VideoWhen the economy is strong, job seekers feel not only that they can negotiate, but that it would be foolish not to. When the economy is weak, however, many candidates wrongly feel that they have to accept what's offered or risk losing the offer. Whatever the economic climate, what matters is how you negotiate. Although you may not get everything you want, you won't lose a job offer because of what you ask for. However, offers are frequently withdrawn because of the way someone asks for something. Whether the job market is good or bad, there are always opportunities to negotiate a better compensation package, but only if you understand how.
There are 11 basic commandments to help you negotiate the best possible deal in any economic climate when changing jobs, whether internally or with a new company. They are:
1. Be prepared. The more information you have about your market value and the prospective employer, the greater your likelihood of success. This is the first commandment because it's the most important. There's a wealth of information available on the Internet, at the public library and through professional associations and networking groups. Time spent learning how to negotiate and preparing for negotiations may be the best investment you'll ever make.
2. Recognize that employment negotiations are different. When the negotiations are over, you'll have to work with the person with whom you're negotiating. Moreover, your future success may depend on that person. So, while you want to negotiate the best possible deal, you need to do so in a way that doesn't damage your image. At the same time, the employer's primary concern isn't negotiating the least expensive compensation package it can get away with. Rather, the company's focus will be on getting you to accept the job. Even in a weak economy, a prospective employer wants you to feel good about taking the position.
3. Understand your needs and those of the employer. To be successful in this type of negotiation, you need to examine your priorities. What do you really want? For example, are you comfortable with a low salary and a large equity stake? Are you able to handle dramatic swings in income from year to year? Understanding your needs also will help you determine the type of company you want to work for. For example, a family-owned company may be able to offer a competitive salary and a large bonus based on results, but may not be willing to offer significant equity to a nonfamily member. A start-up company, on the other hand, may not be able to offer a market-rate salary, but will typically offer stock options. By recognizing what an employer can do, you'll be able to determine what issues you should press.
4. Understand the dynamics of the particular negotiations. Sometimes you'll have skills that are in great demand. And sometimes, you may be one of several qualified candidates the company would be happy to hire. Sizing up the situation and understanding the relative position of each party will help you determine when to press your advantage and when to back off. Knowing when to ask is often critical to getting what you want.
5. Never lie, but use the truth to your advantage. It isn't only wrong to lie, but in employment negotiations, it's ineffective. If you lie during negotiations, sooner or later you're likely to be caught. Once you are, even if you don't lose the offer, you'll be at a tremendous disadvantage, and your credibility will always be suspect. On the other hand, total candor won't be rewarded. You're under no obligation to blurt out everything you know. You can determine what you want to say and how you want to say it, and try to put everything in its most positive light. One key element of preparing should be to recognize areas of concern so you can rehearse how to handle them when they inevitably come up.
6. Understand the role fairness plays in the process. The guiding principle for most employers when negotiating is fairness. Within the constraints of their budget and organizational structure, employers usually will agree to anything that's fair and reasonable to hire someone they want. Appeals to fairness are your most powerful weapon. Thus, you should be able to justify every request you make in terms of fairness. For example, if salespeople in other companies in your industry are typically being given expense accounts, you can expect to receive one as well. Your prospective employer will want you to accept its offer and feel that you've been treated fairly. Understanding the importance of fairness as a negotiating principle can make the difference between success and failure.
7. Use uncertainty to your advantage. The more information you convey to a potential employer about your bottom line, the more likely it will limit what you get. Before making an offer, a company typically tries to learn what it will take for you to accept the position. With that information, the prospective employer will be able to determine the minimum package it needs to offer. An employer may not offer you as little as it can get away with. However, if you've divulged too much information, your offer will likely be smaller than it would have been otherwise. By not disclosing your exact current compensation or what it would take to get you to leave your job, you'll force a potential employer to make its best offer. When dealing with recruiters, however, you may have to provide salary information. If you do, though, it's important to present that information in the most advantageous way.
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