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Tips for a Successful Salary Negotiation

Salary Negotiation Parameters and Tips
By Susan M. Heathfield,

You have a job offer in hand. How much leeway do you have to negotiate salary and other conditions of employment? The answer ranges from not much to a lot. One key factor is the discussion of salary, benefits, and working conditions that occurred during the interview process.

You have likely shared your current or most recent salary with the potential employer; the potential employer may have shared the salary range for the position with you. The posted job ads may also have given you an idea about the salary range. Don’t count on this, however, since employers don’t want to lay their cards on the table first. After all, what candidate wants to be offered and accept a position in the low to mid-range of a stated salary range?
Salary Negotiation From the Employer’s Point of View

Consequently, the employer’s salary negotiation leeway depends on these factors:

    * the level of the job within your organization,
    * the scarcity of the skills and experience needed for the job in the job market,
    * the career progress and experience of the individual selected,
    * the fair market value for the job you are filling
    * the salary range for the job within your organization
    * the salary range for the job within your geographic area,
    * the existing economic conditions within your job market,
    * the existing economic conditions within your industry, and
    * company-specific factors that might affect the given salary such as comparative jobs, your culture, your pay philosophy, and your promotion practices.

Bottom line? How badly do you want and need this candidate? If you are too needy, your negotiation strategy will quickly turn into a capitulation. And, capitulation, paying more than you can afford, paying disproportionately to the pay ranges of your current employees, and paying a new employee salary and benefits outside of your comfort zone is bad for the employer and bad for the candidate.

The new employee’s work is scrutinized under a microscope; employer expectations may be way too high. Fellow employees may resent the negotiated salary and think of the new employee as a prima donna. In a win-win salary negotiation, both employer and employee leave the negotiation feeling ready to get started on a long term, successful relationship.

If you’ve ever been involved in an intense salary negotiation, you know that the negotiation can consume your mental and physical energy way beyond its importance. This is because, by the time you reach the stage of making an offer, you have spent the time to develop a pool of candidates. You have interviewed various candidates for weeks.

Your organization has invested significant time and energy in wooing and getting to know your final choice candidate. More sophisticated candidates, higher level candidates, and candidates with significant career progress will counter your initial offer letter1, so expect it.

Additionally, expectations and needs of candidates can sometimes blind side the employer. If multiple people have conducted interviews – which I recommend – you have little control over the expectations expressed and what the candidate comes to believe about the position as a result of the interviews. You also have no control over the content of offers from other firms that can occur simultaneously.
Salary Negotiation Tips

While they are not meant to comprehensively detail how to conduct a salary negotiation, I offer you these hints and tips to ensure you conduct successful salary negotiations.

    * Negotiation is not about winning – unless both parties win. If either party feels they have capitulated, not negotiated, both parties lose.

    * Make every effort to identify the most recent salary and benefits your candidate received. Most organizations ask for salary on their job applications and in their job postings and ads. Some candidates offer W-2 forms and other proof of salary. You can also ask former employers during reference checking. You may not be able to match the salary but you will have a good idea of what the candidate will seek during salary negotiations.


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