Have you ever wondered what small, simple steps you can take to give your career…
How to Negotiate Your Compensation Package
If you’ve sought my help with your application materials in the course of your job search or have been following my previous posts, you’re probably aware that one of my mantras is “Write from the reader’s perspective.” The gist is that you’ll be more successful in capturing the attention of potential employers if you think outside your own perspective and focus on and address their needs first, by demonstrating fit and showing how your skills align with the role they want to fill. In fact, if you shift to an “It’s not about me” mindset throughout most of the job search and hiring process, you’re more likely to reach your audience and get the results you want.
A potential job offer, on the other hand, is a different story. This is the time where it’s completely appropriate to focus first on your needs (and the needs of your family) as you prepare for negotiations about salary—and other important factors, such as benefits, hours, and bonuses—with an employer. These negotiations can be tricky to navigate, but one thing is for certain: The time to assess and determine your financial needs and other related priorities is BEFORE you have a job offer in hand.
For this very reason, I strongly recommend that my clients defer answering questions about compensation until after they’ve done their research and reflection, so they can respond from an informed point of view. Your goal is to arrive at an offer that covers your needs—both financial and otherwise—but that means you need to be clear on what they are. Salary is likely the most important factor to many people, but it’s still only a part of the equation.
Negotiate Your Job Offer with Confidence
So, the big question is, how can you prepare yourself so you can negotiate with confidence when you do receive that job offer? Following is a three-step process that will help you narrow down what your priorities are and guide you in educating yourself on market conditions. That way, you’ll know where you’ll want to stand firm and where you can compromise. The saying “with knowledge comes power” is true in this regard. By being informed, you’ll be in a much better place to negotiate wisely.
Step #1: Determine Your Current Needs
You’re going to find it difficult to discuss salary if you can’t articulate your current needs and financial commitments. For this reason, create a budget if you haven’t done so already and determine how much money you need to cover your existing monthly expenses. If you aren’t sure how to do this, start Googling or contact a financial advisor to help get you started.
Next, create a second “budget” for other needs and wants, such as how much time off you’ve been accustomed to for both vacation and sick days (for yourself or to care for family) and how much you’re used to paying for healthcare. As a part of this exercise, also consider what makes you happy in the workplace. Be realistic. Is it being able to work remotely twice a week? Or is it working in a collaborative environment where you can thrive on interpersonal interaction with your peers? Think through each of these areas—and any others you find relevant—to determine what you need.
Step #2: Rank Your Priorities
After you’ve created your budget and thought about your needs, make another pass through and reflect more deeply on those needs. You’ll likely find that all of the things you listed were not needs. Rather, they may have just been things you were accustomed to or hoped for.
Think about things like paid time off, remote work, company culture, healthcare and retirement benefits, base salary, bonuses, etc. Carefully reflect on what is most important to you and determine the top two or three that are most important. Then, make the sometimes-difficult decision of selecting the ONE thing that is most important to you out of all of those things. If that one thing is not a part of an offer or the job, then you know right away it’s going to be something you’ll need to discuss during negotiations.
Step #3: Do Your Research
After doing the above internal reflection and assessment, next do your market research. Put websites like salary.com and Zillow (if you plan to relocate) to good use and do research to determine whether your expectations are realistic. For folks moving out of areas known for high costs of living, you might find that the area you want to move to pays, on average, 15% less—but also has home values 30% less than what you’re used to. The point is to take time to become informed about salaries for professionals with equivalent years of experience and levels of responsibility and to learn the housing market for buying and renting in the area you plan to live in.
Research has a compounding effect, too. Rather than merely being informed about market conditions, you will also likely feel more comfortable negotiating—especially if you’ve never negotiated before—because you’ll feel empowered by your knowledge. You might realize that an offer is ridiculously low or shockingly generous, and it will be clear if you’ll want to accept—or walk away.
Put It All Together
After you’ve gone through these three steps, you’ll have gained clarity on the top couple of areas where you might feel compelled to negotiate once you receive an offer. You’ll be in a much better place to do so because you’ll be informed and confident. And if you get an offer that exceeds all of your top needs and wants, you’ll feel even better about joining the organization!