Wednesday, March 11, 2009

Negotiation skills during an economic downturn

Counseling is a very odd profession. Odd because we are largely given the societal task of being experts at broad range of things at which we are unlikely to actually have expertise. If you want proof of this go to an online bookstore and type in “parenting” and look at the hundreds of how-to books that you will be given. I am always amused when I go to a career development conference that there will be no fewer than five presentations or seminars on building the perfect resume… all different, but all guaranteed to “make your application stand out.” (We’ll get to this topic next week sometime.)

The same can be said for negotiation. Dozens of experts claim to have the foolproof method for getting what you want from anybody. Adding to this problem is a fable that seems to be drifting through our culture that any job offer is a lowball offer and should be countered. Nothing could be further from the truth, but that does not mean that you should never ask for more. The question is what “more” should you ask for. First, a cautionary and true tale. The names and places have been changed for standard reasons.

When I was in graduate school, my friend Norbert went to Sheboygan to complete his predoctoral internship. As you are aware, Sheboygan is a town rich in academic history and as his internship was ending he secured and interview and eventually an offer with a well-known university. He was happy, they were happy, everybody was happy. Okay. Not exactly true. His advisor, upon hearing that Norbert had accepted the job without any negotiation scolded him and told him that he ought to at least ask for moving expenses. Norbert is one of the kindest, gentlest people that I know, so I am certain his request was likewise kind and gentle. The department chair told him he would have to talk to the dean and he would get back to him. Two days later, Norbert received a letter from the chair and the dean expressing their great disappointment that he would ask them for more money after their generous package of salary and benefits and rescinded the offer of employment. (Did I mention that this was very late in the game and that Norbert had already turned down two other offers? Brrrrrr. Chilling, huh?)

Today’s lesson? What can you negotiate in a very, very bad economy?

Please sir, can I have some more?

First allow me to dispel a common myth about job offers. Most entry-level and mid-level job offers are made “on the nose.” That is, typically what you are offered is what you are going to get salary-wise. This is particularly true in large organizations where pay ladders and job categories are tightly controlled. Universities are horrible about advertising a pay range of $36,000 to $48,000 for an entry-level professional position when they know that they will be limited to offering $38,000-39,000. Any wiggle room is quite minimal.

This is not the case for seasoned mid-level and senior managers. Most often, these salary ranges will be posted as “Commensurate with experience.” One word of caution here. The current economy has made the candidate pool for these jobs much more competitive, resulting in less room to negotiate.

So, am I saying that only more experienced applicants should negotiate? Absolutely not! There are, however, a few ways to prepare yourself before you do ask for more.

Knowing is understanding.

The single most important fact to have at your fingertips is the typical salary for the position for which you are applying. The most commonly used these days seems to be Salary.Com. It takes a little tweaking, but I finally managed to get a reading for my current position and found that I am at about the 80th percentile. (About what I would expect.) For broader ranges, you could use either O’Net or California Career Zone (Even if are not in California), both have decent salary snooping tools. If possible call a few HR departments even before you begin your job search and find out the going rate for a widget salesperson.

This also goes for knowing your “salary requirements.” A common question that we get is whether or not listing a salary that is too high will result in you not being considered for a job. I always respond with the flip side which is, “What if your requirements are too low and they offer you what you ask for. Spend time making a list that includes car payment and insurance, rent/mortgage, groceries, annual clothing expenses, entertainment, medical payments, charitable gifts, etc. You don’t want to be resenting your boss a year from now because you screwed up the math now.

Compensation vs. salary.

Story #2. A few years ago a colleague at the university asked my advice about an offer her husband had received. It was about $250 more per month, but they were unsure about the company compared the large well-known company where he was currently employed. I asked about medical coverage (didn’t know), paid time off (wasn’t sure), commuting distance (30 miles further), and retirement (didn’t know). I said that I didn’t have enough information to make a decision, but it didn’t sound like a good idea. My friend then shared that he had already accepted the offer.

Over the next few weeks they found out that the new company made no contributions to the employees retirement, while the old company matched contributions up to 8% of their salary. Since he made about $4200 per month, this amounted to as much as $320 per month in additional contributions. The medical coverage was more expensive by $70 per month and did not take effect for 90 days. The additional commute time and distance cost them 15,600 additional miles on their car and between $2000 and $2500 per year in additional gas and maintenance. Finally, left a job that gave him three weeks of vacation for one that gave him two weeks, but only after he had worked a full year. Adding all of this up, his $3000 annual raise was offset by $6680 in lost benefits from his previous job.

Do a full inventory of compensation or compensation necessities before entering into negotiations with a prospective employer.

What’s on the table?

Let’s assume for a minute that salary is not on the table. Certainly, if it is within 5% to 7% of the average for the position, it is not likely that it is on the table. Following is a short list of things that you should put into play before you even begin working for your new employer.

Time Off. Many places have set standards for differentiating between sick time and vacation time. One earns x hours of vacation per month for years 1-9 and x+4 hours per day for 10+ years. If you are offered two weeks of vacation and are told that salary is non-negotiable, ask if it would be possible to have an additional 4 or 5 days of paid leave each year.

Professional Memberships and Educational Leave. Several years ago, I attempted the gambit above and was told that it was against the organization’s policy to give additional vacation time. I asked if I could have 4 or 5 days per year for “professional development” and it was granted. I have also had my professional memberships paid by my employer and consistently seek out continuing education to roll off on the boss.

Technology. This can include a range of things from smart phones to laptops. I have been a MacIntosh user for 15 years and at every job since 1995, I have negotiated the replacement of my foul Windows box with a Mac. Likewise, I have asked for laptops instead of desktops. Think about cool toys that will make you more efficient and ask for them up front.

Medical coverage. Most companies will not pay you to decline coverage, but some will. My wife works in the healthcare industry and we have exceptional coverage through her job. At two previous stops, I have negotiated to have the company’s contribution that would have otherwise gone to my policy given directly to me.

Schedule. Over the years, I have worked an assortment of flexible schedules for a number of reasons related to family, hobbies, or community involvement. In fact, I currently work a 7:30 to 4:30 day which puts me on the freeway before absolute ground-zero traffic conditions. Other options include a 9/0 schedule which is 9-hour days with every other Friday off or a 4/10 which is 10-hour days with every Friday (or Monday) off.

Telecommuting. For five years while working for one employer, I had a monthly report to write which I did from home. It gave me the flexibility of one day off per month and I generally wrote the report during two or three late evening sessions. I have a friend who has negotiated ten days a month of work from home. His roundtrip commute is 110 miles, so his ten days saves him 1100 miles of wear and tear on his car and gives him back 20 hours (1/2 week!) that he would otherwise be on the road commuting.

What’ll you give me if I eat that whole thing?

Story #3. My best friend in college was Allen. He was constantly scamming and knew every way under the sun to get money. He sold blood regularly, knew the places to take textbooks to get the best prices, and was always on the prowl for a score. The local truckstop had one of those monster steaks… 42 ounces or something… that they would give to you free if you ate it in less than a two hour sitting. One night we went in and Al ordered the steak. When it arrived, it was mountainous. Before he started, he stood up and asked everybody to come look at its towering majesty. “What’ll you give me if I eat that whole thing,” he asked everyone there. Most people just went back to their seats, but four or five offered $25 dollars if he could do it. I held their money and his, while he gnawed away at muscle, fat, gristle, and French fries. Al finished the meal with about 10 minutes to spare. As we were walking through the parking lot, he waved his newly won $125 dollars at me and said, “I probably couldn’t have finished it if it weren’t for the motivation.”

If you ask for more money or vacation or benefits and are denied, ask your new employer what you have to do to be worth the extra. Get it in behavioral terms. “Start a new program with the elementary school” or “Double the billing on the Blankenship account” or “Pass the CPA license exam.” Then get a time frame. At you first convenience send a note or email that goes something like this.

Thanks for talking with me today about my role in the organization. It was very helpful. In particular, I appreciate your willingness to reconsider my request for additional time off and professional dues after I complete my CPA exam.

Print and save this document for your first performance evaluation to jog your boss’s memory.

Here’s the deal. When it comes to getting paid it’s not just about the Benjamins.

1 comment:

  1. One thing to remember is that salary ranges are all very well, but the key to maximizing your compensation is about clearly demonstrating the benefits that you can bring to an organization. A well-documented performance which provides a prospective employer with quantitative results and shows him how you solved problems or accomplished tasks is pretty tough to argue with!