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:
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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