Salary Negotiation

Salary does not necessarily correlate with the value you add or the contribution you make to society. It is simply the amount the market will bear to purchase your services which include your skills, expertise, knowledge and special talents.

Students often feel of some concern when considering their first job offer. Sometimes this anxiety stems from a fear that an organization may be "low-balling" their salary or might alienate a future employer by appearing too demanding if they ask for more money. These tips may minimize any anxiety you may have by providing you with the what, when and how of salary negotiation.

The Organization’s Prospective

Most organizations, both large and small, establish salary ranges for every position based on standards and general practices for the field. It is in the organization’s best interest to hire you taking into consideration fair market value for several reasons:

• The hiring process can be long and expensive, therefore it would be inefficient for an organization to make low offers only to be rejected and have to begin in the recruiting process all over again.
• Organizations want to hire and retain good employees hence, it is unproductive to pay you less than other employers.

Organizations determine where an employee falls in the salary range based on experience, special expertise and knowledge. For example, a recent college graduate hired for an entry-level position with limited experience will be paid somewhere between low- to mid-range. Hiring managers often reserve midpoint salaries for more experienced individuals who need little training.

The What, Why and When of Salary Negotiation

What is it?

Salary negotiation is the process of reaching an agreement on what an organization will pay for your skills, knowledge and experience. It is both the organization’s and your best interest to come to a mutually beneficial agreement.

Why or Why Not Negotiate?

The only reason to negotiate is to get fair market value for your skills, experience and knowledge. The process is important for future earnings because most raises you get will be based on your starting salary. However, it is unwise to negotiate for negotiation’s sake. For example, sometimes job seekers think a hiring manager expects them to negotiate, or that salaries should be negotiated as a general principle. Although organizations respect employees who can articulate the value they add, recent graduates can quickly alienate potential hiring managers if they are inappropriate and over enthusiastic in their approach to negotiating their salary.

When Should you Negotiate?

Two things need to happen before you negotiate. Begin discussing salary only after you have received a formal offer, preferably in writing. Initiating a discussion regarding salary before this point could eliminate you prematurely from hiring consideration. Negotiate only after you have researched what the market will pay for your services in this field. This research will arm you with the evidence you need to know if the salary offered is reasonable or whether you should make a case for a higher salary. The fact that your friend has received a higher salary for a similar job at a different company is insufficient data for negotiation purposes.

The Salary Negotiation Process

Know Your Market Value

Your success in negotiating a better compensation package is based on concrete data you have, which suggests your market value is higher than reflected in the offer. New college graduates often do not have the experience or expertise to warrant a higher salary, however, there are exceptions:

• Gained relevant work experience through internships or summer jobs which positively impacts your ability to do the job.
• Equipped a particular technical expertise which is in high demand.
• Earned an advanced degree in a specific area of expertise.
• Received a written job offer from another company that provides you with a higher salary.

Know What You Want

Salary is only one part of the a total compensation package that might include any of the following:

• Base salary
• Retirement plans
• Medical, dental, and vision benefits
• Life insurance, accidental death insurance and disability benefits
• Bonuses based on performance and/or profit sharing
• Vacation time and/or sabbaticals
• Education reimbursement
• Relocation costs
• Extras such as car allowance or company car, health club membership, sophisticated computer equipment, child or elder care.

For some organizations these items are not negotiable and even the salary can be in a fixed classification scale. However, other organizations may be willing to negotiate on salary, bonuses, date of salary review, relocation costs or extras.

Know the Job

Before you start negotiating, you want to be clear on how your skills benefit the organization. This can be difficult to assess if you do not have a lot of work experience. However, here is a technique which might help. Try to identify the needs of each person who interviews you and how you are a solution to their challenges. Then, when you are negotiating, you have specific data about how you will add value. You will be able to confidently state that you are worth $ 5, 000 more because of your ability to create specific software, design the new manual, or write the necessary grant proposal.

What to Say During a Negotiation

STEP 1: RECEIVE THE OFFER

• Thank the hiring manager or human resources person for the offer and express enthusiasm for the position.
• Reiterate how important this decision is for you and ask for some time to think it over in order to make a good decision. If it is a verbal offer only, ask when you can expect to receive the offer in writing.

STEP 2: EVALUATE THE OFFER

• If you have any questions about the benefits ask the hiring manager or human resources contact for clarification.
• Evaluate the compensation package
• Identify several backup options in case your first request has been denied.

STEP 3: NEGOTIATE

• You have already evaluated the offer and done your homework, therefore you are ready to negotiate. Following is a sample of a negotiation process:
  "I want to say again how extremely pleased I am to have the opportunity to work with you and this organization. However, I would like to discuss the compensation, as it is less than I had expected."
  The answer might be something like: "What did you have in mind?"
  "First, I would like to know how you arrived at this compensation to make sure I understand the salary structure. I want this to work for both of us."
  Listen to the manager’s response. Then say something like:

  "I understand the organization prefers to bring new college graduates in at the lower end of the range for this position because they typically lack the experience which warrants a higher salary. However, I feel my three years of summer internship experience within this industry plus my leading edge technical skills warrant a higher salary." (If you have other hard salary data from your research, diplomatically mention it here)
  Now let the hiring manager think and/or talk. If the compensation is not negotiable, you have a decision to make based on the current offer, or you may suggest the next option from your backup plan.
  The most important components of this process are:

• Know what you want and what is realistic based on solid research;
• Communicate what you want clearly, diplomatically, and briefly;
• Stop talking and start listening once you have made a request.

AFTER NEGOTIATING

• Once you and your manager have come to a mutually satisfying agreement, ask for something in writing that reflects your mutual understanding. This usually will be in the form of an amended offer letter. Once you have signed the letter, you have got yourself a job. Congratulations!

Business Etiquette

How Can I Make The Most Of My Time At Business Functions?
There are several things to keep in mind. Both men and women always stand when meeting someone or being introduced. Remember to make good eye contact, have a friendly smile and a good, firm handshake. If you are at a large gathering and you do not know anyone, take the initiative to introduce yourself by using your first and last name only and provide some brief information about yourself. Read body language and be aware of infringing on others. Avoid incorrect terms such as anyways, yeah, you guys, and repetitive phrases such as "you know" and "stuff like that".