Negotiating Your Job Offer

Now that you have a job offer (hang in there, your day will come) do you just say “Whoopeee” take your family out to dinner and accept the offer as is, or do you negotiate?  Some things to consider. I’m sure others can do a better job discussing the “art of negotiation” than I can and there are many books available on the subject.  Short of writing such a book, I’d like to let you know some points involved in the hiring process that you may not have considered.

The job hiring process

The hiring process is long and painful for both the company and the candidate.  The company goes to great length to assure they get a good employee.  The candidate goes to great length to demonstrate why he or she is the perfect choice to fill the role.  Both sides expend a great deal of time and energy in the process.  From the company side this usually involves people such as the hiring manager, his or her boss, a staffing administrator from HR, many times peers of the open position as well as others inside the company that the person will work with.  If the position is a management role, interviews also may include several folks that will be supervised by this position.  It’s not unusual for a company to have 6 to 12 people involved in the hiring and decision making process.  That’s a lot of people and if you add up their time spent reviewing resumes, talking to agents, having several rounds of interviews, interview follow up meetings, filling out candidate evaluation forms and final selection meetings it can really add up.  Multiply that over several candidates and you’re looking at a fairly large hunk of time expended, and time is money.

Companies rarely fall back to #2

However, once all is said and done, the company will narrow the field of candidates down to a winner and maybe a 2^nd and 3^rd choice for runner up.  Here’s the part you may not be aware of.  Statistics show that if the first choice candidate does not wind up being hired, the company usually does not extend an offer to the 2^nd or 3^rd ranked candidate.  Given all the time and effort put into these candidates, that’s amazing. Why do you suppose this is?  Here’s how it goes.  By labeling candidate “A” the winner, candidates “B”, and “C” by default become the losers.  Who in a company is going to suggest to hire a “loser”.  Secondly, in the candidate comparison process each person is pushing the candidate they prefer.  To do that they make a big deal of the merits of the one they like and the short comings of the others.  At some point, a decision is made and the rational for the decision is a combination of the positive attributes of the winner along with the negative attributes of the others.  So, when candidate “A” doesn’t accept the offer, what’s remembered about candidates “B” and “C” are the negatives, not the positives.

As #1 candidate you are in a good bargaining position

If you are candidate “A”, this puts you in a good bargaining position.  Several managers have gone out on a limb telling everyone how wonderful you are.  They don’t want to look bad by your not wanting to join the team.  They have their heart set on you and they want to show you they are cooperative, nice, treat people well and are easy to work with.  They also know if they don’t land you, they will most likely have to start all over again with a new set of candidates and that’s the last thing they want to do.  Add up all these factors and you discover you have room to negotiate.

What can you negotiate for in the hiring process?

This is your opportunity to sweeten the offer.  However, this is not the time to shoot for the moon.  Think about the things that you can reasonably expect to get and focus on those.  Don’t throw in things that are not going to happen.  Here are some reasonable things to think about which you may actually be able to get:

• Sometimes you can get a larger starting salary. In most larger companies, when a job requisition is opened there is a pre-approved amount of salary they can offer without having to get additional approvals.  This is referred to as the “Budgetary Amount” or “Approved Cap”.  In the first offer, many companies expect some negotiation so offer 5-10% less than this amount.  That is your wiggle room.  If you ask, sometimes they will tell you what the “cap” is, many times they won’t.  If you stay under the cap, you can many times get more.  Going over this “cap” though is quite difficult since it will require an entire new round of approvals within the company which they usually are not prepared to do.
• Sign on bonus: This is a very negotiable item – especially if there is no agency fee.  In fact, many times if you ask for more salary, they counter with adding or increasing the sign on bonus.  Depending on the state of the economy, how long they’ve been looking for the right candidate and how desperate they are to fill the role, sign on bonuses go in and out of favor.  Sometimes you can leverage what you’re losing in leaving your current company (assuming you have one).  For example, perhaps you’re expecting an annual bonus in 2 months that you will lose if you leave before then.  Or, if you wait to be laid off you get some severance package that you don’t get if you resign.  Perhaps some stock options are going to vest in a few months.  Use this information as leverage points in asking for a sign on bonus.
• Annual bonus: Many companies have several bonus plans.  Usually with the higher level people pulling down plans with higher potential payout.  If a bonus plan is not in your offer package ask about it.  If one is in the offer, see if you can bump it up, say from the 10% plan to the 15% plan.
• Time off: If true, let them know you have a vacation already planned in the near future and, you won’t have enough PTO accrued to cover it, and you don’t want to start out in the new company by going negative on vacation.  Sometimes you can get them to give you the time off with pay without it coming out of your PTO balance.  Speaking of PTO, in smaller companies with less rigid standards, sometimes you can get more vacation days a year than they originally offer – not as likely but worth a shot.  Ask HR about official comp time policies and if, as in many cases, the company does not allow such, talk to your new boss about “wink-and-nod” comp time arrangements between the two of you.

Here are some other things to consider….

• Flex time
• Work from home options
• Company paid cell phone
• A better sounding job title (remember this title may wind up on your resume next time you’re out looking for a job)
• Subsidy for day care or elder care
• Gym membership

It’s up to you to either take advantage of an opportunity to negotiate or let it slip by.  Remember”  “IF YOU DON’T SHOOT YOU CAN’T SCORE”

Categories: Negotiation, Job Search Help, Strategies for Unemployed, Things You Need to Know