Negotiating Compensation

The Insider's Guide To Job Search

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Negotiating Compensation

by Kevin T. Buckley, CPC


Negotiating Compensation

You want to ensure that your work and contributions are recognized and valued by those who can affect your career progress. How do you approach discussions about compensation with potential and present employers?

Here are some general guidelines you can follow:

1.      Determine the market rate salary range for this type of position in the industry.

2.      Prepare a budget to determine your financial needs.

3.      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.

4.      Be realistic: entry- level salaries are less negotiable than salaries for mid-level or executive positions.

5.      Practice your salary negotiation skills with a friend.

6.      Document your skills and accomplishments, and be prepared to talk about them.

7.      Don't be the first to mention salary during the interview, and use the negotiating tips listed below when the topic does come up.

8.      Never say "I need at least ___ dollars."

9.      Don't worry about what your friends are making, the employer will not take this into account.

10. Never lie about your salary history.

11. Always end discussions on a positive note.

12. Once you have accepted a job offer and salary level, be sure to get it in writing.

How can I find out the market rate salary range?
Uncovering salary information is not as difficult as it may seem. Try the following resources:

1.      Review salary survey information sites on the net:

2.      Use job listings which indicate salaries for related positions

3.      Ask your friends and networking contacts

4.      Call employment agencies or executive search firms

5.      Contact professional associations to see if they conduct surveys.

6.      Talk to other job seekers

7.      Review business and trade periodicals.

Are salaries really negotiable?

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 of negotiating room. Mid-level positions typically have salary ranges of between 10 and 20 percent (i.e., a job paying $30,000 a year may have a salary range between $27,000 and $33,000).

Employers will negotiate within the range, but will rarely exceed it unless you are an exceptional candidate.  In general, the higher- level management and executive positions offer the greatest opportunities for negotiation.


How can I handle questions about salary during an interview?

Most books about how to find a job contain entire chapters on negotiating salaries. Here are just a few tips to get you started:

1.      If asked: "What are your salary requirements?" Summarize the requirements of the position as you understand them, and then ask the interviewer for the normal salary range in his/her company for that type of position.

2.      If asked: "How much did you earn on your last job?" Tell the interviewer and add that you would prefer learning more about the current position before you discuss compensation, and that you are confident you will be able to reach a mutual agreement about salary at that time.

3.      If told: "The salary range for this position is $42,000 to $47,000, is that what you were expecting?" Tell the interviewer that it does come near what you were expecting, and then offer a range which places the top of the employer's range into the bottom of your range (i.e., I was thinking in terms of $47,000 to $52,000). Remember: be sure that the range you were thinking about is consistent with what you learned about the industry rate for that position.

4.      If told; "The salary is $1900 per month." Try not to look excited or disappointed. Simply repeat the salary, look up as though you were thinking about it, and pause. Don't worry about the silence; give the employer an opportunity to increase the offer. If the interviewer does not change the offer, try the response suggested in #3 above.

Introduction to Benefits

In addition to salary, take into consideration the employee benefit plan when evaluating an offer made by a company. In today's job market many employee benefits are considered standard--they come with the job and are not subject to negotiation. However, an increasing number of employers are offering flexible benefit packages, which allow employees a variety of choices regarding their benefits. Most entry- level employees can expect a basic benefit package consisting of:

·         Health insurance Dental insurance/ Disability insurance

·         Life insurance Paid vacation time Paid sick leave

·         Paid holidays

A more comprehensive benefit package might include some or all of the following:

·         Bonuses Child and day-care services

·         Cost-of-living adjustments

·         Industry Education and training programs

·         Expense accounts Flexible work schedule

·         Maternity/Parental leave

·         Professional membership dues 

·         Relocation expenses

·         Savings plans - RRSPs

·         Stock Options purchase plans

·         Termination agreement (severance pay)

·         Unpaid leave time

Ask questions to learn as much as possible about the compensation policies of the organization:

What is your company's pay plan?

What is the maximum raise given?

How is your performance evaluated?

What are the opportunities for advancement?

What do you have to do to qualify for those opportunities?

When are raises given?

Let your actions show that you deserve the raise you want. Find out what standards your boss uses for measuring performance. Concentrate on the achievements he/she values. Only accomplishments your boss appreciates will motivate a raise. Concentrate your efforts in the areas (projects, skills, abilities, work habits) that your manager particularly values.

Keep a log of your progress. Note special accomplishments and particular victories. 

Ask for a raise. Sometimes people don't want to put the boss on the spot, or run the risk of being turned down. But if you don't ask, everybody thinks you're satisfied. Research shows that women ask for raises less frequently than men.

If you've never asked for a raise and aren't sure you have the self-confidence to just do it, a simple way to approach the matter of money is to say, "I'm interested in asking for a raise. How would you do that if you were me?" More often than not this both breaks the ice and leads toward a friendly conversation about your compensation.

Prepare for your meeting with your boss through practicing with a spouse, friend or business colleague. You increase your chances for success by practicing your presentation.

Don't say you need a raise. Give reasons why you deserve a raise. If you have salary survey information that indicates other employers pay more for similar work, you might consider mentioning that to your manager. Point out the significance of your work. "What I am paid tells everyone, including me, what I am worth." Name a specific amount that is the highest figure you can justify. You can always negotiate downward, but don't jump at the first offer you get -- you can usually negotiate that upward.

If you aren't given the raise you want right now, try to find out if or when you might expect it. Ask what you need to do to earn more. If your manager appears to agree that you deserve higher pay, but he/she can't grant you a raise right now, ask for further training, a membership in a professional association, or some other benefit.

Whatever happens, keep your attitude and conduct businesslike. Win, lose, or draw, smile, shake hands and express your appreciation when the discussion is over.

Discussing career and salary with your manager is very important. You will clarify what each of you expects of the other.  You may have to be patient. Most organizations operate within established policies regarding when salaries can be raised and by how much. Managers are not always free to dispense raises when their staff members deserve them, and even the biggest raises may be capped at five percent.

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