A reader wants to negotiate salary without being greedy, in the December 8, 2020 Ask The Headhunter Newsletter.
Question
Employers never make their best offer. You have to negotiate for a few rounds. I’ve read books and articles that give you tactics to improve an offer. I definitely want to get the most money I can, but I don’t want to press so hard that I talk them out of an offer altogether or come off like a jerk. What do you advise?
Nick’s Reply
Negotiate salary to get all you can, of course. But don’t be greedy.
Too often, people get battered by stingy employers in salary negotiations. This creates a climate in which job candidates feel there’s no choice but to turn up the heat to get every buck they can. I expect we’ll hear some ire about my advice: When you negotiate compensation, leave something on the table. Be assertive, but don’t be greedy.
I’d like to caution you that some employers do make their best offer off the bat. If you have reason to believe otherwise, go for it. But only a naïve job seeker automatically asks for more. Take stock of the specific employer. Use your judgment.
So, what am I talking about?
Leave something on the table
In America we are taught to eat heartily but not to take the last portion from the serving plate, out of respect for the generosity of our host. This is a good lesson in salary negotiations, too. Get all you need, but leave something on the table as a show of respect to your new employer.
Does this mean you should decline more money? Of course not. But remember that a job offer can have several components. Smart job hunters know how to negotiate for more than salary.
Negotiate more than salary
For example, a cornucopia of compensation components may be on the table: salary, bonus, performance incentives, relocation costs, vacation, company stock, job title, first review, tools to be used on the job, and so on. The more components you negotiate, the more you might be able to win — and the more opportunity you have to make some concessions as a show of respect and reciprocation.
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For example, a candidate may not be able to accept less than a certain base salary because of fixed family expenses. A company may not be able to pay a higher salary due to budgetary constraints. As a solution to these issues, the candidate might forgo a higher salary if the company agrees to a guaranteed bonus to be paid every six months for two years until the new employee has a chance to get promoted and earn raises. (Part of the secret behind this is that bonuses are not fixed costs on the employer’s ledger, like salaries are.) The only way to get creative is to talk it through together.
Respect
Respect is paramount in a successful negotiation. (If you feel an employer is not negotiating in good faith, then nothing you consent to is going to make this a good place to work! Walk away.) That’s why such discussions are handled better on the phone than in e-mail, and better in person than on the phone. That is, make it as personal as circumstances permit — but face to face is best.
If both parties are to understand one another, a job interview requires a personal, nuanced exchange. So does negotiating the terms of employment. This promotes personal responsibility and a higher regard for one another’s needs. And that’s where concessions are important.
Negotiate a relationship
When you’re dealing with a good employer that demonstrates a high regard for you and your needs, don’t automatically apply tactics to get every dollar you think you can. Consider the long-term value of demonstrating your ability to let the other guy win, too. The end of your negotiations marks the beginning of a business relationship. What do you want that to look and feel like to you and to your new employer?
Take what you need, but leave something on the table as a sign of respect for the other party’s willingness to negotiate with you. If the employer is worth working for, this can pay off after you start your job, because you will be regarded as a worker who is concerned not only for their own well-being, but also for the employer’s.
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Is it worth a few bucks to signal your belief in a win-win deal? Did you ever fight for every last dollar in a salary negotiation only to regret it? What happened? On the other hand, did you win big and still make everybody happy? Tell us about it!
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Hi Nick,
I believe there are stories of a very successful sports agent who was noted for almost always leaving something on the table even though he could have gone for more.
Maybe someone can shed more light on that story.
Respect is key. You may be working with/for these people every day.
Large bureaucracies like the Federal Government are especially likely to be unable to negotiate salary.
Federal and state bureaucracies are ruled by the numbering system. If your job is deemed a #3 or #8, etc. there is a corresponding paygrade. There are some adjustments made if Congress or the department you work for have this written into their manuels. There are also cost of living raises made periodically.
So nothing can be negotiated in a government job?
In this area, I highly, highly recommend “Never Split The Difference: Negotiating As If Your Life Depended On It,” by Chris Voss.
The last part of Nick’s post is the most pertinent: You are negotiating a relationship. You should know before you enter the negotiations what you want your employment relationship to be like – not only the monetary compensation, but also the work you will be doing, how you will be evaluated and how you will progress. Then you and your new employer need to work out how you and they will provide the mutual benefits, or show you how they will provide it later (and get it in writing), otherwise, you will lose interest in working for them and be looking again soon.
One of Voss’ truisms is: “No deal is better than a bad deal.” If you feel like you need to hardball an employer as the only way to get a good job offer, what do you think will happen through the rest of your employment?
@Michael: I don’t know Voss’s book – I’ll look for it, thanks. I think the biggest mistake people make when negotiating a job offer is that they don’t know what they want. Not just in money, but in all the other components of the job that you list (and more).
You can’t negotiate with someone if you don’t know and really understand what they want. That’s a tall order, and few go to the trouble to get the information.
Most people view a job offer negotiation as “I’ll try to get as much money as I can.” Then they ask for it without explaining exactly how that will pay off to the employer.
And Voss is right: No deal is better than a bad deal. Know when, and how, to walk away, and know it before you start negotiating. Thanks for sharing this!
Any negotiation is an emotional experience. If you can’t or don’t control your emotions, you lose any/all control of the negotiation. Lack of preparation is the downfall in any negotiation. Just because you, the employee, “feel” you deserve a raise doesn’t make it so. Here are some guidelines to follow:
#1. Definition of negotiation: Reach an agreement by discussion. AKA haggle, get past, debate. Ponder this definition and make sure, based on your work history and possibly previous attempts at negotiation you fully understand the term.
#2. Quite a number of negotiations are a process, not a single event. The history of your employer in negotiations will give you insight how they approach such an issue. If your situation is process oriented, obviously don’t go to whomever is in charge of negotiations expecting a deal in less than an hour.
#3. Get an update on the status of your company. If the company is downsizing, up for sale, object of a merger/acquisition, or giving indication of changes due to financial or currently COVID related then don’t attempt to negotiate salary raises. Also if the company’s negotiator or your supervisor is about to go out the door, wait until the replacement is onboard a sufficient time before approaching for a raise.
#4. Evaluate your current worth to the company. Quite often this requires having a neutral person to analyze your skills, job performance, and status within the company to assist in your negotiation. In many cases, the employee thinks they’re more valuable or doing a better job than how the company views you. If you are considered among the lesser valued employees and your job duties are easily replaceable, the chances of obtaining a meaningful raise aren’t there. You may even find yourself terminated.
#5. Realize all negotiations are selling formats. You have to “sell” your employer you’re worthy of the pay raise or whatever else you may want from the company. If you can’t sell yourself, you won’t get the pay raise or whatever else, especially a promotion. Being tentative will be your ruination.
#6. Prepare for the unexpected. Say you want more money but your employer counters with a new job description that includes the pay raise. You must evaluate if it’s worth it or not.
#7. Make sure you did not sign any agreements that preclude asking for a raise. If you signed such an agreement, you won’t get the raise and may even get the proverbial pink slip.
#8. Don’t be swayed by things that are meaningless. This goes to #6. An extra vacation, company car, corner office, etc. are ploys to give the appearance of an extra bonus for you to accept lower money. Many of the “perks” come with a promotion so make sure if perks are offered, there’s a promotion that goes along with it.
#9. Be specific. If it’s money you want research the payscale of similar positions within your company and competitors to your employer. Use this as a base for your negotiation. Be aware, your skills will factor heavily into your pay raise negotiation. If you have upgraded your skillset, you should make this known and stress it/they are “assets” for the company.
#10. Should you approach your immediate supervisor, you may find that person cannot enter into negotiations. If this is the case, research who you will be dealing with and prepare accordingly. Don’t blindly ask to see this person immediately. Set an appointment a few days in the future to give you sufficient time to research. Chances are this will happen anyway because the company negotiator will want that same time to research you. Again this goes to control.
Indicators are that beginning January 2021, many companies will be making significant changes within their respective company. Some changes will be minor and some more long term based on COVID’s impact. Working from home is one of the more obvious changes that will occur. Downsizing and consolidation are also in the works for many companies. Restrictions resulting from COVID mandates are and will have a big impact on companies big, medium, and small. Companies are in the process of evaluating what either will be mandated come the first of the year or what they must due because of lost revenue due to COVID. The bottomline is that with a few exceptions, all players in the marketplace will be making adjustments due to the impact of COVID. Be smart, research and then do more research before you potentially make a big mistake. The price you pay, may be your livelihood.
Right on. Negotiating requires one thing above all else: information about the other guy and their business and what makes them tick. If you can get that, then you don’t have to worry about the second most important thing: your emotions. When you have the necessary info, you’ll have nothing to be emotional about.
You can get the info you need if you go to the trouble to talk to people connected to the company. This is why I advise against applying for jobs via postings. The people who can get you in the door will also inform you so you can negotiate effectively. That’s why personal contacts and referrals are so important.
Yes it’s wise to leave something on the table. For both parties. Translate leaving something on the table to
= “wiggle room”.
You have to keep in mind that you are mutual strangers. But one of you is moving into unknown territory “the company and it’s culture and administrative system. It may be a jungle, but it’s the hiring manager’s jungle. And you will be counting on the hiring manager to be your guide. Hold that thought.
Let me give you an example of what I mean. Big corporations. That have developed well defined and RIGIDLY enforced salary structures..for each profession, they employ inclusive of the executive levels. The salary structure aligns to experience levels within each. e.g. Entry level Programmer, Intermediate Level Programmer, Sr Programmer.
Each level will have the pay range laid out
e.g. minimum, midpoint and maximum pay for each level. Usually they overlap laying a path for promotion.
And most important to know, is if your pay maxes out for your pay level. You’re what’s known as “red lined”. As a manager, if I can’t justify a promo, policy is 0% raise at raise time if someone has redlined. If the max pay for a senior programmer is 100K, A manager can’t even propose 101K Out of policy sorry. And won’t try.
Giving a raise to someone redlined is a character building exercise for a manager, draws unwanted attention to both you and me, and experience says won’t happen anyway
This is a real example and have had this come up at least once when I was the applicant and several times as a manager.
I’m the hiring manager. Along comes Joe. Looks great on paper, I get good vibes about potential, perhaps even a personal referral I respect. Joe wants a salary that hits the max for the role. Meaning, when raise time comes round usually a year later, I can’t give him a raise. Unless I take on the corporation for him, wrestle it to the ground to make an exception to policy. As noted…for a total stranger.
Now I could not tell Joe this, and hire him and create a built in problem for him & me. I could take a gamble and hire him at the next level…but I have people working at the next level that expect me to manage equity/fairness. Which may be moot anyway because I may not have an opening at the level nor means right now, to justify one. again for a total stranger of unproven worth.
What I did, is lay all of this out to Joe, including showing him the pay structure, explaining why that’s not a good idea. Explaining that I need some wiggle room to “work the system” if he earns it. And then Joe can make an informed decision.
What is now most important is job content, which should be most important anyway if an applicants financial needs (not nice) are met. Because if he comes aboard WE will be team playing to simply get him promoted. Don’t ask me to try and change a non corporate policy overnight. To do so is not only money greed, it’s ego greed. What he can negotiate is something completely under my control. The job content which is the grist for the promotion mill. The means he’ll have to show how well he can do the job at the next level.
The wiggle room he’s giving us, is that he won’t be a stranger. I’ll be proposing a change for an existing team member, who has demonstrated his abilities and contributions. Someone I can create a place for if need be.
And even in the most strictest of companies I’ve worked in there was never any dictate on time in grade governing promos. If I have a good case, I could take a shot at it any time. I just need a case. And he needs to be on board to help me make it.
In my experience, most people who I’ve explained this to, are OK with it and it’s worked out fine.
But as Nick said, negotiations are trust builders. If someone digs in on the $ after I’ve explained reality, we’re done. Because they’ve just told me they’ll be a HMU (high maintenance unit), lacking any sense of what negotiating is all about.
What needs to be added to your explanation is age. Many of today’s younger job seekers, especially those fresh out of college, have their own value system and perception of what they’re worth. Most of the time it’s egocentric and not based on everyday skills and experience. They have a sense of entitlement that because they got a degree, achieved honors, went to a named university, this equates to inflated salary demands and no consideration for the entry level position companies impose on most hires. Attempts to explain the pay structure often is resisted by these younger individuals and they create an environment of hostility. Usually they decline the job offer and go elsewhere or if they accept what they deem an inferior wage, they begin looking for another position with another company within 6 months after being hired.
As a person who started out entry level at a company and stayed a LONG time – even past when my managers were telling me that even though they loved me I was worth way more than the company would let them pay me and I should leave (and then they would hire me back a year later at better pay – I never did that second thing though). I stayed because I hadn’t quite figured out what I was good at (‘pretty good at everything’ is a little hard to pin down) and I was given decision making power and autonomy well above my paygrade because I was trusted to handle business. That was worth way more than cash, for me, and it led me onto a career path that I love.
A couple companies ago now we hired a LOT of people that were fresh out of college, maybe with a year of admin work or something like that on their resumes. We didn’t pay particularly well – but people took the job because of the perception of company culture, the non-monetary perks related to that (close to the beach, fun people you’d be spending a lot of time with, fully paid medical, 3 weeks of vacation, internal promotion opportunities) and people stayed for several years even though better paying work was out there. Like Nick says – there’s more to it than just the number on their paycheck. If you can’t offer cash you can offer other things. but if you can’t offer anything but below-market comp and average benefits I wouldn’t be surprised to hear that people are going elsewhere, but its not because they’re the ones with misguided expectations.
@Tomas: I’ve heard that criticism of “younger job seekers” again and again. I think it’s a pat and irresponsible over-generalization that serves as an excuse for older people to avoid truly engaging and working with a new generation. It’s as bad a disservice to young workers out there as the silly biases are against older workers.
If someone wants to help younger workers, talk to them, mentor them, mix it up with them — and remember you’re supposed to be the savvy “adult” whose role should be to mentor them. You will take a few knocks, but you might learn something, too — it’s your job. Mine, too. Everybody’s.
It’s a head-turner when age discrimination is directed at the young.
Noble sentiments, but I stand somewhat with Thomas Schafer’s commentary here. I’m personally all about mentoring (a lost art, and one I’ve seldom experienced in my day) younger workers, but when said younger workers flat out refuse mentoring (as in my current day job, and in my past job experiences), then it becomes “you can lead a horse to water, but you can’t make it drink”, or “you can tell some people some things, and you can’t tell them anything“.
Sorry Thomas but that is the opposite of what I’ve experienced. Millennials and Gen Xers are generally getting shafted by employers, instead of being mentored they are being abused and exploited then blamed for being “entitled”.
In my age group (30’s) and younger, typically companies offer unpaid internship and claim that the intern will gain “exposure”, but rarely actually offer a full time role, just hire more free interns.
For simple entry-level positions there is rampant credentialism, companies ask for a bachelor’s degree as a bare minimum, 5 rounds of one-way video interviews, 3-5 years experience (sometimes for a coding language that has only been around 1-2 years) and various extracurriculars such as being head of Student Council, volunteering at the right venues and being diverse (in race, sex and sexual orientation) to even be considered for a role.
They are deep in student debt, they don’t have job security, a 20-30 year career option with a gold watch and retirement house in Florida but a “gig economy” of 1-2 years at different companies and sometimes completely different fields just to survive.
They are also not able to maintain a household on a single income, let alone buy a house or invest.
To top it all off, they are regularly ghosted by companies after bending over backwards to even get a human to interview them, as evidenced by Nick’s blog.
I wouldn’t be so quick to criticize them.
@G.D. I contend that some of the onus has to be placed on individuals for-
1.Attending a university in the first place(free will choice). Granted, GenXers and millennials have been sold a bill of goods, IMHO.
2.Racking up large student loan debt for often nebulous majors (excluding STEM majors) with little to no employment possibilities other than a chance at a scam freebie internships you aptly point out. What you’re pointing out, appears to be corporate white collar type jobs.
That said, I deal daily with industrial accounts who are crying for skilled welders, machinists, metal fabricators, multi-craft maintenance mechanics, truck drivers, heavy, equipment mechanics, plumbers, HVAC technicians, electricians, millwrights, etc. You see lots of gray heads on their shop floors, but you see few to no millennials/GenZers. Many of the said companies have tried to recruit younger workers, offer competitive wages and benefits for our area, OJT, and will even pay for related training at local trade schools, but they find few to no takers.
I also work a night job teaching as an adjunct in a 9 month welding program at a local community college. My GenZ students (and some of the millennials) seem to get it. Short, sweet, cheap (little to no debt), and being employable for an entry-level job in 9 months. They don’t want student loan debt, or to sit in lecture halls at universities for 4+ years, then face what you’ve described. They want to get out quickly in a marketable field and start earning.
I once wrote an article about the need for welders for a now defunct site that catered to millennial men. The article triggered the young millennial men readers. They wanted “doctors wages” (then go to medical school), trades and blue collar work was for “dummies”, and I didn’t know what I was talking about.
My point here is why are many GenXers and millennials chasing after these corporate scams, but refusing to get skills in marketable blue collar work?
I’ve had a career that requires a 4-year degree – microbiologist, and one that requires a 2-year degree – biomedical engineering technologist. The second one has paid me more and been more interesting than the first.
@ Michael-so much for the “you need a 4 year degree”. 9-18 month skills training programs at trades schools or CCs, or the best, OJT, the only way to go! Your tale resonates with multitudes of others.
My biggest thing lately is encouraging people to “read the room”. We’re cutting hours, going through layoffs, trying to survive this stupid pandemic along with a management change and uncertainty for our customers as well. Now is probably not the best time to ask for a raise. Or complain about the raise you DID get. *grumble grumble*
@MJ: Yep! And it helps to know whether the manager can be trusted to do the right thing for you when the problems get worked out.
My first content licensing client helped me get my start. We both knew when it was time to pay me more. I asked for more very directly. And just as directly, he told me there was no money. “But keep delivering good stuff. I’ll get you the money when it’s available.”
I had to make a judgment. I decided I trusted him because he’d never lied to me or misled me. And I told him that when I agreed to wait. I wanted him to hear me say it. That’s important. Let the other guy hear clearly that “I’m counting on you.”
Around 9 months later, the money was available and he made good. Within 3 years I was earning 15X what I had started at. We worked together again and again at other companies — he the client, me the content provider. I was always happy when he asked me to do some work “on the come” until he could prove a new product to HIS bosses. When he succeeded, I got a new contract and I succeeded, too, and the money came. Clients (and employers) like that are gold. And lots of fun. 20+ years later, we’re still good friends. And I’d go to any length to help him pull off something new and grand, “on the come.”
Reading the room and reading other people is always dicey, but you must always make a judgment. Also helps to know when to cut yourself loose and move on.