Some Things to Know Before Negotiating Salary with a New Employer

This guest post by Liz Handlin, courtesy of Recruiting Blogswap, discusses a variety of factors for applicants to consider in discussing and negotiating salary for a new position.

Ms. Handlin is the CEO of Ultimate Resumes, LLC, and writes Liz Handlin’s Ultimate Resumes Blog.

I have been involved in all sides of salary negotiations: as a headhunter, in-house recruiter, hiring manager, and on my own behalf. I don’t necessarily consider myself to be a great negotiator, but I do have a pretty good understanding of what is going on behind the scenes in salary negotiations, and I hope to offer some useful suggestions for candidates.

There are many schools of thought about salary negotiations, and it appears that many of them involve game playing, duplicity, and tiptoeing around an actual number.

I read a post by another blogger yesterday who gave what I thought was pretty bad advice about forcing the hiring manager or recruiter to give a range or a number before answering the question, “What salary are you looking for?”

Obviously everyone wants to get paid as much as they can, but it doesn’t make sense (for most people) to refuse to answer this question with, at the very least, a salary range, because if you do that you may just irritate the recruiter who asked the question.

Why do recruiters ask for your salary?

Let’s face it, most of us wouldn’t work for anyone else if we didn’t need the money. So money is an important part of the employment relationship. Your current salary provides some important clues to the interviewer.

• If your current salary is far below the salary range of the job you are interviewing for, the hiring manager will wonder why. Perhaps it means your skill set isn’t as developed as the job requires. On the other hand, maybe it only means your current employer pays below market rate.
• If you are selected for a job that pays significantly more than you are currently making, an employer may make you a salary offer near the bottom of the salary range. Some employers do this so they have more latitude to reward you for good performance with merit increases and promotions.
• If your current salary is higher than the range for the job you are interviewing for, the interviewer may wonder why you want to interview for a job that pays so much less. Maybe you have had some job some problems. On the other hand, maybe you are willing to take a pay cut to join a really elite team. If that is the case, this topic needs to be discussed openly in the interview.

Salary negotiation depends on several things:

Your level of experience and the level of the job you are interviewing for.

• The less experience you have and the less unique your skill set the less room you have to negotiate.

The person with whom are you negotiating (hiring manager, HR representative, executive recruiter)

• In most companies, hiring managers decide how to allocate their budgets. Generally, HR representatives are messengers who report your past salary, salary requirements, etc., to the hiring manager.
• In some organizations the HR manager negotiates on behalf of the hiring manager.
• Find out who makes the final decision about salary and perks, and, if possible, deal directly with that person.

The type of employer (small private company, company with venture capital money, large corporation, public sector employer).

• Large companies may have more money, but they usually have more policies, procedures, and bureaucracy.
• In many large companies, hiring mangers may not have a lot of latitude to offer larger salaries to new hires.
• In small companies, there may be more latitude, but fewer resources.
• If you think your skill set is worthy of a high salary, make a case for that early in the hiring process. Make sure your resume sells your unique accomplishments and skills (back this information up with metrics when possible), and be sure to discuss these things when you interview.

Other perks that come with the job.

• Jobs that come with big benefits, big bonuses, perks (use of company plane), company cars, tuition reimbursement, etc., sometimes have less flexible salaries because the employer realizes that the job is going to provide lots of other compensation.

Financial situation of the employer, and industry trends.

• Profitable companies in growing industries are generally more likely to offer higher salaries so do your homework about the company and industry before trying to negotiate salary or benefits.

Salary Range

• In most situations, a recruiter (in house or headhunter) will tell candidates the general salary range before they come in to interview. In fact, I haven’t heard of too many cases where a candidate doesn’t have some idea of what the company can offer.

• It’s just a practical matter –- if your salary or experience level is way off the mark it would be a waste of time all around for you to interview.

Salary vs. Total Compensation

• When you are asked your salary you can discuss total compensation or actual salary. I used to work for a company that would send us a report each year that explained our total compensation package. That was the dollar value of our benefits, vacation, tuition reimbursement, bonus, and anything else we got from the company.
• Add up the total compensation you are getting from your current employer, and you can use that number in salary discussions, but be clear that you are discussing total compensation rather than salary numbers.

Due Diligence

• Before interviewing with a company find out everything you can about its compensation practices, benefits, perks, and performance expectations, so that you will know what to expect when you get a job offer.
• Also, if you have this type of information you will be able to figure out what is and is not negotiable at the company.

Never Lie About Your Salary

• All that an HR person has to do is call your current employer and ask them to confirm the salary number you gave them. If the number isn’t the same, then you look like a liar.
• I have also known some companies that require potential hires to bring in the previous year’s W2 form, and others that contract background checking services to check out potential hires. Again, if you lie about your salary you will probably forfeit the job.

Senior Executives/C-Level Executives

• If you are a very senior level executive, salary negotiations are much more flexible than if you are a junior player or even a mid-level manager. Most companies have a lot of flexibility in terms of salaries, bonuses, options, and other perks for senior level execs simply because the expectations for their jobs are so high.
• If you are a senior level executive you should probably contract an attorney and/or a retained search firm to negotiate your compensation package, contract, and severance agreement for you. Tell your attorney what you want and let him/her negotiate with the attorney for your potential employer. Top execs get incredible pay packages and perks, and they seldom do the negotiating themselves.

Middle Managers

• If you are applying to a large corporation as a middle manager, the salary they are planning to offer you is probably not terribly flexible.
• You may be able to negotiate a signing bonus, or get the company to pay back any relocation or tuition assistance you owe to your current employer.
• You may be able to negotiate extra stock options or stock grants as well.
• The key to getting those things is to convince the hiring manager that he/she can’t live without you.
• Be likable and showcase your accomplishments in the interview.
• When you are asked for your current salary or your salary expectations, give a range and find out about benefits and other perks that will factor into your total compensation package. Your new boss will probably want to pay you as much as he or she can but may be constrained by corporate policy or budget issues that you don’t know about.

Sales Jobs

• Great sales people can negotiate great compensation packages based on performance. Sales are one area where companies are willing to pay big bucks for top performers because they directly contribute to the bottom line.
• If you are a great sales person with an outstanding track record, bring some metrics with you to the negotiating table, so the potential employer can see exactly what they are getting for their investment in you.

Entry or Junior Level Jobs, or Non-Exempt Jobs

• If you are entry level or a fairly junior player without specialized skills and experience, you just don’t have a lot of room to negotiate.
• You may be able to get a higher salary if, say, you have to commute further to the new job or you need to buy a car to drive to the new job. If that is the case, mention it to the hiring manager and ask if they would consider additional compensation to cover your additional commuting costs. If that isn’t an option for them, perhaps you can negotiate a flexible work situation that includes telecommuting for part of the week.
• You may also be able to negotiate additional days off or tuition reimbursement.
• Many companies have a set dollar amount that they offer to junior employees – particularly those who join the company as a member of a training program or a class (i.e.: first year Big 4 auditors or consultants), and that number tends to be pretty rigid.

  Article courtesy of the Recruiting Blogswap, a content exchange service sponsored by CollegeRecruiter.com, a leading site for college students looking for internships and recent graduates searching for entry level jobs and other career opportunities.

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