Demystifying Salary Negotiations!

Demystifying Salary Negotiations!

 When my clients get scheduled for an interview in response to a job opening one of the first concerns they have is not about how to prepare for the technical questions; how to respond to those tricky recruiter questions such as why you’re leaving, or where do you want to be in five years; or even about responding to why have you changed so many jobs in the last few years, but it is about that inevitable and dreaded salary question that gets asked early in the screening stage, mostly by the recruiter. No one is exempt: From CEOs to interns; I have seen them all!

Most want a jump in their salary when they are changing jobs. Often, this is one of the major reasons why people keep changing jobs. Getting annual raises in the 3% range gets employees looking for bigger pay packages outside their company and that alone makes this salary question pivotal when changing jobs. Even otherwise, everyone wants to get the best deal when it comes to their new salary.

So, what is the strategy for getting the best package for yourself when you are lined-up for an interview? Here is the script that I recommend to my clients:

  1. Shift Mindset: Change your mindset of pivoting your current—or last—salary to what you should be getting in your new job. Most assume that by disclosing their current salary truthfully will not get them what they deserve in their next job, so some even prevaricate during the early stages of their interview process and set themselves up for a failure; others obfuscate, or evade. Honesty and trust are important in all matters to a recruiter when it comes to screening a candidate for an opening. With this in mind reprogram your mindset to getting a compensation package based on the value you’ll create in your next job and not on what you made in your last.
  2. Build Trust: Thus, when the recruiter asks you during the initial phone screen, So, Jim, what salary are you looking for if we were to make you an offer? Instead of blurting out a number (NEVER do that!) just tell them without any hesitation: Mary, my last year’s W-2 reads xx. Just tell the actual numbers as they are printed in that official IRS (tax) document. This does two things: It has instant credibility, and second, you develop immediate trust with Mary, a very important first step in getting Mary to champion you throughout the interview process. Regardless of what you want in your new job Mary will now feel comfortable presenting you to the hiring manager if that figure falls within her threshold numbers. Once again, this has nothing to do with what you want to negotiate. If Mary insists on your answering that question, just say, Mary you already know what I make now, so you go from there. Avoid throwing out a number at any cost.
  3. Exploit Value: As you make your rounds it is unlikely that you’ll be asked the salary question again, unless you are in the terminal stages of the process and the hiring manager directly asks this question. If this comes up early in the process just respond by saying, I already told Mary my most recent compensation and I want to wait to decide on a fair number until after I fully understand what I would be doing in this job—once again, you are focused on your salary being tied to the value you plan to deliver. Remember, the fact that you are making selection rounds implies that you meet their salary thresholds. So, relax until they are ready to make you an offer.
  4. Employer First: If the interviews have gone well and the hiring manager brings this salary topic it means that you have become a contender for that opening and that they are ready to make you an offer. At this stage it is best, once again, not to throw out a number, but to ask: So, Sally, what position are you offering me (do not assume that the job you applied for is the job THEY have in mind for you. If you have done well and positioned yourself correctly you may even qualify for the next higher level)? If it is the same job, then ask what salary range their company has for that job. If Sally does not want to disclose that then say, You already know my current compensation, so why don’t you come up with a number as a starting point and let me think about it; I know you’ll not disappoint me! Always let them come up with that number first.
  5. Total Package: If you have stock options and bonuses as a part of the last year’s compensation carefully translate those numbers into actual monetized reality, so that your variable and equity compensation can be structured. Sometimes, at this stage you have the latitude to create a new mix of at-risk and fixed compensation (bonus and equity components are considered at-risk elements of a salary package).
  6. Be Cool: Do not react to any numbers they throw at you as you are concluding your interview rounds (hiring manager or the HR person). Thank them and smile! When they ask you if these numbers are workable it is best to say that they are a good starting point (make sure you use this or a similar response at this stage) and that you would like to see the entire offer in writing so that you can decide how this package stacks up. Some companies do not formalize an offer until after you agree to the numbers first. In that case tell them you would think about it, get all the elements from the HR, and then plan to call them back in a day or two.
  7. Now Negotiate: After your research on market salary points, how your discussions during the interview went, and your assessment of how you are going to create value in your new job, call the last person with whom you had this discussion and tell them that after careful consideration you have decided that the numbers needs to be revisited. Then ask, Is this something we can discuss now? Most companies have room in the first-round numbers.
  8. Titrate Numbers: Take the most important item from the package and tell them that your first preference is to see that number moved up (either give a percentage or give a range). If that is only partially possible then move on to the next component (bonus or equity) and then discuss these at-risk components so that they make up for what you did not get in the first round. Focus on only one element and nail it down before moving on to the next one. Limit these to two or three components and quickly converge on a final package. Do not haggle. If you feel you are still shy of your goal, then ask if they can now sweeten the deal with a sign-on bonus. Once you get to this point ask if what they have agreed to is their best and final offer. This is an important question to ask, especially if you are still coming up short from what you had in mind.
  9. Now Close: Once you see the tone of the exchange at this point quickly decide if you have reached the limit of their patience and stop. Decide if you can live with the package and then agree to accept it. Say, can you now put this in a formal offer, so that I can sign it and send it back with a start date?
  10.  And, Finally: If none of these approaches work after they give you the salary package and they come back with a “Take it or leave it” response, you can decide if you want to accept what they presented. If you do accept then there is still a chance for you to present to your boss right after you start your new job a studied 100-Day roadmap as a part of your first year plan and tie its success to your review and salary at the end of the first year. I have done this successfully with my clients, even when they got what they negotiated at the outset.

An appropriate salary package is never what you deserve; it is what you negotiate!

Good luck!

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