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Show Me The Money!!
When the interviewing process is coming to an end, itís time to deal with the burning question, framed from both your perspective and that of the employer. You are thinking, ďHow much can I get here?Ē and the employer is thinking, ďHow much is this person going to cost me?Ē
Here are some principles to guide you:
∑ Donít discuss salary until
(A) You know exactly what the job requires
(B) They have decided they want you , and
(C) You have decided you want them
∑ The responsibilities of the job determine the salary, not
(A) Your Education
(B) Your experience
(C) Your previous salary
∑ To win at the salary negotiation, donít be the first one to bring it up
(A) Show genuine interest in what the job requires
(B) Donít ask about benefits, vacations, perks, until you know you want the job
(C) If they ask too early what you need, simply respond, ďLetís talk a little more about the position to see if thereís a match
∑ Recognize many things can fall under the title of compensation
(A) A company car (preferably a BMW)
(B) A country club or YMCA membership
(C) Free life insurance
(D) Medical Plan
(E) Dental and Vision Plan
(F) Profit Sharing
(G) Company Stock
(H) An expense account
(I) Tuition Reimbursement
(J) Additional Time Off
(K) Relocation Expenses
(L) Your own lap-top computer
(M) Your own secretary
(N) A free parking space
(O) Unlimited M & Ms
(P) A sign-on bonus
(Q) Weekly massages
(R) Two weeks in the company condo in Hawaii
(S) A Rolex watch after 90 days
(T) Free Life Insurance
(U) A production bonus upon completion of a project
(V) Educational opportunities for your children
(W) Cell Phone for business and personal use
(X) 401K contributions
(Y) A low interest loan for home purchase
(Z) Seminar attendance
You get the idea. Make this a fun process. I realize that negotiating anything is not very comfortable for some of you. If you donít enjoy going to Tijuana and bargaining for the turquoise necklace you want, you may be somewhat intimidated by this process. But realize that negotiating salary is not a confrontational process and certainly not a win/lose proposition.
Look at this scenario with me. Letís say Bob goes out to buy a car. He looks at the Ford Focus and decides this is what he wants. Itís a basic model with no extras but seems to be a good buy on a dependable car to get him back and forth to school. Once he decides on the car here are two possibilities:
1. An inexperienced salesperson will breathe a sigh of relief and lead Bob into the Finance and Insurance office before he changes his mind. He will take his little commission and go on to the next buyer.
2. Here is what a mature, experienced salesperson would do. He would continue talking to Bob. He would ask if he has a favorite kind of music. Of course he does. Wouldnít it be nice to have a great sound system in this car? With spring just around the corner, you know how much you would enjoy a sunroof? Since you are in school, it will be very important to make this car last for a long time. It would be advisable to have fabric protection, undercoating, and rust proofing installed. For those long trips back home to family, wouldnít it be nice to have cruise control? And so on. Ultimately, Bob walks out, a happy customer, but with a payment $100 a month more than he had originally planned. Has he been tricked? Of course not. He has simply been shown the benefits of some things he really did want. Once the initial decision has been made, you can discuss freely with little fear of changing the basic decision that they want you!
What are you doing in the salary negotiating process? Keep in mind, if you have handled the interview as described, salary did not come up until you decided you wanted them, and more importantly, they have decided they want you. At that point, and not until that point, you are in a position to negotiate. Also, keep in mind that if you have done an effective job search, you should be talking with more than one company anyway.
At this point, you should be prepared. You should know what comparable salaries are for this position. (Check Internet Salary Sites listed in the Appendix of "48 Days To The Work You Love". www.48Days.com) That and the responsibilities of the position determine what your compensation should be. A couple of years ago, I worked with a young lady who had been fired from a position making $19,000/year in a clerical position. She decided thatís not what she wanted to do anyway, and began to get focused on what she did want. It was somewhat of a redirection, but she was enthusiastic and confident. After having done an excellent job search, she began interviewing for positions in graphic design and marketing. She interviewed for a position advertised at $32,500. She came out of that interview with a salary package of $54,000. The company does not know to this day that in her last job she was making $19,000 nor do they need to know. That has nothing to do with what she is being paid now. She relayed the benefits of what she had to offer and was compensated based on the value of that. Always focus on the job you are going to, not where you are coming from. There is no law that says your pay will increase by only 4% a year or even 10%. The world is a very giving place, and if you can convey the benefits, the world will give you what you are worth. We have had many clients who have increased dramatically because they learned to focus on what they were going to rather than looking at what they just came from.
Also, recognize that your NEEDS are not the determinant of how you are paid. If you go to apply at Taco Bell, it is irrelevant if you have a $1200/month house payment, and a $450/month car note, they are not going to pay you $40,000/year. Your needs are not their concern. I recently had a young lady come into my office in distress. She had gone in to her boss that morning and explained that she had just moved into a nicer apartment, purchased a new car, and could no longer manage on what they were paying her. They fired her on the spot. And I laughed when she told me this story. I totally agreed with the company. What she did to obligate herself to higher payments had nothing to do with how she should be paid.
Be sure you know your value and then market yourself in that range. In my experience, I find that people often give themselves about a $10,000 window from which to work. If they have been making $30,000, they will look at positions that pay about $25,000 to $35,000. But if they see a perfectly matched position paying $65,000, they donít bother to apply. Be careful of setting your own limitations. You will end up pretty much where you expect to end up.
Keep these principles in mind:
1. You must make the company money. As a rule of thumb, you must make the company three to five times your salary for hiring you to make sense.
2. Your compensation almost always relates to your level of responsibility. If itís easy to replace you, you arenít worth a whole lot.
3. Your work is an intangible. Few salaries are written in concrete. Companies that budget $38,000 for a position will start out trying to hire someone for $31,000. Recognize their first offer is probably not what they have in the budget.
4. Once you agree on a package, get it in writing. If you have been creative in this process, it is necessary to write out what you verbally agreed on. Donít have to defend later what you thought was said.
Have fun in the process. Donít say Yes until everything matches your goals. In times of low unemployment, you are in the driverís seat.
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