“Let us never negotiate out of fear. But let us never fear to negotiate.” – John F. Kennedy
I was very excited when I got my first offer for a job in industry. The base salary was much higher than what I earned as a postdoc and I finally had some real benefits. However, there were some parts of the offer that I wanted to improve. I hesitated about calling HR. What if I offend my employer? What if they think I am too greedy? I had no other offer on the table, so why would they give me a better offer? Will I make a bad first impression if I ask for more than what I am offered?
Fortunately, I had read some books about negotiation (including Linda Babcock’s book that I list at the end), and I decided to give it a try. I was nervous when I called HR, but I told them the parts of the offer that I wanted to improve. The guy on the other end of the line was very relaxed. He had probably been through thousands of job offer negotiations. He simply said: “Let me ask my boss what we can do about this.” He called me back a few hours later and gave me an offer that was even better than what I expected.
The (surprising) reality is that your employer will see you as more valuable if you negotiate your offer, because part of the negotiation process is to emphasize what you are worth and the value that you bring to the company with your experience and skills. What is wrong with not negotiating?
Let’s say you accept an offer for $75,000, but you know others in the same geographical area are paid $80 -85000 for the same position. You might think, what is another $5K-$10K worth, especially after the taxes are taken out? Will negotiating salary offend my new employer?
There are a few things wrong with this line of reasoning. First, your salary increases are based on your pay. In addition, if you are offered a new job another company their initial offer will be based on what you are making at your current job. In other words, the higher your initial pay is, the higher your future salaries will be. That being said, some companies (or universities) will not increase your base pay even if you try to negotiate it. But as we will see, there are other parts of the compensation that you can negotiate, and sometimes they are even more valuable than your salary.
To summarize, here are the top five mistakes that job seekers make:
1. Not negotiating – accepting first offer
The most important step in negotiating is to decide that you will negotiate. Most employers expect a counteroffer, so there is always some buffer room in the offer. Perhaps not in the salary, but other factors such as start date, bonuses, vacation time, and flexible hours might be negotiable.
Many first time applicants have the attitude that they are so lucky to get the position, that they will just take it as is. Luck has nothing to do with getting the offer – you earned it through your hard work. Perhaps, there was a little good luck involved if you heard about the position by chance from a friend at the company who then forwarded your resume to the hiring manager. But once your resume is in, the outcome of the hiring process is based on your merits. Your first offer is just an initial offer, and there is almost always room to negotiate a better package for yourself.
2. Not asking what you are really worth
I worked in industry for several years and I know how much work goes into screening and interviewing candidates. By the time the company makes you an offer, they have screened possibly hundreds of resumes, phone-interviewed a dozen people, and called in 3-5 candidates for face-to-face interviews. Then they had internal meetings to decide whom to make an offer to. When you are offered a job, you are selected from a large group of candidates and the hiring manager and HR have invested a lot of time in making their decision.
Clearly, you are worth a lot to this company, and they do not want to lose you. In other words, the company views you as an asset, someone who brings value to the company, and your worth is probably more than your initial offer.
But, how do you if what you are really worth if this is your first job? This brings us to our next point:
3. Not having enough information
Negotiating salary is challenging if you do not have enough information. There are several ways to find out what you are really worth. Websites such as salary.com and glassdoor.com will give you an idea of typical pay for your position in your geographical area. When you ask for a higher salary, you can refer to this information during your negotiation. Universities usually publish their salaries and base packages and you can refer those if you want to negotiate an academic job.
The bottom line is that you need to gather information as much information as you can about how much compensation someone in your position receives before you sit down to negotiate. Websites are a good source of information, but so are professional contacts who can give you more information about typical compensation packages.
4. Not negotiating things other than base pay
Every candidate’s biggest fear is that the employer will say “No” to their request. Most likely you will not get everything you asked for. They may not increase your salary at all, or they might, but only slightly. Does that mean that you cannot improve your compensation package? An HR manager told me that everything is negotiable. Here are a few examples.
One candidate was offered a job that was an hour away from his home. His company’s policy was they offered a relocation package if the commute was over 50 miles. The commute was 45 miles – just 5 miles short of the relocation package cut-off. He mentioned this to HR, and asked whether he could be compensated another way for his long commute. HR offered him $5000 signing bonus – not a bad outcome for just having the courage to ask!
Another candidate was offered a job at the beginning of the summer, but by that time she had booked a 2 week trip for the end of the summer. Clearly, she will not have accrued enough vacation time in 6 weeks for a 2-week vacation. So she tried to negotiate for extra vacation her first year. While the company did not grant her extra vacation, they did allow her to take her vacation time early (which was normally against company policy). They also gave her the option of having one of those weeks unpaid, so she could still retain an extra vacation week for the following year.
To give you an example from academia, one successful candidate had to relocate to start a position as an assistant professor. The relocation package was fantastic, but the problem was that her husband could not relocate right away because he had a private medical practice. He needed at least a year to set up a successful practice in the new location. While the situation was not ideal, it was clear that the couple needed to live apart for six months to a year in order for both of them to succeed professionally.
In order to make this transition smooth, the assistant professor negotiated a 3-day weekends once a month for a year to be able to visit her husband, and no teaching assignment for the first year. She later acknowledged that the university did not grant her everything on her wish list (regarding the start-up package, for example), but she prioritized what was really important for her: being able to visit her husband once a month, and no teaching for a year to allow her time to develop a research program.
5. Not knowing your BATNA or your employer’s
What is a BATNA? BATNA stands for Best Alternative To a Negotiated Agreement. In other words, what is your alternative to accepting the agreement? If you have a current job, or postdoc, one alternative is to stay with that job. If you have another offer, you can mention the details of that compensation package and see this company can match it.
The most important thing about a BATNA is that you need to do the research before you negotiate – perhaps even before the offer. What is someone with your qualifications worth, and what is the minimum that you are willing to accept? If the base pay does not cover your expenses or the job does not offer flexibility in their hours (which is a high priority for some) – then ask for what you need in order to make this job work.
The company wants you (remember how much they have invested in you) and if your requests are reasonable, they will probably do as much as they can to keep you. However, if the #2 candidate was almost as qualified as you, then their BATNA could be to say “No” to your requests, even at the risk of losing you and then making an offer to the next candidate.
Coming to an agreement with a potential employer can take days, even weeks. Some people call is a “gentle dance” as you and your potential employer go back and forth about what you would like and what they can offer you.
6. Negotiating over email
I had the great fortune of getting in touch with Linda Babcock, the author of “Ask For It.” She pointed out that negotiating over email can lead to a lot of misunderstandings. I had never thought about negotiating over email, but I can see how some job candidates might try to do so, especially if they are afraid of the conversation. Negotiation is typically a back-and-forth process that is difficult to do via email. Face-to-face negotiation is the best, followed a skype video call. If neither of those is possible, then the phone is a much better alternative than email.
In order to maximize your chances of getting compensated for what you are really worth, remember to:
- Decide to negotiate
- Find out what you are really worth
- Make an ultimate wish list
- Prioritize your wish list
- Determine your BATNA – and your employer’s
- Negotiate in person, Skype or the phone – never through email
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