Getting a job, is a job in itself. There’s so much information on how to write a resume and cover letter, how to ace the interview and what the most appropriate thank you note is. But what do you do once you receive your offer? If you think the work is over, think again! Salary and benefits negotiation can be one of the trickiest parts of the job application process. If you find yourself unprepared in how to negotiate, follow these 5 tips to leave with a win-win negotiation.
- Do Your Research: Sometimes the most successful negotiator is the one who is the most prepared. Spend your time prior to the negotiation doing research on the company, the market and most importantly, yourself! “Review your resume to assess experiences in which you developed and utilized skills that are related to performing successfully in the prospective job. Prepare to discuss your skills and their value to the organization” (Tim Luzader, CCO Handbook). Every offer you make is going to need facts to support it and your skills/experiences can do just that. To find information on what past Boilermakers have made, check out our First Destination Data.
- Assess your BATNA & Bargaining Range: Your BATNA is your Best Alternative To A Negotiated Agreement and it is very important (Thompson, pg. 43). The strength of your BATNA allows you to either come into the negotiation with a strong or weak stance. When figuring out your BATNA, think about what would be the best outcome if you walked away from the current negotiation. For example, if you have another offer for $52,000 then that’s your BATNA and you will want to aim higher to get better than that. This brings us to bargaining range. Your bargaining range lies between your target point and reservation point. This is where you and a hiring manager will negotiate. The target point in salary negotiation is what your ideal salary would be, so don’t lowball it! You will never receive higher than your initial offer or your target point so make sure you aim reasonably high. On the flip side, your reservation point is the point where you feel uncomfortable going any lower. Using the earlier example, maybe the job offering $52,000 is in a more ideal location. So you would need at least $56,000 to entice you enough to go somewhere else. That $56,000 is now your reservation point. When considering your BATNA and bargaining range, think about theirs as well. If you can get a general understanding of what their BATNA and bargaining range is, then you can be more confident and prepared in your negotiation.
- Be prepared to Counter: It’s a common misconception that if you counter your first offer, your hiring manager will be offended. It is not offensive to reasonably counter their first offer. In fact, most hiring managers expect you to counter. If you are unsure what a reasonable counter is, ask where you are at in a pay band. A pay band is a way most companies assess how much to pay an employee by placing them in a salary range (Thompson, 52). If you are on the lower side of the pay band, then you know you can counter higher, than if you were on the higher side of the pay band. If a hiring manager is unwilling to move you up the pay band, simply ask what experience or training you could do before your start date to allow you to move up.
- Expand the Pie if Necessary: “Expanding the pie” is a term negotiators use to basically say, bringing in more options to negotiate. In job negotiation there are lots of ways to expand the pie. Some include, vacation days, 401k plans, tuition reimbursement, relocation fees, bonuses, and stock options (Professor Chupp). It is difficult for both parties to walk away from a negotiation happy if only one issue is being negotiated. So if you find that your hiring manager is unable to provide a salary that’s higher than your reservation point, see if you can expand the pie and get them to offer better benefits to make up for that.
- Know When to Walk Away: Walking away from a negotiation can be very difficult and disheartening for both parties. However, sometimes it’s necessary. Normally it’s never a good idea to reveal your BATNA but if you are unable to reach an agreement, telling the hiring manager that you already have an offer for $52,000 could give them enough incentive to offer you a little more. However if a hiring manager can’t offer you more than your BATNA, and expanding the pie didn’t help either, then it’s time to walk away.
For more information on salary negotiation, check out these articles from Monster and Harvard Business Review. If you still have questions or concerns, come by the CCO in YOUNG 132 from 10:00AM to 4:00PM for a drop-in.
Luzader, Tim. Career Planning Handbook. Geneva: College Recruitment Media, 60134. Print.
Thompson, Leigh L. The Mind and Heart of the Negotiator. Upper Saddle River, NJ: Pearson/Prentice Hall, 2005. Print.