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Negotiating Salary

Negotiating Salary Most people realize how very important a respectable salary can be in the real world. On the other hand, most people don’t know the first thing about how to effectively negotiate what they are worth to prospective employers. “Most people quickly accept the first offer presented to them” (Martin). The purpose of this report is to address the proper ways to effectively negotiate salary and benefits. Many components are involved in successfully negotiating salary and benefits, such as researching a job’s current market value, your financial needs, your worth, interviewing, and other various aspects of negotiating salary and benefits. Current web sites, as well as books were used to gather data for the myriad of information involved in negotiating salary. Furthermore, two personal interviews were given to gain contrasting perspectives. A steadfast member of the Human Resources department at Robert W. Baird & Co. was interviewed to get an insider perspective, as well as a fervent recent graduate of the University of Wisconsin – Platteville in search of a career, for an opposing, personally relatable angle. The negotiation process is probably the most crucial point of the job interview. Many people, however, consider negotiating salary an uncomfortable part of the process. “Unless you are an attorney, or someone who arbitrates for a living, chances are that you do not enjoy these situations” (Jensen). All too often people accept the first figure thrown at them by their prospective employers, leaving little or no room for negotiation. Negotiating salary is a multiple-step process that involves careful consideration and research. Knowing where you stand and what you want is paramount before even beginning to interview. There are several steps involved in becoming an effective negotiator. DETERMINING SALARY RANGE FOR THE POSITION You are one of the last candidates for a job and an offer was extended. How do you know the offer is acceptable? According to The Career Services Center Guide to Negotiating Salary, “determining the market rate salary range for the type of position in your particular industry,” is the first step to make. Knowing what the position pays on average can save you from accepting an offer that is too low, or from asking for too much. There are several ways to research salary range for a particular position. Many college campuses keep a collection of salary survey information. Job listings in the newspaper may also be a good source to gauge salary on. Friends or networking contacts, professional associations, and other job seekers can be useful as well. Review business or trade periodicals, or use on-line resources such as Salary.com, pictured below in Figure 1-1. Salary.com allows you to select from a list of occupations to find one that matches yours. Then, enter the location you live in, or you are job-seeking, to get an average salary range for that field and region. Resources such as these can be very useful in giving you a positive edge before even going in to the interview. Another aspect to remember is the total compensation package. Other factors can make a $35,000 salary seem like $50,000. For example, good insurance plans, bonuses, 401K plans, tuition reimbursement, continued training, paid vacation, stock options, company car, etc. The list goes on. A good point to remember is that while you may not get the exact figure you wanted, a solid benefit package can really sweeten the deal. Salary.com - http://www.salary.com/home/layoutscripts/sall_home.asp The Career Services Center Guide to Negotiating Salary says, “Decide, BEFORE YOU GO INTO AN INTERVIEW, what salary you WANT to earn, what you NEED to live on, and what you will be willing to SETTLE FOR.” Before interviewing, spend some time figuring out what your cost of living is. How much money is needed for bills, such as rent or mortgage, utilities, credit cards, etc? It is very important to take these factors into consideration when looking for a new job. Other aspects do, however, come into play when you determine your financial needs. They are called benefits, and they can either hurt you, or help you. “Benefits can be worth another 29 percent to 50 percent or your salary” (Martin). Depending on the company, insurance premiums, bonuses, and matching 401K plans can vary. After all is said and done, you may be making the salary you wanted, but could be paying too much out of your own pocket for insurance, or retirement plans. Know what you want, or could live with before you get to the negotiating phase of the interview. Before you negotiate your salary, be aware or your market value. As I mentioned before, Salary.com can be useful for finding salary ranges, but it can also help you find out what you are worth using the Personal Salary Report, pictured in Figure 1-2. The Personal Salary Report calculates data, such as the current market rate, your educational level, and experience, to name a few. “It tailors to your location, industry and company size” as well (Salary.com). When all of your personal components come in to play, the report gives you your estimated market value. This can save you the trouble of demanding a salary that would generally go to someone with ten years of experience, while you have two. Salary.com - https://secure.salary.com/salaryreport/graphics/PSR_header_salary.gif Once you have done your research, you know what to expect and what you want, you are ready to interview. After one or two interviews, you may be reasonably sure that you are one of the front-running candidates, especially if the topic of salary comes up. A common mistake people make, is having the wrong attitude about negotiating. “This process should be a smooth one, and success is determined by how well you break down the barriers that crop up when two people take sides. Do not approach this process with the attitude that the two parties must be antagonists. Remember, you’ll be working together if you get the job” (Jensen). This should be a win-win situation, both employer and employee should walk away feeling confident and satisfied. Obviously, this is not always as easy as it sounds, if it were, everyone would be making too much money. There are many things to consider when interviewing turns to negotiating. WetFeet.com said, “In the course of your interviews, it will become apparent how much they want you.” Who should bring up the topic of salary first is a key element in negotiating. I had the privilege of interviewing opposite sides of the negotiating-spectrum, and found the results to be rather interesting. When asked the question of who should bring up salary first, both women gave differing responses. According to Karen Zabel, human resources “generalist” at Robert W. Baird & Co., “Salary should not come up until the employer asks. Negotiating should not take place until an offer has been extended.” While every single resource I used for research on this topic completely agrees with Ms. Zabel, my second interview said otherwise. I asked Jamie Wachter, a recent hire for Abbott Laboratories, about her interviewing experiences and opinions. Jamie stated that, “It depends on how long the interviewing process is, but if the interviewer has not brought it up by the second in-person interview, I definitely do.” Illustrating what I stated earlier, people really don’t know the first thing about negotiating effectively. The best strategy to use, leaving room for negotiation, is to let the employer throw out the first offer for salary. SHOULD EVERYONE NEGOTIATE THEIR SALARY? How do you know if you are in the position to negotiate your salary? Different level jobs pay different level salaries. Also, some jobs have a lot more negotiating room than others. CareerCity.com says, “Companies will almost always, if they can, negotiate up to some degree if they feel your requirements are reasonable. Salary, however, is not your only consideration. Benefits can make a big difference in your overall cost of living.” So are salaries really negotiable? According to the Career Services Center, “Yes, and no. The degree to which a salary is negotiable depends on the position, the manager, the organization, and your perceived value. Most entry-level positions have set salaries that are subject to very little if any negotiation – perhaps a few hundred dollars. Mid-level positions typically have salary ranges. In general, the higher level management and executive positions offer the greatest opportunities for negotiation.” For the most part, employers will reason with the employee and meet on some common ground, providing you can support your request. WHAT TO SAY WHEN AN OFFER HAS BEEN MADE If you resisted the temptation to discuss salary first, and the employer asks what you were thinking in terms of salary, be vague. Try not to mention an exact number. When the employer is the first party to name a number, The Noel Smith-Wenkle Salary Negotiation Method states, “If it’s above your minimum, you accept. If it’s too low, you tell them it’s too low, but you do not say by how much.” The three steps involved in the Smith-Wenkle Method are as follows: Step 1 The first time they ask how much you’ll take, reply: I am much more interested in doing (type of work) here at (name of company) than I am in the size of the initial offer. Most people answer that question with a number. Focusing on the job, rather than the salary instantly distinguishes you from the rest, and dodges their question. Step 2 The second time they ask, reply: I will consider any reasonable offer. This stalls the question again, and you have refused to name the first figure. *Noel said that in only about 30% of the cases was it necessary to go to step 3. You are in a much better position to know how much I’m worth to you This way you have been polite, and again refused to name a number (Shipman). Another approach, if the salary range is known, is to bid from the middle, or high number and up. For example, a salary ranging from $32,000 to $37,000, you might bid $35,000 to $39,000. Or, start at $37,000 and go up from there. Never speak too soon, always give the employer the chance to up their offer. “Good managers always start low to give themselves negotiating room. They might even really want to give you more, but if you say, ‘OK,’ you tie their hands” (Chapman). SUPPORTING YOUR REQUEST FOR A HIGHER SALARY If and when you do decide to negotiate salary, be prepared to offer support to your claim. Most employers will want to know why you wish to be paid more, or receive better benefits. “Document your skills and accomplishments, and be prepared to talk about them” (The Career Services Center Guide to Negotiating Salary & Benefits). Often times in the negotiation process employers will ask why you believe you a worth a higher salary. They may want examples of experience, skills learned, or any other reasons that may affect their decision. It is best to be prepared to offer to them your list of reasons or accomplishments. Not only will you look prepared, but you will command respect through your confidence. It is not unheard of to pat your resume a bit, but this can have you walking a fine line. Employers often ask about past work experience and salary history. If you are in the position to negotiate for a higher salary, you can pretty much bet they will check your references and your past employers. Of course they may not, but it’s best to expect that they will. Employers may check your past salary history to gauge what they can offer you, or just simply to make sure that your references “check out”. I asked Karen Zabel if candidates often lie about their salary history, she said, “Yes they do. When we get different information back during an employment verification we usually confront the candidate about it and ask for an explanation. Unless they have a good explanation as to why they represented a higher past salary (i.e. maybe they added in the approximate dollar value of stock options they receive) we will no longer consider them for the position.” You are really running a risk if you choose to falsify any information on your resume or in the interviewing process. It is best to be honest and to rely more on your experience and your negotiating skills. Based on the research in this report, negotiating salary and benefits should be a process every person should be aware of. Not only can it improve your way of life, it can only add to your confidence and enhance your future endeavors. These methods, in short, are as follows: • Determine the market range for the position. • Know what to say when an offer has been made. • Don’t accept the first offer right away. • Be prepared with supports at your interview. • Be honest about your past salary history. Following these simple steps before and during an interview, can be priceless. Bibliography: WORKS CITED CareerCity.com. The Art Of Negotiation. 26 Nov. 2001 http://www.wetfeet.com/asp/article.asp?aid=93&atype=Compensation. Chapman, Jack. Negotiating Your Salary: How To Make $1000 A Minute. Berkeley, CA: Ten Speed Press, 1996. Jensen, David G. Job Offer Negotiation Strategies. Bio.com. 26 Nov. 2001 http://www.bio.com/careercenter/careercenter_guide.jhtml?action=view. Martin, Carole. Negotiate Smart: The Offer May Not Be As Good As It Seems. Monster.com. 26 Nov. 2001 http://interview.monster.com/encore/negotiating/. Salary.com. Homepage. 25 Nov. 2001 http://www.salary.com/home/layoutscripts/sall_home.asp. Salary.com. What Are You Worth?. 25 Nov. 2001 https://secure.salary.com/salaryreport/graphics/PSR_header_salary.gif. Shipman, John W. The Noel Smith-Wenkle Salary Negotiation Method. New Mexico Institute of Mining and Technology. 26 Nov. 2001 http://www.nmt.edu/~shipman/org/noel.html. The Career Services Center Guide to Negotiating Salary and Benefits. University of San Francisco. 26 Nov. 2001 http://www.usfca.edu/usf/career/salary.html. WetFeet.com. Make the Company Meet Your Compensation Needs. 20 Nov. 2001 http://www.wetfeet.com/asp/article.asp?aid=93&atype=Compensation. Wachter, Jamie. Personal Interview. 6 Nov. 2001. Zabel, Karen. Personal Interview. 8 Nov. 2001.

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