Negotiating Your Salary: How To Make $1000 a Minute by Jack Chapman
"Poorly executed negotiations are thousands of dollars more valuable than no negotiations at all" (178)
Salary Negotiation Rules
Rule 1: Postpone Salary Talk Until There's an Offer
- reason 1: you might be screened out too early
- reason 2: they may use that info to make you a lowball offer
- reason 3: as people's desire for something grows, so does their flexibility and how much they can afford
- reason 4: you can get info during the interview about how much they need you and what it will cost them if they don't have you
Rule 2: Let Them Go First, Unless...
Rule 3: Repeat the number at the top of the range and be quiet
- Objectively Researched Value (ORV): market
- Individual Value (IV): subjective assessment
- Risk Factor (RF): compensation contingent on future success
- Benefits and perks
- --> OVR determines a range, and IV places you in that range
Rule 4: Reply with your ideal based on your research
Rule 5: Benefits and Perks
Chapter 1 - Million Dollar Blunders
- establish a virtuous cycle of career development: negotiate top salary, perform great, earn bonuses, get attention, repeat...
- the principle of quality: quality is remembered long after the price is forgotten
Chapter 2 - Aiming for What You're Worth
- What employer's think about:
- labor is intangible: there is no fixed price, but always a range
- salary relates to level of responsibility
- "universal hiring principle": make me a buck
Chapter 3 - Rule 1: When to Discuss Money
- budget bending: people make it work for things they really want
- employers ask for your previous salary to screen you
- Ways to postpone...:
- "Well I'm sure you have something budgeted for the position. What range did you have in mind?"
- "I'm sure we can come to a good salary agreement if I'm the right person."
- "Are you offering me the role?"
- "I'm paid very fairly for my responsibilities in my present role, and I would expect a fair salary with respect to my responsibilities here. Let's keep talking to see if I'm the best fit for the role."
- "Hell, it don't make no diff'rence what I was a-making' b'fore. It's what you're gonna pay me that counts, ain't it?"
- "Maybe you've noticed by now that it's a clear principle of mine never to discuss salary up front. If we're going to work together, we'll have to respect each other's principles, won't we? So let's see how I can help you make or save money."
- "I don't have to answer that do I?"
- "All I expect is a fair and competative offer with respect to this role."
- "I'm sure we can come to a good salary agreement when the time comes."
- "Don't worry about salary; I know I need to make you more than I cost. Let's make sure the fit is right."
- "Look, if salary if all you're worried about, there's no problem! When I've hired people myself, salary has been just the finishing touch to the person who can really play for the team. Let's talk about it when we're sure I'm the player you're after."
- "I don't want to appear difficult. I can understand that you want to make sure you can afford me, and I won't require a salary out of line with the job. But it is a principle of mine not to discuss salary yet, because it can throw us off track. What's really important is whether I'm right for the job and what I can produce for you."
- "Well, compensation is about number three on my priorities list right now. Number one is making sure we can work together, and I'd just as soon concentrate on that for now, if you don't mind."
- "I wouldn't want to say anything at this point that might scare you away, and I'm sure you don't want to say something that might discourage me, so if it's okay with you, I'd like to just keep an open mind on the subject for now."
- "Me mention a figure first? I have absolutely no upper limits. Now what did you have in mind?"
- If they get angry with you for dodging the question:
- "May I ask a question? Are you wondering if you can afford me or is there another consideration?"
- "I'm happy to talk in more detail about this when the time comes, but can you help me understand why we need to discuss that now?"
- Preemptive Strike: "By the way, I know it's too early to discuss compenstaion in detail, but I wonder if you can give me a rough idea of the range you were thinking for this position?"
Chapter 4 - Rule 2: Let Them Go First
- "who speaks first has the most to lose"
- let them go first unless:
- you are confident starting high won't jeopardize the offer
- you're certain you won't start off too low, and
- you are positive they're at the offer-making stage
- speaking first to "anchor" can result in a higher outcome for you, but this is the higher risk option
- have your ISN numbers ready:
- Ideal: the most you could hope for and then some
- Satisfactory: what's the going rate for someone as good as me?
- No-go: below this is a deal breaker
- If you go first:
- start with your ideal number, qualifying it by saying it is a target and not a demand
- include your rationale/research
Chapter 5 - Rule 3: Your First Response
- Repeat the figure at the top of the range and then be quiet.
- Let a look of concern cross your face.
- Count to thirty...
- Compare the offer with your research (ISN numbers)
- Let the interviewer be nervous, worried, or anxious
- Your silence, then their response, then you respond with the truth:
- Sounds great
- Sounds acceptable
- Sounds dissapointing
- They go first:
- Them: "Our offer is $ABC"
- You: "$ABC?" [hmmm; silence]
- Them: "We are flexible, what did you have in mind?"
- You: "May I share my IDEAL with you? Let's hold it as a target, not a demand. Here it is..."
- You go first:
- You: "May I share my IDEAL with you? Let's hold it as a target, not a demand. Here it is..."
- Them: "Gasp! Well, we were thinking of offering $XYZ."
- You: "$XYZ?" [hmmm; silence]
- Them: "Would you accept $DEF?"
- if you go into a negotitaion with a fuzzy no-go value, you risk waffling and talking yourself into a lower offer
Chapter 6 - Rule 4: Your Researched Response
- People think they will lose respect if they talk too much about money. That's true before an offer is made, but after the offer is made it can actually increase respect.
- If their offer is very high:
- double check to make sure you aren't in over your head
- If their offer is low, but not below your no-go:
- "$XXX. I appreciate your offer."
- "And I would love to work here."
- "And I'm sure you want to pay me a compensation that is fair and will keep me committed and producive, isn't that right?"
- "Well, from my research I estimate that positions like this for someone with my qualifications are paying between x and y. What can you do in that range?" (your range should be the high end of your research, so if you researched $75-80k, you say $80-85k)
- If they can't go higher, let them sweat a little: "I'm still very excited about the opportunity but need some time to think it over. Can we touch base tomorrow or Friday?"
- or, "Considering my xyz, I believe I'm worth $XYZ. What can you do in that area?"
- If their offer is too low, below your no-go:
- "Well, we seem far apart at the moment. I don't want to decline the offer because I sitll think the fit is good. Is this a firm offer?"
- "Ok, let's talk again soon [within 24 hrs]. I'll make you a promise: I'll consider the compensation to see if I can accept it; meanwhile you can take some time to see if there's anything we've overloked to make it better."
- "Then, if I can accept that offer, I'll say yes, and I'll mean yes. If I can't feel right about the deal, I'll say no, and suggest you look for another candidate who will fill the bill for you at that price."
- "How does that sound?"
- If their offer is just right:
- Unlikely it is just right, since the first offer you hear is commonly their lowest
- "Your figure matches my research exactly. I think that's a perfect starting point."
- "Since I expect to learn fast, work hard, and become very productive for you, I'd like to discuss scheduling a tentative raise to X in six months."
Chapter 7 - Rule 5: Benefits and Perks
- Salary reviews:
- Auto cost of living increases: "I expect that my salary will keep pace with inflation, so there will be a cost-of-living adjustment each year, won't there?"
- Six-month review
- Sales compensation
- Performance bonuses: "Let's consider setting up a special bonus to encourage excellent performance. Can you think of a workable one?"
- Cars and expense accounts
- Professional memberships
- Vacation and personal days
- Relocation expenses
- Signing bonus
- Time to think it over:
- "This sounds terrific! I think we've really got a solid match here. Would you jot this all down so we're clear? And I'll get back to you as soon as you need to know. When do you need to know?"
- "Yes! We're done! I can't wait to get started. I will need to look this over to make sure we haven't forgotten anything, so when do you want my final confirmation?"
- "Ok, I'm giving my tentative yes right now and I'll give you the permanent one as soon as you need to hear it. When would that be?" ... "Ok, I don't see anything left to talk about right now. I'll sleep on this, look at it again to make sure we haven't missed anything, and confirm it in writing by that date."
- Two or more offers:
- Try to extend: "This meets all my criteria for what I want and I have every indication that this is the correct match, but I want to consider this very carefully. I'd like two weeks to let this decision settle. Will that work with your schedule?"
- Accelerate the other offer: "I have another offer. The job is not better or worse, just different. Frankly, my preference is to take the one in which I can make the best contribution. How can we get things moving here to meet the deadline of the first offer?"
- consider a counter offer from your current employer just as you would two offers you have on the table and rank them against each other in the various categories
- Urgent employers
- feel it out, and leave some wiggle room: "I accept! There may be a detail or two in the compensation package we've overlooked, so if I think of anything I'll let you know in the next couple of days."
- When to get it in writing:
- "let's jot it down": always
Chapter 8 - Special Situations
- When discussing salary expectations outside job interviews, focus on a researched level of responsibility and the associated pay.
- With recruiters, avoid if possible and if not stress your researched expectations not your current salary and give a wide range.
- how to deal with salary on job applications
- never inflate your current salary:
- they will sense it and can find a way to verify
- good recruiters won't let past salary get in the way of evaluating what your salary should be
- negotiate in person or schedule a call so both are fully present
- never negotiate by email
Chapter 9 - Evaluating and Negotiating a Stock Options Package
Chapter 10 - Raises and Salary Reviews
- employers don't give raises, employees earn them
- document your results
- get your boss to acknowledge them
- negotiate a raise the same way you'd negotiate a salary
- "the wheel that squeaks the loudest gets the grease": don't assume your boss knows what a good job you've done keeping things running smoothly
- keep a job journal of:
- your achievements (quantifiable)
- the talents of your superiors, colleagues, subordinates, customers (know what your boss values so you can measure your results in language they will understand and appreciate)
- your ideas for progress
- news items about your industry/career
- use your journal to prepare a 1-page memo, which you deliver to your boss
Chapter 11 - You Go First Perspective
- you share first if salary talk won't screen you out and you think it will help the employer think bigger
- "Poorly executed negotiations are thousands of dollars more valuable than no negotiations at all" (178)
- Giving into their request for salary info:
- Lease effective: cave and tell them, but if you do this at least focus on expectations rather than history and use your well-researched range
- Moderately effective: just discuss market value
- Better still: "My salary expectations? They're simple: a fair market value. Perhaps you can help me there: what's the range you're thinking of?"
- Best: "Perhaps we can postpone salary discussions until we're sure this is a good fit?"
Chapter 12 - Practice and Coaching