Most candidates would rather stick their heads in a vise than negotiate compensation. Salary negotiations are not generally pleasant for either the job candidate or employer. Every single situation is different – please keep reading below for how I assess each one:
Do you want the job and have they offered it to you?
Way back in the late 1990s, in the last semester of my senior year in college, I received my first job offer. I trusted my audit professor, Dr. Bob, and asked him what I should do. He asked me a profound question, “Do you have another offer?” I replied that I did not. He politely smirked and said, “Well, you don’t have much of a decision to make then do you?” I’m older and wiser now, but I still laugh that I was losing sleep agonizing over whether to go work for the only accounting firm that wanted to hire me.
Factors to assess:
- Supply and demand. Are you in a candidate or an employer’s market? Today, there are very few candidates out there, let alone enough of the great ones that companies desire. Employers will have to pay more today than they would like, simply due to supply and demand.
- Market. Do your homework. Assuming you’ve been offered the role, do you know what similarly experienced candidates are paid in your area for the role you’ve been offered? A range is a fine starting point, and a credible recruiter will inform employers and candidates if the numbers are off base.
- Is there competition? Sometimes there is a clear best candidate in a search, and sometimes an employer is genuinely struggling to differentiate between multiple outstanding candidates. As a candidate, see if you can build rapport with the hiring manager or recruiter. Sometimes it’s obvious, for example, when an employer says, “We have three more candidates to interview and will get back to you.” Another aspect you likely won’t know as a candidate is, how far apart are the other candidates’ ability, fit, and compensation demands? A significant gap in differentiation provides leverage, so try to get the employer or recruiter to tip his or her hand.
- Where do you stand? Gather and establish as many facts as you can. Do they like you? How bad do you want this role? Will the employer even negotiate with you? Employers big and small have thresholds they cannot cross. For example, a small family-owned company we work with recently set a below-market compensation budget for a role. The owner confided in me that the company’s largest customer had accumulated a ridiculously large receivable balance, and they simply could not afford to go any higher. Large companies might have a salary matrix that a hiring manager simply cannot deviate from. The reality: sometimes you cannot negotiate.
- Keep the emotions out of it. Salary negotiations are inherently emotional. Have the mindset that the employer you are entertaining wants to hire you. Keep a positive attitude. If the employer “succeeds” in getting a candidate to accept less than the candidate’s desired compensation it could lead to resentment. Employers are cognizant of this. On the flip side, if you’re a candidate that held a desperate employer over a barrel to get an above-market offer just because you could, then keep in mind that water always finds its level. True story: I was at the executive table when the CEO told all of his managers we needed to lay off 30% of our team.
- One bite at the apple. Bundle your asks. If you ask for more PTO, and you get it from the employer, don’t treat the employer as a gift shop by then asking for something else. The employer likely thought you were going to accept when they gave you what you asked for. Now, you want something else? Good chance you’ll irritate the employer. If you have multiple asks, I suggest you request to prioritize what you want with your employer and talk through it.
- Live conversation trumps email. Pick up that excruciatingly heavy phone and speak live to the employer or hiring manager. Again, keep it positive and avoid dragging it out.
- Practice. I’m not a big business book reader, but there are a few goodies that I’ve read, including Crucial Conversations by Joseph Grenny. Roleplaying is not exactly a good time, but going through the anticipated conversation with a spouse, friend, or parent helps. I also suggest you write down your talking points to avoid forgetting something and needing to come back for a second bite at the apple.
There are a ton more subtle nuances that I could go on and on about, but just keep it simple with the above.
Conclusion
I earn my living getting deals done between willing buyers and sellers or employers and candidates, respectively. Note: either party can do everything right and not get what they want. A candidate can accept another offer, get cold feet, or take a counteroffer (generally, a bad idea). An employer can make a generous offer that gets turned down, or the employer may simply not be able to afford a great candidate they covet. If you’re working with a solid and honest recruiter then let them handle it. As recruiters, we work for the employer, but we also don’t earn a fee unless a deal gets done, so we also work for the candidate to get them what they need.
Bill Wednieski is the Managing Director for The Headhunters. Learn more here.