How to Negotiate Salary Like a Pro

Posted by: William W. (Woody) Williams

A recent discussion on LinkedIn -- in the "Answers" area -- prompted some thought on our part and a response that was tagged as "Best Answer" to the question.

The question: "You are about to receive a job offer – how do YOU negotiate salary…?"

Posted by Dennis Abenanty, founder of KareerKit in preparation for an upcoming article on salary negotiation.

That article is now published on KareerKit and well worth a read -- nice format, easy to assimilate, great advice.

Here are our negotiation points, reformatted from the LinkedIn answer.

Negotiating for permanent, direct-hire positions is a bit different than for contract or contract-to-hire. In either case, an approach based on "total compensation" is generally better thinking than relying on salary alone. Not that salary isn't important; total compensation is simply better.

A caveat: When looking at "benefits" and "total compensation," don't give too much -- or any weight to benefits requiring three years or more tenure to achieve. At least not in the initial negotiation / calculation. Most of us change jobs so frequently and companies change hands or policies so frequently that getting to "five weeks paid vacation" after six years is not something we're likely to actually see.

Before we go into what's on the table for total compensation, a brief comment on "value."

One thing every job seeker should know and understand is their "value proposition." Many of us make the mistake of simply listing education and experience on our resumes without making the jump to defining ourselves in terms of value to the business. This puts us at an extreme disadvantage in any negotiation.

Our value proposition must be a part of our resume (perhaps the most important part), our "elevator pitch," our interview checklist, and the basis for our negotiation. That value proposition must be quantifiable and verifiable. For more on that, Google "value proposition" and "resume." Mine is here or here for comparison.

What's on the table in terms of total compensation?

A few total compensation items from our personal short list.

Base Rate

• The salary component of the equation
  

Alternative Compensation

• Signing bonus
• Performance bonus
• Stock options
• Profit sharing
• Other annual bonus
  

Benefits:

• Disability Insurance
• Dental/Vision Coverage
• Health insurance
• Paid time off ( Sick leave, Personal, Holidays, Vacation, Maternity / Family Leave)
• Flex Time and/or Alternative Schedules
• Work from Home
• 401K matching

Other:

• Education (stipends, paid, or time allowed)
• Training: (In-house provided @ no cost; Outside allowed and/or reimbursed)
• Company equipment: (cell phone, laptop, blackberry, transportation, use of corporate facilities, and the like)
• Relocation expenses
• Personal travel assistance

This is a fairly comprehensive list but not all-inclusive.

If the position is contract or contract-to-hire, another option is to take some of the hourly rate as per diem. For the employer, per diem is not "wages" -- ditto for the employee. In other words, a better tax situation for all.

Some of us are genuine "Type A" negotiators -- extroverts who love to compete. Others are less so and not as comfortable in the negotiating chair.

If we are in the second category, we may need help... professional assistance. Training and counseling is available to develop or hone our skills. Toastmasters International is one excellent example venue to train and hone those skills. Professional recruiters, agencies, and "head hunters" can do some of that for us as well. Those of us who simply can't bear the stress of negotiation or who are admittedly ineffective at it should seek assistance.

There are other requirements in the build-up to successful negotiation -- more than just a laundry list of total compensation items.

• We must research potential employers -- know them well, talk with employees and ex-employees, research the company financials... and especially know their compensation history and reputation.
  
• We must research and understanding the current market -- know what we are worth in terms of median salaries in the area and comparable positions.
  
• We need our (quantifiable, verifiable) value proposition down pat.
  
• If we are not comfortable as a negotiator, we should get assistance from professionals as needed.

Now add the items under total compensation and we can negotiate like a pro.

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