Negotiating the Job Offer (page 2)
Negotiation Strategies, When and How to Say "Yes" or "No" to the Offer
CONGRATULATIONS! YOU'VE BEEN offered a job…now you have to decide whether or not you want it.
Before you get to yes or no, it's important to realize that there is a correlation between how much experience you have and how much negotiating you can do. If you are just beginning your career, there won't be much room to negotiate. But you can strengthen your position if you know exactly how much the job is worth in the open market.
College career fairs probably gave you a good sense of entry-level salaries, but you can always do a little investigating on the Internet or at your local library. Most university and big-city branches have career-counseling offices in addition to copious reference materials. Many industry associations publish salary surveys. You can also check out the Salary Wizard™ on www.salary.com, which allows users to search— free!—average salary information by job title (and level), either by national average or specific to a particular U.S. city. The site provides a salary range (for base pay), the median salary, and additional information on a total compensation package (which would include the dollar value of possible bonuses, benefits—including Social Security, 401(k)/403(b), disability, healthcare, pension, and time off—and the net paycheck estimate), as well as other useful information. Or, make some calls to people you know who are already working in the business or industry you want to enter. If you got your job through an agency or a recruiter, ask the person you've been working with to advise you.
An important point to remember is that employers who hire a lot of recent college graduates are savvy about the going rate for jobs. They put an enormous amount of time and money into campus recruiting, so in all likelihood, they know even more than you do about the competition and what it can offer. Your best strategy is to look at the whole picture—not just salary—to determine whether a company is for you. For example, Company A may offer less salary than Company B, but perhaps Company A has a much better training program or an attractive bonus arrangement. Know what job features are most important to you, and give your priorities the most weight when making your decision.
The truth is that when you are looking for your first job, there is often little room to negotiate a better salary. If you really see yourself working at the company that wants to hire you, don't jeopardize a good job over a few hundred dollars—or even a few thousand. Having a positive feeling about your workplace is priceless. However, do keep in mind that you must be able to live on your salary (unless you are continuing to live at your parents' home or are otherwise subsidized)— it's very important to do the math while you're deciding whether or not to accept the job offer.
A great idea is to make a list of both the positive and negative sides of the job offer. Be sure to include facts about work environment, salary, benefits, and location; all of these aspects of the job will greatly affect how you feel about your job after the initial honeymoon period is over. It is extremely important to make sure that your goals are realistic. Try not to include unreachable goals and desires on your list (a promotion within six months or a six-figure salary, for instance); write down only what you could reasonably attain in your present position.
Sandy, an entry-level interpreter, offers this advice:
- Try to create a sample budget. Start with your rent—if you know what you will be paying. Then you will know the amount of your largest monthly bill. Ideally, your rent should be roughly one-third of your monthly take-home pay. Then there are utilities, such as electric and gas, cable, and phone. (Don't forget to include cellular and ISP charges, if you have these services.) Be mindful of student loans and credit card bills, too. In order to create or maintain good credit, you must pay these bills, in full, each month. Then budget for groceries, transportation, gas, furnishings for a new apartment, entertainment such as movies and dining out, and health insurance co-payments—it all adds up!
- Don't forget about taxes. If you are being paid $36,000 a year, do not expect to receive $3,000 every month. Chances are it will be around $2,200. (That's just over $26,000 per year. That may not even include 401K or health insurance.) Now, deduct all of the monthly estimated bills from your monthly take-home pay. Do you break even? If you're close to a balanced budget, but a bit over on the expenses side, try to trim your entertainment. Recalculate. If the amount you need to spend each month is still not close to your monthly take-home pay, then you have two choices: Call to decline the job offer because the salary is too low or find a way to supplement your income.
Lauren, a Web producer, adds this:
- Before you throw in the towel, be sure to tell the human resources representative that you're very interested in the job, but that you just can't make it on the offered salary. Add a few comments about how great the prospective team looks to you, and how you really picture yourself in the group. At this point, you've got nothing to lose except the chance at your dream job—inquire about overtime pay or the ability to do freelance assignments, maybe in another department.
- If there is still no flexibility for greater income, and you really want the job, consider other, part-time work that won't interfere with your career, such as waiting tables on weekends or working a couple of weekend shifts at the local bookstore or coffee shop. Although this is not optimal, you may need to sacrifice some free time to break into certain industries.
- For example, most media jobs pay very low salaries for entry-level positions, yet they continue to appeal to recent college graduates. For the young, independent folks who seek them, working a couple of nights per week the first year is well worth it. I stuck it out in my industry, and I often look back on the nights waiting tables, copy-editing, and tutoring as equally valuable training. I worked hard, balanced my budget, and even saved money to go on some great vacations. Just remember not to take on too much outside work—you don't want your boss to think that you're too tired at the start of your "real" job on Monday mornings.
Keep in mind, you will need to balance salary requirements with other aspects of the job opportunity. During the research phase of your job search, find out other positive qualities of a company. When you zero in on a job in a company that you really like, keep in mind that you will be spending at least 40 hours per week at this office. You will want to do work that challenges you, with people you like and can learn from. If these factors are sufficiently appealing at a particular company, chances are the financial issues will work out for you, too.
If there is something about a job offer that doesn't meet your expectations, bring it up as soon as you get the offer, rather than waiting for two or three days to say there's something on your mind. If you wait—and make people at the company wait—they will be less likely to negotiate.
Negotiating Tips for More Experienced Job Hunters
If you've had some solid work experience, it is possible to negotiate your salary based on three variables:
- Your total compensation package at your current job. This includes your base salary, bonuses, and benefits, such as company contribution to a 401(k) plan. In some cases, your new employer may want you to start working before you receive your bonus at your current job. Your employer may be willing to pay you the amount of the bonus (i.e., a "signing bonus") in order to get you to start by a certain date.
- Specialized skills or experience. Let's say you're going to work for a technology company and have a great deal of experience in computer programming. Your new employer may be willing to pay for your expert skills. Or, if you've worked for a large consulting firm and are now going to work for a boutique firm, your new employer may be willing to increase your salary because you bring broad experience to the firm. Fluency in foreign languages, being computer savvy, and having knowledge of any specialized field are all marketable skills.
- Salary benchmarking. Every job has a certain salary range. It's your job to find out that range through networking and other methods of research (described in Chapter 3; also, as mentioned, check out www.salary.com). If your prospective employer offers a salary lower than the going rate, you can say, "Based on my research, comparable positions in other firms are starting at X salary. I feel that I should be compensated similarly." And be sure to reiterate why you're worth additional compensation—i.e., what special skills or experience you have to offer the company.
When and How to Say "Yes" to the Job Offer
As much as you might want to say "Yes!" to a job the minute it is offered, it is wiser to wait, even if you're sure you want the job. First of all, take a deep breath and thank the person who called you with the good news. Tell him or her that you're thrilled and excited about the job offer but need a day to think it over. This is an accepted protocol: It is perfectly all right to ask the person who has extended a job offer to wait 24 hours for your answer.
However, it is completely unacceptable to keep him or her waiting for a week. If you get a job offer on a Friday, say that you will call back on Monday with your answer. But if you get an offer on Monday, you should reply on Tuesday, unless you have not received certain information you requested, such as a written job offer or a letter outlining the benefits package.
In the 24 hours you have to consider whether you want a job—and even if you are sure you want it—there are a few things you need to do:
- Review the chart you made that lists the ten factors that must be satisfied before you will accept a job—just to make sure that you haven't overlooked anything. Is there anything the job is not offering you that you wish it had? And of the things you're not going to get, are any of them deal breakers?
- Is there a way to negotiate getting some of the things you want?
- Before you go too far with your plans, ask a mentor, parent, or friend to act as a sounding board.
Take this time to think about the interviews you've had with the company. If you've established a good rapport with your interviewer, it's easy to overlook certain points. Before saying yes to a job, know all of the specific factors listed in Exhibit 8–1.
At first glance, the job specifics listed in Exhibit 8–1 may seem obvious to you, but do yourself a favor and double-check with your contact at the company. Company protocol often dictates that you receive an offer letter, stating the conditions of your employment. If something is missing from the letter, especially something that was promised orally, ask that you receive a new letter or addendum.
For example, Claire, a New York publicist, had a great interview with a company based in Los Angeles. At the second interview, salary, job title, and benefits were discussed. In fact, she was offered the position of senior publicist for a branch office that was scheduled to open in New York in the near future. Claire accepted the job, which was offered by her prospective supervisor, a vice president with the company. Based on that meeting, she gave notice at her current job and then made plans to start with the company at its New York office.
However, there was one enormous snag: The opening of the New York office was postponed for almost four months! Although Claire's supervisor—the man who offered her the job—was the VP in charge of hiring, he was not in charge of deciding when the New York office would be launched. Because of this unfortunate timing and her reluctance to clarify the terms of her employment, Claire was left without a job, waiting for her employment to begin. It is vitally important to know all the specifics before accepting a job, especially details as basic as your start date.
It's perfectly acceptable to negotiate salary, vacation, and so forth with a company, but be careful about asking for too much—your judgment and maturity might be questioned, and you could be perceived as someone whose expectations will always be higher than what the employer can deliver. Do your research and base your expectations on the normal compensation of a person in your position with this prospective employer.
Knowing What You Want
In today's fast-paced economy, it is not uncommon to receive multiple job offers. Getting more than one offer at the same time is heady stuff, but it can be confusing if you aren't completely sure what you want. If you get flustered and make a wrong decision or say the wrong thing, don't panic. It isn't impossible to do a little damage control. But first you need to decide which job you really want.
For example, say you've interviewed with two companies: Company A and Company B. You really want to work for Company A, but you get an offer from Company B first. In your excitement, you call Company A and inform them that you've had an offer from another company. You tell them that the other company wants your answer by Friday. Then, you ask Company A to give you their answer by Friday. You are promptly told that a decision cannot be made by Friday because the decision makers are in Europe and will not be back until the following week.
At this point, you don't know what to say. Maybe you're suddenly overwhelmed with doubts that if you don't say yes to Company B on Friday, you will end up without a job. After all, even if you wait, you may be turned down by Company A. Out of panic you say, "Well, I guess you should take me out of the running." Or perhaps Company A takes the initiative and says, "In that case, we're going to have to take you out of the running." As you hang up the phone, you realize—with a sinking feeling—that something really bad has happened. Now what?
Honesty Is the Best Policy
After a little honest self-appraisal, you realize that you do not want to work for Company B at all, and that it was probably a bad idea to put pressure on Company A to give you an answer by Friday. So here's what you should do in this scenario.
The next morning, call Company A, apologize for pressuring them for an answer, and tell them that you've re-thought the situation. Go on to say that the job with Company A is a much better opportunity than the one offered by the other company, and that you are willing to wait for Company A to make their decision. At that point, your name is put back on the list.
Initially, you may have made a mistake with Company A, but ultimately their decision making about you will be positively influenced by these factors:
- You really want to work for the company
- You are willing to turn down a sure thing—an offer from another company—just to stay in the running
- You are honest
- You take initiative
- You take risks to get the things you want
You should also keep in mind that many firms will be somewhat flexible about the amount of time you will be given to make a decision. In the scenario you just read, it would be perfectly acceptable to call Company B and explain the situation. Say that you are waiting to hear from another company, and, although you remain enthusiastic about its offer, you want to be able to consider all of your options before making such a big decision. You are demonstrating to Company B that you are a careful and prudent decision maker. And the worst that can happen is that you will not be given an extension—in which case you are no worse off than you were before.
Getting What You Want
Finally, you've received the call you've been waiting for, and you can't believe the offer is for real—until your contact at the company starts talking about money. You've already stated what you want to make as a salary, but now the company is offering an amount that is much less than you expected. The feelings of euphoria you felt earlier vanish altogether when your contact tells you that there's absolutely no flexibility where salary is concerned. When you ask why, he explains that there are people in the department who have more experience than you and who have worked there longer. If the company paid you more, there would be a salary inequity. Clearly, there's no room for negotiation.
Making less than you had anticipated is a setback. But, as you've read earlier in this chapter, there are good reasons for taking a job anyway— especially if it's the job you want and the company offers other compensation enhancers, such as stock options, health club memberships, or funding for extra training or education. If your salary will be a little less than you'd counted on, consider asking about some of the following forms of compensation:
- "Would you be able to conduct an earlier performance review, say after six months?"
- "Would you be able to offer a sign-on bonus?"
- (If you are relocating), "would the company be willing to help with some moving costs?"
There are two reasons why the company might be willing to give you funds, other than salary, for any of the above:
- When you are paid a salary, the company is actually spending more money than you are getting as salary because it has to add on payroll taxes, benefits costs, and various other expenses involved in keeping you on the payroll.
- One-time payments such as relocation costs and sign-on bonuses usually come out of another part of the company budget—not salary.
Here is an example of a tactful, yet effective strategy to negotiate a little more, if the salary you are offered is lower than you expected and lower than you can live on:
- I am extremely interested in working with you and your company. Unfortunately, I cannot accept your offer at this point, because the salary will not allow me to move from San Diego to New York City. If you were able to offer an 8% salary increase and pay a portion of my relocation expenses, I would gladly accept the position immediately.
In this scenario, you have clearly demonstrated your interest in the offered job, but you have also made it perfectly clear that you need more from the company. You have thoroughly considered the job offer from every angle, and you have opened the doors of communication firmly but professionally.