Negotiation of any kind is stressful for a lot of people, negotiating salary and compensation are downright scary.
As in most things, being clear about what you want and preparing ahead of time for the conversation leads to a much more successful outcome. We’ve compiled a few scenarios to help you think ahead about the outcome you want and how to handle these conversations. Start by anticipating the conversation about compensation and knowing how you’d like to answer the question. For help with this, take a look at our last blog about negotiating salary. Don’t sabotage your chances of getting the best offer possible by winging it.
Here are some ideas to help you build a case for a better compensation package:
SITUATION: Many states have passed laws that prohibit companies from asking about past earnings However they can ask, “What do you want to earn?” “What kind of compensation are you looking for?” or “What would you accept?” Probing for your salary range is legal and questions like these are getting asked on the front-end of the interview process. Interviewees are usually afraid that saying too high or too low will ruin their candidacy. They feel they can’t even take an educated guess because they don’t have enough information about the role, responsibilities, and deliverables.
Strategy: I coach my clients to say, “I’m actively talking to companies that are paying between X and X.” This accomplishes three things: First, it allows you to take some power back by letting the company know they’re not the only game in town. Secondly, by giving a range, it avoids the pressure of hitting their “magic number”. Lastly, you won’t get locked into the number you state, which may come in handy down the road. Avoid giving one number because you might get locked into it.
Strategy: When you state a range, always go in with a high number. If you believe the salary range should be $140K to $150K, start at $150K or $160K. That will give you some wiggle room to negotiate, and it prevents selective attention, a big hurdle in negotiation. Selective attention is when the interviewer focuses their attention only on the lower number and doesn’t even hear your higher number. Coming in a little high can protect you against selective attention.
Strategy: Never throw out a number you wouldn’t accept. Since the interviewer will hear the low number, they are more likely to offer you compensation based on that lower number. Therefore, I advise my clients to never verbalize a number they wouldn’t accept. Adjust your range for something you would accept, so you don’t get stuck.
Strategy: After you give your salary range, immediately follow up by asking, “Is that in line with what you have budgeted for this position?” or “What have you budgeted for this role?” or “How does that compare to what you’re looking to pay?” In most states, including California, New York and Massachusetts, companies are required by law to disclose the budgeted salary for the role. Since many candidates don’t know this, they don’t know to pivot their answer into a question, and this puts them at a disadvantage. Knowing the salary the company plans to pay gives you a leg up in the negotiation.
SITUATION: You receive a verbal offer at the end of the interview process, but you’re considering more than one offer. (FYI – Most companies will make a verbal offer before giving a written offer in an effort to save time on their end. They want to make sure the top candidate is likely to accept the job offer before jumping through the hoops of getting hiring approvals.)
When you get the offer your instinct may be to give an immediate answer. Pressing pause to consider your best course of action will pay off in this situation because it gives you more power in the negotiation. So, give yourself time to consider the offer, while also keeping their interest in you. Once you’re given the offer, thank your interviewer and let them know you’re excited to be at this point.
Strategy: If you are looking at multiple opportunities, be candid and say, “I’m excited about this offer. I have to tell you that I have another offer coming in and I want to make an educated decision. What I’d like to do is look at both of them and then come back with my questions.” Then, take a day to make sure the offer feels right.
SITUATION: You don’t agree with their offer and want to negotiate the compensation package.
Strategy: First, you must decide what you want to negotiate. Most people negotiate one of these five things: title, base salary, bonus, vacation time, and the start date. If you have several things you want to negotiate, prioritize what’s most important to least important. When you get back on the phone with the recruiter or hiring manager, let them know right up front what you want to discuss. Just know, if you hand your future employer a laundry list of things, it will likely annoy them, so I recommend you pick no more than three things and lay them out all at once. You have one shot at your negotiation, and what you choose to negotiate should have the most impact on your happiness in your new role.
SITUATION: The compensation package is not ideal, and you don’t know how to prioritize what you want to negotiate.
Strategy: Keep in mind if the title feels like a step back from your last or current job, then it probably makes sense to have this towards the top of your list. If this is the case, say “I’m a bit disappointed with the title because it feels like it’s a step back from my last position. What will it take for me to have the XXX title? Asking the question this way shows some diplomacy. It also keeps the question open-ended and pushes the other person to provide you with context and options.
Strategy: Many people want to negotiate both their base salary and their bonus. Unless you’re in a commission-based job, I recommend prioritizing your base salary over your bonus because everything (future increases, bonus percentages, etc.) hinges on your base salary. Also, since most bonuses are not guaranteed, it’s more advantageous to lock in a higher base salary. You might also find that bonus percentages are pre-set throughout the company based on title/level, so there’s often less wiggle room here.
Strategy: Asking for more vacation or PTO time is often one of the easier things to negotiate, especially if you’re in a senior management or executive role. If time off is what’s most important to you—and you actually take time off—then go for it, but if you’re a workaholic, you might not want to make this a big priority.
Strategy: Negotiating your start date is probably the easiest of all the things on your list. If you want a few days off between leaving your current job and starting the new one, typically asking for an extra week is not a big deal. If you’re in a job where you feel you need to see something through to the end before leaving, it can actually show your values and commitment to say you need to stay an extra week before leaving the company. But the long and short of it is…if they really want you, they’ll wait an extra week or so. You can’t usually push a start date out by two months, but you can push it out by three or four weeks.
A Real-Life Example
My client is a Chief Marketing Officer. During the interview process, she was told by the CEO that her package would look like this:
-Base salary at approximately $250K
-30% guaranteed bonus ($75K)
-Up to 30% additional bonus based on performance (up to $75K)
When the offer came through (delivered by the Head of HR), the guaranteed bonuses and performance-based bonuses were at 20%, below what she was told in the interview. Initially, they didn’t tell my client what time off would be, but the offer came back at two weeks. As a C-suite executive, none of this felt right. We talked about how to negotiate for what she wanted, which was to get to $400K.
After getting the verbal offer and thanking the Head of HR, she said she wanted a day to think through her questions, and then quickly called me. She said, “The base salary is what I expected, but when the CEO and I originally talked about the bonuses, the number I heard was 30%, and now I’m hearing 20%. When you take two bonuses at 20%, that’s a $100K difference. Did I hear something wrong or did something change?
The first thing I asked her for was her total compensation goal. It was $400K. It was important that my client knew what she wanted overall, so we agreed that when she called the HR Exec the following day that she would ask the question, “What can we do to get me to $400?”
Sometimes asking how to get to a final number gives the company the flexibility to be creative and get you to where you want to be in other ways. But before she could get to that, my client had to disclose that what she was told in the interview, and that what she was offered, surprised her. It felt like a bait-and-switch situation and that gave her pause. I coached her to ask a few key questions: “Walk me through how you came to these numbers?”, What can you do to get back to the percentages we discussed in the interview?”, “As a top executive, I anticipated at least four weeks of vacation, can you make that change?“
By asking for what she wanted in a diplomatic way, she and the Head of HR were able to talk through the situation and come to a resolution. The HR Executive did a great job of circling back to the CEO and securing what my client wanted. The company came back later the next day and gave her 30% on the two bonuses and had a plan to guarantee her $400K by the end of her first year. They also agreed to give her four weeks of vacation along with ten days of sick time.
My client was very happy to take the negotiated package and gladly accepted to offer. With a few questions and some confidence, she was able to get what she deserved.
Holian Associates provides strategy, resources and coaching for every stage of your career. If you need help with job search strategy, career transition, resume creation, LinkedIn development, interview preparation, or professional strengths coaching, email us at Julia@holianassociates.com or give us a call at (925) 451-3183.