Avoid These Mistakes In Negotiation Talks
CareerJournal.com spoke with David Moyer at Moyer, Sherwood
Associates Inc., a
Around clarity. About where they are and about where they want to
go. Often, they're not clear enough at the outset about what they're currently
making. They don't know what they earn and how they earn it. If you get a
salary of $80,000 or $90,000 a year plus a bonus, you have a pretty good idea
of what you make. But suppose you have a base salary of $250,000 and you're
entitled to a bonus of 30% to 40% of salary, plus you have stock options and
other benefits. If I stopped you on the street and asked you what you earn, you
probably wouldn't remember it all.
But as you get close to an offer, you need to know. There's
nothing worse than saying you're making, for example, a $220,000 base, a 45%
bonus and $5,000 in other perks a year and then a few days later remembering
you also get financial planning...and oh wait, there's free tuition for an
M.B.A., ...and oh, I forgot, a company car...and oh yes, there's one more thing,
a gym membership.
It doesn't look right. You're not being deceptive, you just forgot
one element of a complicated set of financial incentives. But it can still
strike the company as deceptive or that you're trying to nickel-and-dime them.
You need to get it all out on the table at the outset. So know the numbers and
the components that matter. That also means excluding the silly stuff. Free
parking is a huge benefit in midtown
Spend some quiet undistracted time getting to know the numbers.
Write it out, and sleep on it before sending it to the search consultant or the
company. That way, if you remember something additional the next day, you can
add it before it gets in front of the employer.
You also need to resolve 'the hypothetical' in advance. It used to
be that candidates considering new jobs would take their spouse out to dinner
after about the second interview, and they'd carefully consider what they would
do if the offer came through. Then they'd know, and they'd be ready to act.
Today, it's not unheard of for someone to go to the third interview, receive
and discuss the offer, dot every 'i' and cross every 't' and then reject it.
That's damaging to the candidate, embarrassing for the search person, painful
for the company and a waste of time for a lot of people.
No one will hold it against you if you drop out after first
interview, but if you keep going, you must get serious and decide what you want
to do. Are you really ready to enter a controversial industry, relocate to a
different city or work for a troubled company? If so, you should accept the
offer -- unless there's some big surprise to the package. If not, you withdraw
early on and no one gets miffed.
You should come up with three numbers, the bottom line, your
target and your 'wow' amount. The target is what you think it would be nice to
make, and the wow is your stretch number. Don't necessarily tell the recruiter
your bottom line, or the minimum you will take, but you need to know what it
is. If you pick up signals that the job will pay only $300,000, and you won't
move unless it's $325,000, you'll save a lot of time if you state that clearly.
You'll either get it, or you'll avoid wasting a lot of time in fruitless
interviews.
But if you're making $250,000 now, you should know if $300,000 is
what you'll take. Or maybe you really like the company or you're having
difficulties in your current job that make you willing to make a lateral move.
You need to know the 'no' number where you will walk away from the deal,
because you can't have an intelligent conversation otherwise.
Real salary negotiations -- as opposed to 'Here is our offer' --
don't happen until you get up there in the ranks. Unless you're senior level,
you don't get a lot of back and forth with an employer, so you really need to
be clear about what you want. We generally say that someone who's relatively
secure in a job, being actively recruited, but not changing their cost of
living because of a relocation should expect a 15% to 20% increase. So you can
work out the numbers. If you make $200,000 now, and $240,000 wouldn't make you
leave, you need to say that up front.
It's overreaching or when companies start seeing the candidate as
too grasping, which is different from being too greedy. I recall a candidate
who kept talking about his financial adviser and ran every little detail past
him during the negotiation. It's one thing to say, 'I need to talk to my
spouse' -- or 'my accountant.' But he kept going on about it in a way that was
inappropriate for this level job. At some point, you have to say, 'I'm being
offered a lot of dough, so I'm willing to pay for the draperies myself.' You
aren't going to spell everything out.
Be open and forthright early enough in the game to set the stage
for what you want. If you're working with a search consultant, go over your
compensation numbers with him or her, and they'll do the same with the client.
That's a good system for you, because you'll appear to be above the fray and
focusing on the company's challenges.
Then find out if the company can pay what you need to move [to the
new job], and how they are paying it. If the package is over six figures, most
likely you will be comparing apples with oranges, because nothing will match up
perfectly. You might get fewer stock options, but a bigger outright grant; you
may not get the financial-planning assistance you have now, but maybe you'll
receive a company car.
-- Ms. Capell is a senior correspondent for
CareerJournal.com. She can be reached at frances.capell@dowjones.com
Article from CareerJournal Today –
February 2005