Salary Negotiations
These 10 basic commandments will help you negotiate the best possible deal when changing jobs either internally or to a new company.
1. Be prepared
The more information you have about your market value and the prospective employer, the greater your likelihood
of success. This is the first commandment because it's the most important. There's a wealth of information
available on the Internet and from you recruiter. Time spent preparing for negotiations may be the best investment you'll ever make.
2. Recognise that employment negotiations are different
When the negotiations are over, you'll have to work with the person with whom you're negotiating. Moreover,
your future success may depend on that person. So, while you want to negotiate the best possible deal, you
need to do so in a way that doesn't damage that relationship. Make sure your expectations are realistic,
employers today will not in most cases entertain increases outside of 5% to 15%. The average range for
increase is 5% to 10%. Remember that the higher the salary, the higher the expectation of your performance.
3. Understand your needs and those of the employer
To be successful in this type of negotiation, you need to examine your priorities. What do you really want?
Are you comfortable with a low salary and a large benefits package? Understanding your needs will also help
you determine the type of company you want to work for. For example, a small to medium sized enterprise may
be able to offer a competitive salary and a large bonus based on results, but may not be willing to offer
shares. By recognising what an employer can and can't do, you'll be able to determine what issues you should press.
4. Understand the dynamics of the particular negotiations
Sometimes you'll have skills that are in great demand. And sometimes, you may be one of several qualified
candidates the company would be happy to hire. Sizing up the situation and understanding the relative position
of each party will help you determine when to press your advantage and when to back off.
5. Never lie, but use the truth to your advantage
It's not only wrong to lie, but in employment negotiations, it's ineffective. Remember your tax documents will
detail to a new employer exactly what you were earning. If you lie during negotiations, sooner or later you're
likely to be caught. Once you are, even if you don't lose the offer, you'll be at a tremendous disadvantage,
and your credibility will always be in doubt. You can determine what you want to say and how you want to say
it, and try to put everything in its most positive light. One key element of your preparation should be to
recognise areas of concern so you can rehearse how to handle them when they arise.
6. Understand the role fairness plays in the process
The guiding principle for most employers when negotiating is fairness. Within the constraints of their budget
and organisational structure, employers usually will agree to anything that's fair and reasonable to hire
someone they want. Appeals to fairness are your most powerful weapon. Thus, you should be able to justify
every request you make in terms of fairness. Your prospective employer will want you to accept its offer and
feel that you've been treated fairly. Understanding the importance of fairness as a negotiating principle can
make the difference between success and failure.
7. Be creative
Consider the value of the total package. Look for different ways to achieve your objectives. Be willing to make
tradeoffs to increase the total value of the deal. If you're creative, you can package what you want in ways
that will be acceptable to the company. You'll also be able to find creative "trades" that allow you to withdraw
requests that might be problematic to the company in return for improvements in areas where the company has more
flexibility. That way, you can maximize the value of the package you negotiate.
8. Focus on your goals, not on winning
Negotiation is about exchange. Good negotiations are about a win win result. Good negotiators are as sensitive to
the other parties issues as they are to their own. Too often in negotiations, the act of winning becomes more
important than achieving your goals. And it's also important not to make your future manager feel as if they have
lost in the negotiations. You'll have gained little by negotiating a good deal if you alienate your future manager in the process.
9. Know when to quit bargaining
The one sure way to lose everything you've obtained is to be greedy. There comes a point in every negotiation when
you've achieved everything you could have reasonably expected to gain. While most companies will want to treat you
fairly and make you happy, few companies want to hire a prima donna. Being perceived as greedy or unreasonable may
cause the deal to fall apart. Even if it doesn't, you'll have done immeasurable harm to your career.
10. Never forget that employment is an ongoing relationship
Job negotiations are the starting point for your career with a company. Get too little and you're disadvantaged
throughout your career there; push too hard and you can sour the relationship before it begins.
Understanding these principles will allow you to effectively negotiate the terms of your new job. Then do your job
well and continually seek out new challenges. As you take on added responsibilities and learn new skills, there will
be opportunities to negotiate further improvements to your salary.
