How well do you negotiate?
Do you know all the things you can negotiate,
other than money?
Do you know how to negotiate the
highest total compensation the employer
can afford, without pissing people off?
After reviewing this site, you will!
“You do not get what you want. You get what you negotiate.”
– Harvey Mackay
This section is about negotiating the highest total compensation the employer can afford. It’s also about negotiating the highest raise your employer can afford.
To successfully negotiate compensation, there are three concepts you must fully understand: Leverage, Urgency, and Perceived Value Added.
Leverage is the power to produce a maximum advantage in a negotiation.
Your Leverage in the negotiation is a function of two things; their Urgency and your Perceived Value-Added.
Your Leverage = Their Urgency + Your Perceived Value-Added
What’s their Urgency?
Their Urgency is a function of how quickly
or urgently they must fill a position.
To estimate their Urgency in your situation, answer this question:
- How soon must they fill the position and why?
- How long has this position been vacant and why?
- How many others are they interviewing?
- Is this a new position or why did the previous person leave?
- Who is currently doing the work for this position?
Important: Someone’s currently performing the duties for this position and it’s probably your leader. Your leader can’t wait to get someone on-board so he can unload these duties. This Urgency gives you Leverage.
What if there’s no Urgency on the part of the employer?
If there is no Urgency from the employer, the only Leverage you have is your Perceived Value-Added.
What’s your Perceived Value-Added?
Your Perceived Value-Added is the employer’s perception of your ability to make a positive impact on their organization. Your Perceived Value-Added is quite simply the sum of everything you bring to the table (your knowledge, skills, experience, achievements, attitude, relationships, character, and balance) that has contributed, in some measurable and significant way, to the achievement of your employer’s goals.
Their perceptions of you come from:
- Your resume
- Your reputation (their checking and research of you),
- The additional skills you bring that they were not looking for
- How you answer questions and sell yourself during their interviewing process
- The other skills you bring to the position include additional education, training, and certifications, your contacts, more experience, etc. Many of these items will only be revealed during the interview process.
Your achievements are found in your resume and are reinforced by how well you present yourself.
To estimate your Perceived Value-Added in your situation, answer these question:
- How bad do they want you?
- Are they bragging or trying to sell you on the company?
- Are they saying things like, you’ll really like it here or when you start working here…?
- What do you bring to the position that was not asked for in the job description – like additional education, training, certification, contacts, or additional experience?
- How strong and relevant are your achievement as they relate to their Job Description?
Important Negotiating Rules
“A good teacher must know the rules; a good pupil, the exceptions.”
– Martin H. Fischer
Here are the three primary rules for negotiating total compensation:
Whoever States a Number First, LOSES!
When someone asks you about your salary requirements or a range, do not give them a number. Instead, respond by using one of the following:
“Compensation isn’t a big issue for me. But, finding the right match
is important. We can discuss compensation later.”
“I’m confident we can work out compensation later. Let’s
continue to see if I’m the right person for this job.”
“What was the range for my predecessor? If it’s a new position,
what range have you budgeted for this position?”
Don’t discuss compensation until
you have the offer in writing.
Get the offer in writing, then, ask for time to consider it. After 24-48 hours, return to your Leader (not HR) to negotiate the details.
You may be a good talker, but a job interview is not a conversation; it’s a competition. They’re judging you on everything you say, don’t say, and do. And, you should be judging them to see if this job is a good fit for you.
Check to ensure you’ve asked all your prepared questions or any other questions that came to mind during the interview. Strongest Leverage occurs after you have the written offer and before you accept the offer.
What are the Employer’s Gambits?
A Gambit is an action that can provide an advantage in a negotiation.
Your goal is to receive the highest compensation for your actual value-added or, at least, to be compensated fairly. The employer’s goal is to hire the best talent for the least price.
Their Gambit 1:
The tactic they will play against you is that they need your final salary numbers to put together their offer.
Your counter should be;
“I know that you’ll make me a fair offer. Should I wait around for the offer letter or should I come back tomorrow, or can you email it to me?”
Your goal is to ask for 48 hours to consider their offer and to get out of there with a written offer and
Their Gambit 2:
They can also say, we’re offering $55,000, will that work for you?
Your counter should be;
That’s fine. I’m interested in the entire package. I’d like to see your offer letter, is that okay?”
Do not begin to negotiate or give them a number. Negotiating only begins after you receive their written offer.
Then, as for 48 hours to consider the offer and go home.
Their Gambit 3:
During your first visit, you will be asked to fill out an Employment Application, which will normally ask you to answer the following questions:
- Have you ever files for bankruptcy?
- Do you have any felonies or convictions?
- What’s your salary history?
Your Counter: Answer all questions honestly. Do not leave anything blank. Just know that your past salary represents the floor of the negotiations-not the ceiling.
What are your Gambits?
Your Gambit 1: Put yourself in the position of your employer
What objections do you expect? What response do you have for these objections? Many people are afraid or too proud to negotiate and/or ask for anything. The better you negotiate, the more you’ll receive.
Your Gambit 2: Ask for more than you need.
When you ask for anything, your manager can answer three different ways. He can say, Yes, No, or he can split-the-difference and give you half of what you asked for. Anticipate this. If you’re asking for a signing bonus and you want $5,000, ask for $10,000 instead. This way your manager can think he’s winning the negotiation by granting you $5,000.
Your Gambit 3: Ask for things that reduce your out-of-pocket costs.
Salary isn’t everything! What you get to keep is far
more important than how much you make.
By that I mean that it’s your job to do all you can to reduce your out-of-pocket expenses. If you’re smart, you can ask for things that have little value to them but have great value to you.
Here’s an example. What kind of company are you joining? Most companies either sell products or provide services to their customers.
If the company sells a product:
If the company sells a product; you can ask for free stuff or stuff at a reduced price.
Example: I once had a client who was negotiating with one of the largest grocery chains in the region. When they reached the ceiling on salary, my client asked for free groceries for his family for a year. They agreed.
If the company provides a service:
If the company provide services, can you get free or reduced price services.
Example: A client was interviewing with a company that rental cars. My client asked for the use of a rental car of his choosing as part of his contract. They agreed.
What if the company does neither? If so, use Gambit 4.
Your Gambit 4: Ask for incentives based on your KPIs.
If the company does neither, ask to link additional compensation (bonus) to your future performance (your Key Performance Indicators (or KPIs) with a performance review after a specified time (after 90-days, or six months). If you do not already know your KPIs, ask for them.
For example, one of my clients wrote:
“Thanks to Ed, I learned the secrets of running a successful job search and in only two weeks I found my career position. I actually had two offers from which to choose and was able to leverage that situation into a 10% raise plus a bonus, all before I ever worked a day. Thanks doesn’t seem enough.”
– William S., San Diego, CA
Did my client get a 10% raise and a signing bonus because he deserved it?
NO, he got it because he asked for it! And, so can you!
I would also add:
You don’t get what you deserve, you get what you negotiate!
Example: I had a client who interviewed with a company that produced and sold heavy lift equipment like forklifts. Here, he needed to be a little more creative. He asked his manager to link a 10% Bonus to his Key Performance Indicators (KPI), that he created.
Why not link a salary increase, or a bonus, or both to achieving,
maintaining, or exceeding your KPIs?
If you don’t achieve them, no big deal. Renegotiate them in a year. What do you have to lose?
Your Gambit 5: Take time to consider the offer.
When a final offer is extended, if it’s not enough, thank the employer and ask for time to consider the offer (24-48 hours is customary). Then, come back and try asking one more time by asking, I know you said that you couldn’t go any higher in terms of salary, but is there anything else you can do to make this offer more attractive? (Like more vacation, signing bonus, free access to…, etc.)
Your Gambit 6: What else can they offer to sweeten the pie?
At the end of the negotiation, especially if things did not go your way, ask, What else can we do to make this deal better? Now, be silent! Let them figure out how to solve the problem. Also, you don’t have decide on the offer yet. You could recommend that your manager take 48 hours to think about it. Then, decide.
Your Gambit 7: Use silence for consideration
During negotiations, in response to an offer, restate the offer, sit quietly, and silently count to 10. This technique may also prompt the employer to justify the offer, which could continue the negotiation process, or it could lead to a better offer.
Your Gambit 8: Walk away!
Don’t be afraid to walk away. By that I mean, respectfully decline. Don’t burn any bridges. If you feel their offer to be unfair, do not accept the offer and move on.
Conduct a Salary & Cost of Living Survey
Compensation is always a trade-off. You have something to sell; your Perceived Value-Added, and the employer should fairly compensate you for it.
Any good employee should be worth 4-5 times their annual salary.
Conduct a Salary Survey:
Get on the Internet and review pay surveys to see what the average pay is for your position and industry (like Survey Monkey).
Conduct a Cost of Living Survey:
You can’t estimate a fair salary without assessing the cost of living for where you and your family will be living. Especially if you’re are moving from the mid-west to either the East or West Coast. A salary of $80, 000 may be great for Kansas City, but you’ll twice that salary on either coast.
Conduct a Needs Assessment
What are the Employer’s Needs?
As you prepare to negotiate, find out the employer’s needs (focus on their Job Description) and try to meet them without losing sight of your own goals.
Here are a few questions to help you better determine the employer’s needs:
- What is the employer asking for in their description of the job?
- Do you meet all their requirements?
- Do you exceed their requirements?
- Are you a good match?
- What else can you do for the employer that exceeds what they’re asking for?
- Have you done your research on the company?
- Have you read all the news you can find?
- Have you talked to other employees before your first interview?
- Have you uncovered other needs within the company during your interviews?
This isn’t rocket science! Their problems, concerns, and needs are out there. You just need to dig a little!
What are your Needs?
To be continued: If you’d like to learn more about negotiating the highest compensation the employer can afford, you can do so by adding these books to your professional library, today!
Executive Coach reveals Job Searching SECRETS Employer’s don’t want you to know about who gets called for job interviews and who gets hired.
Here you’ll learn:
1: WHAT EVERY COMPANY MUST HAVE TO SURVIVE
2: WHAT VALUE DO YOU BRING TO AN EMPLOYER?
3: WHAT ARE YOUR ASSETS & LIABILITIES?
4: WHAT’S YOUR SEARCH FOCUS?
5: ASSESSING YOUR CURRENT RESUME
6: BUILDING YOUR COMPELLING RESUME
7: 19+ PROVEN WAYS TO GET THE INTERVIEW
8: INTERVIEWING TO RECEIVE THE JOB OFFER
9: NEGOTIATING TO RECEIVE THE HIGHEST OFFER
10: ASSESSING YOUR JOB SEARCH
11: CHANGING CAREERS?
In just a few minutes, you can own your copy of this book, and begin using what you learn to find your NEW JOB tomorrow.
Also, if you feel this information could help someone else, please take a few moments to let them know. If it turns out to make a difference in their life, they’ll be forever grateful to you – as will I.
Let’s make a difference together – one person at a time!
All the best!
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