one.

8. Once you land on an acceptable salary, start talking about everything else. Are there other places the employer can give if they aren't giving on salary? Is there a charge for parking at work? Can they buy you a permit or at the very least increase your salary to cover parking? Can you get additional vacation days, personal days or sick days? Can their contribution into a retirement plan be increased? Is there any subsidy program offered for using public transportation? What is the health insurance like? How much of the premium does the employer pay? This is your one and only chance to find out about your benefits package and see if there is room for the employer to improve it. Again, if you don't ask they won't improve it. So ask.

9. Find out about your hours. This is the time when you want to figure out when you will be working. Is it 8-4, 8-5, 9-5, or 9-6? Is there a lunch break? Do they have a flexible schedule program? These days many employers are willing to consider work from home or other flexible schedule scenarios and you'll never know about them unless you ask. You need to know heading into the job when they will expect you to be there and if that will work with your life so ask about it now rather than on your first day and come to an agreement before accepting the job..

10. What if they say "NO!"? It depends on what they are saying no to. If they are saying no to your need for more money and you can't possibly work for the amount they are offering and they won't budge then you need to think about declining the offer. But if they are saying no to something relatively inconsequential that doesn't mean that much to you, accept the no and move on in the conversation. No big deal.

Always remember, you'll never get anything unless you ask for it. Employers aren't in the habit of offering employees extra money and benefits but that doesn't mean they won't.  The only way to find out if they will is to ask. They are going to offer the minimum they think they need to offer in order to secure your services and it is our job to increase that offer in any and every way possible. Everything about going to work for an organization is negotiable even when they say it isn't. Just ask.

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