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“Let us never negotiate out of fear. But let us never fear to negotiate.” --John F. Kennedy. Salary Negotiations. Why Negotiate?. Six Reasons Why You Should Negotiate, from idealist.org. It’s okay to ask for what you’re worth. The first offer is often not the best possible one.
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“Let us never negotiate out of fear. But let us never fear to negotiate.” --John F. Kennedy
Salary Negotiations Why Negotiate?
Six Reasons Why You Should Negotiate, from idealist.org • It’s okay to ask for what you’re worth. • The first offer is often not the best possible one. • A higher starting salary means higher raises (in this or future jobs). • Salary is not the only part of a compensation package that you can negotiate. • Asking for a more competitive salary/benefits package does not suggest that you only care about money, or that you do not care about the mission of the organization. • Negotiating shows that you are confident in and can advocate for yourself and your abilities
Basics • Determine the benchmarks for the position • Assess your Bargaining Power • Determine your Priorities • Identify What is Negotiable • Develop a Negotiating Strategy • Negotiation Approaches • Negotiation and Gender
Determining Benchmarks • What Is Benchmarking? • “Researching and comparing the broader job market’s standards for compensation, title, responsibilities, and perks based on the position, your skill set and qualifications.” -- Negotiating Your Salary & Perks, WetFeet
Determining Benchmarks • Research Salary Surveys: • Opm.gov • Bureau of Labor Statistics • Jobstar.com • Vault.com • The Riley Guide • Salary.com • cbsalary.com (calculator tool by region/state)
Determining Benchmarks • F&ES Statistics, Class of 2009 • SALARIES BY DEGREE ($US) Masters MEAN • 1 degree n=34 52,931 • Joint degree n=11 75,318 • Total n=45 58,404
Determining Benchmarks • F&ES Statistics, Class of 2009 • SALARIES BY SECTOR ($US) Masters MEAN • Non-Profit/NGO 53,708 • Private (bus/consult/law) 72,319 • Gov/Public 54,502 • Academic (k-university) 57,000
Determining Benchmarks • GS 9, typical starting salary for Masters degree, Jan 2009, from opm.gov • Step 1, Atlanta: $49,581 • Step 1, Boston: $51,871 • Step 1, Seattle: $50,628
Determining Benchmarks • Other Sources of Information • Trade Magazines • Human Resources Websites (for employer and competitor salaries and benefits) • Local Cost of Living Data • Recent Alums
Assess your Bargaining Power Stronger Items: • You were strongly recommended • There are few other candidates • There are several valued FESers in the organization already • The employer is concerned about you taking a job elsewhere • You have very relevant education, skills and experience • You have several offers and are not worried • You have strongly “sold” your value to employer
Assess your Bargaining Power Weaker Items: • There are many candidates • You have little relevant experience/education • Your calls are not returned or are taken by an assistant • You’re feeling desperate • You learned about job through a job posting • You’ve left it to employer to assess your value rather than strongly selling yourself
Assess your Bargaining Power • Note on Entry Level Positions and Bargaining Power: While some degree of negotiation is appropriate for any position…it is better to approach negotiations for an entry-level position with limited expectations and a shorter list of “must haves.” – idealist.org
Determine Your Priorities What really matters to you for your satisfaction in this career move? What are your goals? • Sample Priorities List: • Location 35% • Salary 20% • Org’s commitment to social justice 20% • Rapport with supervisor and colleagues 10% • Opportunity of this career move 10% • Benefits 5%
Identify What Is Negotiable • Tuition Reimbursement • Professional Development Opportunities • Profit-Sharing and 401(k) Programs • Health Insurance • Work Schedule/Flex-time • Vacation Time • Severance Pay • Local Travel • Housing
Identify What Is Negotiable • Title • Responsibilities and Opportunities • Salary • Signing Bonus • Moving Allowance • Performance-Based Bonuses and Commissions • Review Date • Stock Options
Develop a Negotiating Strategy • Self-knowledge—to “sell” yourself, position yourself with more bargaining power and increase value of position • Increase the value of you in the position • Effective Presentation—give yourself immediate credibility, add bargaining power
Develop a Negotiating Strategy • Be enthusiastic and connect personally • Don’t ask for no as an answer (i.e. “Is there any chance you can go higher than $40,000?” Instead try “Wouldn’t you agree it’s important to be competitive? Based on my research, $45,000 is an average starting rate.” • Connect with the decision-maker
Develop a Negotiating StrategyConnect with Decision-Maker: Negotiations in Different Sized Companies • Medium-sized Company • Usually starts with HR manager—may be screening phone call to check for competence, honesty and appropriateness to position. • Likely that you will then be passed on to reporting manager. • Offer likely to be made by reporting manager who you can negotiate with directly. -- Negotiating Your Salary & Perks, WetFeet
Develop a Negotiating StrategyConnect with Decision-Maker: • Large Company • Usually starts with HR manager • May go to hiring manager, who may make the offer and negotiate with you. • For lower level positions, however, HR manager may make the offer and do the negotiating with you. In this case, you should try everything you can do to get your resume to the reporting manager, who can be an ally—increases your bargaining power. • If negotiating with HR manager, you can still discuss potentially negotiable areas. After you’ve pushed in all areas, try to negotiate for an early performance review. -- Negotiating Your Salary & Perks, WetFeet
Develop a Negotiating StrategyConnect with Decision-Maker: • Small Company • Jobs commonly posted directly by decision-maker • Decision-maker may be owner or senior staff • Hiring manager may handle the whole process—interview, offer, negotiation • Less formalized, more opportunity to connect personally -- Negotiating Your Salary & Perks, WetFeet
Develop a Negotiating Strategy • Explore everything an employer can offer • Benchmark all aspects of an offer • Know how to discuss salary history intelligently • Continue to interview elsewhere • Be selective re: what you negotiate on, i.e. review priorities • Don’t name the salary first
Develop a Negotiating StrategyNaming Your Salary “The person who gives the first number sets the starting point. But if that's you, you lose. If you request a salary higher than the range for the job, the interviewer will tell you you're high, and you've just lost money. If you request a salary lower than the range, the interviewer will say nothing, and you've just lost money.” -- Penelope Trunk, Brazen Careerist, The Answer to the Toughest Interview Question
DEVELOP A NEGOTIATING STRATEGYDon’t Name the Salary First • The salary discussion and other negotiations should ideally begin when an offer is given • If asked during an interview, try the following responses to avoid giving a number…
DEVELOP A NEGOTIATING STRATEGYDon’t Name the Salary First • What salary range are you looking for? "Let's talk about the job requirements and expectations first, so I can get a better sense of what you need." -- Penelope Trunk, Brazen Careerist, The Answer to the Toughest Interview Question
DEVELOP A NEGOTIATING STRATEGYDon’t Name the Salary First • I need to know what salary you want in order to make you an offer. Can you tell me a range? "I'd appreciate it if you could make me an offer based on whatever you have budgeted for this position and we can go from there." -- Penelope Trunk, Brazen Careerist, The Answer to the Toughest Interview Question
DEVELOP A NEGOTIATING STRATEGYDon’t Name the Salary First • What are you expecting to make in terms of salary? “Have you established a range for the position?"
Develop a Negotiating StrategyWhat are your salary requirements? • “My requirements are negotiable, depending on the responsibilities of the position.” • “Salary is negotiable.” • “My salary requirements are negotiable and flexible.” (but do this only if you are, indeed, flexible)
Develop a Negotiating StrategyWhat is your salary history? • “As I’m just completing my masters degree, I have a new set of qualifications, experience and level of expertise, so don’t have comparable salary history data.”—then move on to your benchmarking figures… • State your salary history (if applicable) or desired salary in a broad enough range so as not to knock yourself out of the running or set the offer lower than what the organization expected to pay.
Develop a Negotiating StrategyFactors to Consider in Determining Your Living Wage • Housing • Clothing • Food • Automobile/Transportation • Insurance • Medical/Health • Support for other family members/pets • Bills & Debts • Taxes • Savings/Retirement • Discretionary • Cost of Living in New Location
Develop a Negotiating StrategyDetermine Your Living Wage • BOTTOM: Living on ramen and popcorn with 20 mile bicycle commute from tent • TOP: 2 weeks in Europe every year, new hybrid, shopping at Whole Foods, puppy • Living Wage = Somewhere in between. • Compare Living Wage with Benchmarks
Develop a Negotiating Strategy Walk-Away Point • The point at which you move on to the next opportunity. • Is your living wage your walk-away point? The bottom of your benchmarked figure? Is the point higher? Lower? • Is point firmly in mind?
Negotiation Approaches You should negotiate from a position of strength—not need or greed. -- Dynamic Salary Negotiations, Ron and Caryl Krannich • Response based on benchmarking (According to the salary surveys I’ve read…) • Response based on employer’s needs (As we’ve discussed, I have extensive experience in the areas related to the position, and over and above can bring expertise in x…) • Response based on creative alternatives (I realize this offer is based on company-wide salary-standards, which is very fair. However, I’m confident that I will make a significant contribution in a short time. Would you consider a salary review in 3 months?) -- Negotiating Your Salary & Perks, WetFeet
Negotiation Approaches • Response designed to create tension (I am looking at several opportunities…) • Response designed to reduce tension (I hope I’m not being unrealistic about what you can do—I’m very interested in the position and hope to reach an agreement that seems fair to you and takes into account what I bring to the job…) • Avoid the counterproposal (I was really hoping for x…) and focusing on your needs (you should know what you need, but don’t have to share all the details)
Negotiation ApproachesResponses to Avoid • Runaway Ego (“I don’t need this job, so if you don’t make it worth my while…”) • Showing Off (“I really don’t need the money, I just like the work.”) • Patronizing Manner (Have you read my resume? Do you know I’m from Yale?) • Showing Your Cards (After a great offer saying “Oh I thought it was going to be much lower!”) • Late-Breaking Demands (Bring up prior commitments early in process, not at the end) -- Negotiating Your Salary & Perks, WetFeet
NEGOTIATION APPROACHES: Leveraging one offer against another You get an offer from Organization A right away, but you really want to work for Organization B. You can contact Organization B and let them know that you’re really interested in their position, but that you’ve received another offer. Tell them your timeline (when you need to either accept or decline the first offer), reiterate your interest in their position, and ask if they’ll be able to let you know their decision in time for you to evaluate both positions. – idealist.org
NEGOTIATION APPROACHESNuance and Win-Win Some job seekers end up creating a situation that is more confrontational than it really needs to be. Negotiation is a nuanced art; it is never an ultimatum…Beware of your tone and the language you use…be sure to begin with mutual respect, an awareness of other perspectives, and an understanding that the end result isn’t victory or defeat, but an agreement that allows both sides to come away satisfied. – idealist.org
Negotiation ApproachesThe Power of Silence “So, we think your resume looks good and the team is excited to work with you. Our current thinking is that it might make sense to start you off at an annual salary of $50,000… • Good Response? Silence. • Employer may rephrase as a direct question to which you can then open negotiations on. • Employer may be more uncomfortable than you are with silence, and may be compelled to speak up and up the previous offer. • Demonstrates that employer cannot assume a dominating role. Tip: If uncomfortable with silence or eye contact at this point, look thoughtfully at your materials. -- Negotiating Your Salary & Perks, WetFeet
Negotiation ApproachesTake Time to Think Over Offer When Negotiating is Through • Ask for the offer in writing (buys you a few days)—may not be a contract, but a summary of salary and benefits in writing. • Tell the employer how much time you’d like to consider offer (This is fantastic, and I’m extremely interested. I’d like a few days to consider the offer, and will get back to you on Wednesday.)
Negotiation and Gender • In surveys, 2.5 times more women than men said they feel "a great deal of apprehension" about negotiating. • Men initiate negotiations about four times as often as women. • When asked to pick metaphors for the process of negotiating, men picked "winning a ballgame" and a "wrestling match," while women picked "going to the dentist." • Women will pay as much as $1,353 to avoid negotiating the price of a car, which may help explain why 63 percent of Saturn car buyers are women. • Women are more pessimistic about the how much is available when they do negotiate and so they typically ask for and get less when they do negotiate—on average, 30 percent less than men. --Women Don’t Ask: Negotiation and the Gender Divide
Negotiation and GenderAnother Take “I think the reason women do poorly in negotiations is that women assume you should ask for what you want, but men know that’s not how the game is played. Men know that you need to be aware of what you want, but that’s not necessarily what you ask for.” --Try this: Don’t ask for what you want when you negotiate, Penelope Trunk
Negotiation and GenderAn Analogous Indirect Approach The agency you are negotiating with has offered you $45,000, but you are shooting for $50,000. Instead of directly asking for more money, you might remind them of a unique skill you bring to the table—something not in the job description but useful to them, such as advanced GIS. You know they don’t allow a moving allowance, but you bring it up anyway. Then you bring up sign-on bonuses, and dental insurance. Unprompted, the HR rep offers you $2,500 more in your starting salary after telling you he can’t offer dental or a moving allowance. Now you’re half way to your salary goal and you haven’t even asked for it.
And Remember… • There isn’t one right way to negotiate. While there are a number of steps you can take before the negotiation (wait for an offer, research benefits, prioritize which elements of an offer are most important to you), there isn’t a foolproof script to follow. -- idealist.org