negotiation – Word of Mouth

How to Negotiate So That You Don’t Regret What You Accept

This information is primarily for candidates who are about to negotiate a compensation package with a new employer. However, someone who is interested in earning more with a current employer may find it helpful too.

What you’re currently earning always influences what an offer will look like. So, if you’re presently underpaid, it’s unlikely that you will see a dramatic increase that will put you in a different stratosphere. It happens about .005 % of the time. Note: this doesn’t need to be true if you live in a place where asking compensation history is illegal.
There are always two numbers: the number you want and the number you’ll take. Always ask for the number you want. Hopefully, what will be offered will be higher than the number you’ll take, even if it isn’t the number you want.
When you’re paid properly, you will spend more time working at the firm for a longer period. That benefits the firm. You won’t be distracted looking to leave because you’re dissatisfied with your compensation. So don’t accept a disappointing package.
If you need to tell a hiring manager and/or a recruiter that accepting less than X will mean you won’t be satisfied, do it.
Do not put your energy into explaining your compensation requirements. Be matter of fact.
Practice discussing this matter with an imaginary person. It’s valuable to be able to say, in a relaxed manner, “I want a package of X with a base of Y. I have deferred comp of Z.” Then be quiet. And pay attention to your body language. No arms crossed in front of your chest or above your head. No foot tapping or leg shaking.
When you talk money, don’t talk too much. Otherwise, it seems like you’re nervous. This is a game of sorts. Like poker. Be concise. Be relaxed.
Expect to negotiate. It’s part of the process. Don’t cave in. You will feel better if you get what you want. Or if you make every effort to get what you want.
No one wins in the long term if you accept less than what you want.
It’s ok to walk away. Sometimes, they come back and you really get what you want. And if you don’t get what you want, why go?
If it helps to imagine you’re negotiating on behalf of someone else, do that. If you have a family, remember you’re probably looking for more money to support them.
You can always practice the conversation lots in advance.
Avoid taking the first offer unless it’s exactly the number you requested. Or more than you requested.
If someone really wants you, they have the money. And if you are firm, then that makes you more desirable to a potential employer because who wants to hire someone who doesn’t hold their ground.
Be polite.
Don’t rush to accept an offer. Say things like, “Let me get back to you tomorrow.” Or, “I need to discuss this with my spouse.”
Ignore all studies that talk about compensation, especially the ones with lots of data. Most are full of lies or out of date and have little to no value.
If you’re contacted by recruiters about roles, ask them to email the spec and include in the email the expected compensation range and ceiling. This should be kept in a file. Of course what’s ultimately paid may not resemble what the recruiter indicates is expected, but, still, it’s worthwhile to collect the information.
If you work for a firm and want to see your compensation increase there are several things you need to do. Some include the following: a) make certain that what is asked of you is done properly, b) go above and beyond to demonstrate that your contribution to the firm is valuable, c) in a review with your boss, whether it’s annual or biannual, make sure that you’re clear on what you need to do better, d) ask for an increase in compensation long before numbers are determined, e) be prepared to explain why you think you earned that increase (if you need to give a list of projects, situations, matters that you were responsible for, that’s fine), f) avoid ultimatums, g) avoid being dramatic/emotional when discussing compensation.

The Impact of the Law Banning Salary History Discussion

On October 31, 2017, NYC banned employers from asking candidates their compensation history. Their goal was to address a discriminatory practice.

Recently, I spoke with an industry source who had heard that employers were telling candidates, “Here’s your offer, take it or leave.” He shared that his understanding was the discussion around compensation had been truncated.

When I shared with this source a few anecdotes I had heard, he was surprised.

I’m now aware of four offers made that wouldn’t ever have been presented before the law. Two were for offers that included a 50% increase in base salary while two others were 50% higher in total compensation.

My guess is that neither the hiring managers, nor the recruiter, nor Human Resources had a sense of what the candidates were earning. Otherwise, I think it’s unlikely they would have made offers with such radical increases. What you may find especially unexpected is that not all of these offers were accepted. And three were made to male candidates. This is noteworthy as the law was specifically geared to assisting women and minorities.

In one case, where the offer was declined, the candidate accepted a counter that didn’t match the significant offer. Compensation, he explained to his boss, was the only reason he was interviewing. And when the candidate said that to his boss, she didn’t know his base salary and was surprised to learn it was so low. Yes, the boss didn’t know her subordinate’s base salary.

What are hiring managers to do? Certainly they don’t want to break the law and ask what a candidate is earning. Nor do they want to offer a 50% increase in salary or total compensation. One approach some will surely take is to do due diligence. Find out what is known historically about how people are paid. For example, at certain firms, titles determine what compensation range someone might be eligible for.

But far more important, evaluate the compensation of your existing team and determine what you’re comfortable paying for the role. This approach can mean that you may not consider some talented candidates. Yet, it could help to keep the compensation packages of the entire team in the same range.

Sometimes, when interviewing, hiring managers quickly learn that their existing team is paid below market. This may prompt them to adjust the compensation of current employees. Others prefer to just keep searching for a candidate who, similarly, is paid below market.

Compensation is not the only reason anyone should move. But it’s almost always one of the reasons. Hiring managers who offer reasonable compensation packages and make an effort to meet the requests of a candidate, while still be respectful of what existing team members earn, will likely be successful when it comes to recruiting.

Above all, if a candidate feels good about their compensation, the firm that hires them will likely benefit. First, the new hire is more inclined to stay longer. Second, they’re less likely to waste lots of time trying to determine if they’re reasonably paid. Third, if they feel good about their compensation, they’ll probably want to make a better contribution and do a better job. That’s certainly good for the hiring manager.

How Candidates Should Navigate the Law Banning a Discussion of Compensation History

Just as hiring firms are adjusting to how to navigate discussing compensation with candidates when, by law, they need to avoid asking compensation history, candidates are fumbling with what to, and not to, say.

Many candidates find themselves telling recruiters, HR and hiring managers what they’re presently earning. Or what they’ve been earning. This isn’t the best approach for a candidate. Not at all.

Instead, candidates should determine what is the compensation they want vs. the compensation they’d take. And those should be two different numbers. For example, if someone’s presently earning $200,000 total and they’d like $275,000, that can be the number they want, while $230,000 might be the number they’d take.

Once a candidate has established those numbers, they should practice saying, “I’m looking for a total package of $275,000 with a base of $200,000.” And practice is best done in multiple settings. While driving the car, hitting a tennis ball, taking a walk, shaving, emptying the dishwasher, etc. There should be enough practice so that the candidate is relaxed and prepared. Otherwise, they may find themselves with their arms across their chest, looking down at their shoes and whispering. Not a good approach. So practice. Practice so much that responding to the question is not something you dread.

Typically, what’s offered isn’t what’s requested. But how one states their sought compensation can impact what’s offered.