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How to Negotiate Salary

Philadelphia, Pa.: Should I mention personal reasons for needing a higher salary (being primary breadwinner in my family for example) or should it only be based on my arguments as to why I’m a valuable employee who merits a higher salary?

Ron Krannich: Always avoid personal reasons when discussing salary. Focus on what the employer is looking for -- how you will add value to the company/organization. Once you personalize this issue, you no longer focus on your value to the employer -- only your needs. Employers are not looking for needy, which also may mean greedy, employees. Avoid being self-centered throughout the job interview and salary negotiations. Focus on the needs of the employer, i.e., be other-centered.

Working on a visa: Hello, I require visa sponsorship from the employer in order to be hired into a job. How do I factor my need for this visa with salary negotiations? Depending on the employer, the visa paperwork costs them $0-$1500, depending on whether they or I pay for the costs. Please keep in mind that many employers are reluctant to sponsor visas, so I am afraid that if I try to negotiate a higher salary I may lose out on the job altogether.

Ron Krannich: I would simply raise the question -- “Do you ever provide assistance with visas?” Find out what the employer normally does or is willing to do without complicating the overall job offer/salary negotiations.

Arlington, Va.: I am coming up on my annual review but don’t know how to ask for a raise. I’ve been told my position doesn’t usually get raises, that it’s more of a step in the door to be promoted after a year; however, there are no promotions available now with job cuts. I also know that I am being paid the minimum on the pay scale for my position and others doing the same job as me are being paid more and I believe I am a better worker. How should I bring this up and what do I say or should I not mention it and be thankful I have a secure job?

Ron Krannich: It’s very important that you document your performance and know what others are making in comparable positions. You may, for example, find that your job has expanded beyond its initial description, thus justifying this discussion. Make an appointment to see your boss to discuss this issue. I go into great detail on how to handle such a meeting as well as the specific discussion in my book “Get a Raise in 7 Days.”

Fairfax, Va.: I am an executive director of a small business and I am interested in negotiating a bonus structure into my salary based on performance of the company. What are your recommendations for the structure of a bonus program? Is one pitch better than another?

Ron Krannich: I would raise the question about a bonus structure or incentivized pay. Find out how the company normally handles this issue and then negotiate accordingly. In other words, like salary issues in general, get the company to talk about this issue first and then work your way through it in a professional manner focused on their bottom line.

New York, N.Y.: How do you go about asking for more money in this environment, when you see ads that offer more for what your doing?

Ron Krannich: In any environment, you need to justify your compensation requirements. You do this by looking at salary comparables in your area and communicating your strengths to employers -- how you will contribute to the bottom line or improve performance. If you can justify your compensation requirements, employers should listen. They want to hire people who will make a difference to their operations. And many know they get what they pay for!

Rockville, Md.: How can I negotiate for more salary when I know company’s range is higher than what they are offering me? Thanks

Ron Krannich: Always focus on the “range” -- put the top of your range into the middle of their “range.” For example, if you know their range is $60,000 - $70,000 and they are trying to offer $45,000 to $55,000, counter by saying “I was thinking more in the range of $60,000 to $67,000. Is that possible here as XYZ company?” Many things are possible! If you’re really as good as you say and they want you, chances are a few thousand dollars difference will not be worth continuing the recruitment process. Also, be prepared to justify your range -- you’ve done your research and know what others are being paid for comparable positions in OTHER organizations.

Suva, Fiji : Recently the University administrators have proposed a 5 percent pay cut for senior academic and staff in FY 2009, escrowed until the budget is balanced in 2011. Apart from the legality of the contractual obligation; which is the best approach to take when trying to justify why one cannot afford a pay cut, even if you want to cooperate for the betterment of all in the communal “Pacific Way”?

Ron Krannich: Since you’re in a university environment working with public money, you may not have much room to negotiate. However, I would get together with other senior academic and staff and present an organized group approach to this issue. But if academic politics in Fiji are like academic politics in the U.S., you’re talking about “high competition for low stakes!” Are there any benefits you could negotiate, such as extra time to generate more income on other jobs, they might work in this environment? Often employers can give time, which translates into money for many people. Good luck.

Annandale, Va.: I’m guessing part of the negotiation process is knowing how much someone with a similar skill set and experience level to yourself earns. I am an electronics engineer with 15 years experience working with the federal government (DoD). My intutition tells me (and I have no way to verify this) that my private sector counter part earns about 10-15K+ more a year. Question: How do I find out how much a “typical” electronics engineer with 15 years experience in a certain specialization area earns? Should I use this figure as a ball park negotiating starting point with an employer? Thank you.

Ron Krannich: There are many online and print resources you can consult for this information. I would start with www.salary.com and several other compensation websites. At the same time, you need to focus on salary comparables in your geographic location. Call your local library and ask the information desk if they have recent salary statistics for your occupation. Some of the data may be 2-3 years old, but you’ll get some useful data from their state and local salary surveys. Also, check with professional associations, which usually keep such information. But your best source of information will be from talking to people in your area. Don’t ask them what they make. Rather, tell them you are doing a salary survey and was interested in learning what most electronics engineers in your area make (include both salary and benefits, since benefits may constitute up to 40% of some compensation packages. If you only focus on base salary, you may get a distorted picture of true compensation for your occupation).

Lancaster, Pa.: Any advice for someone who’s trying to negotiate a slight salary increase plus a switch to a part-time telecommute? There is a precedence for telecommuting in the company already, but I’m unsure how to approach both of these issues in my upcoming annual review.

Ron Krannich: Most salaries and benefits are negotiable to a point as long as you can justify your increase/job change on professional grounds. Document your performance and focus on salary comparables with other companies. In other words, do your research and present a good case for both the salary increase and part-time telecommute. Avoid any self-centered talk about your personal needs.

Washington D.C.: Is it best to request a specific salary first or to ask the potential employer to provide their salary offer first? A potential employer has not provided an offer yet but is asking for my salary request.

Ron Krannich: It’s the old poker hand principle -- he who reveals his hand first looses the advantage! Always get the employer to volunteer salary information. You can do this by delaying the salary question until the end, which makes perfect sense. If, for example, the potential employer wants to know your salary requirements early in the interview, respond by saying this: “Could we talk about this later? I really need to know more about the position before I can discuss compensation.” If the employer persists, then turn the question around by asking this question: “What do you normally pay for someone with my qualifications?” Always get the employer to volunteer this information so you know where to begin and end your salary RANGE. This is one of the biggest errors job seekers make -- prematurely volunteer salary information. Once you do that, you’ll be at a disadvantage.

Washington D.C.: My organization is in a hiring freeze, like many others, I assume. This means I’m doing way more work than my job description includes. Do you think my chances of getting a raise are good? Should I bring up the fact that if I were to leave, they would not be able to fill my position due to the freeze?

Ron Krannich: You’re being a good team player in this environment. However, you also should be rewarded for your efforts. At this point, begin documenting everything you’re doing so that you can build a good case for a raise. Wait a couple of months and meet with your boss about the changing nature of your job and compensation. If the job changes enough, you make grounds for asking for a promotion to a new job, which is the one you are now doing. Try to become as indispensable as possible in these tough times. Your efforts will be rewarded, but only if you do the proper documentation (include dates, jobs, performance/results)and discuss this matter in a professional manner. Timing, of course, is important. Avoid any threats about leaving -- if you’re really valuable to them, they will know it and compensate you accordingly. Unfortunately, many jobs have a tendency to expand without additional compensation. That’s why many employees need to occasionally revisit their job description with documentation and negotiations.

The other side, Va.: Any advice for a middle manager that has to tell a “good” but not “great” young employee that they will not be getting the raise they expect. I find that recent graduates significantly overvalue their self-worth. To the point where I find 23-year-old engineers asking for as much money as most 33-year-old employees make, on average. Is this a failure of our institutions of higher education? Shouldn’t they be providing this view of “reality?”

Ron Krannich: Yes, many such employees have unrealistic salary expectations. And part of this problem relates to the fact that they engage in “wishful thinking” rather than face the facts about compensation -- not knowing what they are really worth in the job market. You could explain to them how your organization determines compensation, which is probably similar to other organzations -- you do salary research and adjust your packages according to the “going rate” for comparable organizations. Their expectations need to confront reality. If not, they may become unhappy employees because of their wishful thinking mixed with need and greed. Get them to think about why their package is structured the way it is for their level of experience and performance. Encourage them to make more by producing more! I think it’s a discussion well worth having with your young employees who are just starting out. You really want to invest in them, but with the proper set of expectations.

Goleta, Calif.: Mr. Krannich: How about negotiating a salary at hire? Any suggestions as to how to get what’s fair without getting off to a bad start? Thank you!

Ron Krannich: You simply need to do your research on salary comparable --know before you get hired exactly what others make in comparable positions. At the same time, you might want to leave the door open for future re-negotiations if the employer is unwilling to meet your expectations. Ask if it’s possible (again, anything is possible if you know how to ask for it nicely), to revisit the compensation question within 90 days -- after you’ve had a chance to show your worth. If they agree verbally, ask to get this agreement in writing.

Silver Spring, Md.: I am considering two job offers at the moment that are both of interest to me. However, one of the offers paid a slightly higher salary. What is the best way to approach the other company to see if they can match or surpass the offer with the higher salary?

Ron Krannich: The biggest question is which one will you love the most. If you really want the one that pays less, meet with them and tell them the truth (don’t play hardball which may make you appear very self-centered)-- you have an alternative offer, but you really prefer working with them (employers like to know they are wanted!). Then ask if they can meet or better the other offer. Chances are they will -- the cost of additional recruitment will probably be more than what you’re asking. Also, they will get a good lesson in salary comparables -- if they aren’t competitive. Employers need to know this, especially those who haven’t kept up with the market. What you are asking is not at all unreasonable. I think you’ll be okay if you approach it in this manner -- “I love you but....”

Washington, D.C.: I have been out of the workforce for several years, what is a good way for me to approach salary negotiating? I am mid-level and do not want to fall or feel like I need to settle for the lower end of the range.

Ron Krannich: Don’t worry too much about your absence in the workforce. Focus on what the job is really worth by (1) understanding the nature of the work, and (2) doing your research on salary comparables. If you impress the prospective employer enough (you’re going to bring real value to the organization), they should work with you on a fair compensation package that relates to the job you’ll be doing. I would negotiate like any other individual regardless of your employment history.

Lack of HR, D.C.: Good morning, I have completed my first year at a new company, and am trying to determine my approach to salary negotiation. My parent company just experienced significant lay-offs, however we are hiring new staff in my own department. We are being told to cut back and spend wisely. In the meantime, I have had both direct managers leave in the previous five months and am under a new manager with less time at the company than myself. Since I have adopted this new role, it has included an expansion of my responsibilities. I am nervous of the rejection due to the economic climate of initiating salary negotiations with our director. What strategy would you recommend with this environment? Thank you.

Ron Krannich: Yes, this is a touch-and-go environment for many employees these days. You really have to know what’s going on in your organization given such changes (this is probably easier said than done!). Three recommendations: (1) stay close to people who can make a difference and appear to have some longivity, (2) be upbeat and do a terrific job, and (3) document your job and performance. When the time is right, see your boss to discuss your compensation package based on your documentation and performace. If money is an issue, ask to negotiate for other things, such as a more flexible schedule. Keep everything very professional and oriented to the best interests of the organization.

Arlington, Va.: D.C., if your organziation is in a hiring freeze this maybe a stopgap measure before layoffs and terminations are closer. If you like being employed keep your mouth shut except to ask what you can do to help out. Keep a ear to the ground and watch what senior management is doing and watch their body language and how they say things. If they are all interviewing and sending out resumes the writing is on the wall.

Ron Krannich: Good points. You really have to become job savvy these days -- and organizationally smart. At the same time, you probably need to do what others are doing -- update your resume and network a deal with friends and fellow professionals. Your next job will most likely come via your networks. So prepare accordingly! Nothing is forever in the job market.

Anonymous: If a prospective employee asks you how much you currently make, are you obliged to give them the information? And can the prospective employee call the previous employee and verify the information. Thanks.

Ron Krannich: There’s a difference between being asked for your “salary requirements” and your “salary history.” In the first case you can wiggle a lot by moving the question to the end of the interview and getting the prospective employer to volunteer salary information. In the second case, you need to review the facts -- and ALL of the facts. Always remember that you’re not dealing only with salary -- you also have benefits and other things of value (time) attached to your work. If asked about how much you currently make, answer by discussing the value of your compensation package (these packages can vary greatly from one job to another). For example, you may discover that your $50,000 a year base salary actually translates into $75,000 in compensation. On the other hand, the prospective employer’s $50,000 a year base salary may only translate into $55,000 in compensation. Be prepared to discuss what you’re really paid -- the compensation package -- and then ask about the prospective employer’s package. You may be surprised at what you learn. It’s best to discuss this immediately rather than wait until you get on the job!

Clifton, Va.: So you come in, ask for raise with all of this documentation to support your position and, you know, I would like to give you a raise but I can hire someone to replace you at half the salary and they won’t complain. They will be happy to have a job. So why should I keep you?

Ron Krannich: Yes, but you really don’t want to work for such a jerk for very long. If that’s how they value your work, it’s time to look down the road for a much better employer. At the same time, keep in mind that it will cost this person a lot to replace you (from $15,000 to $100,000) because of recruitment, training, and compensation costs. But some employees may not be as valuable to an organizatn as they think and thus this attitude. Nonetheless, some employers are stupid and play this game. They soon learn that they made a VERY costly mistake by not retaining a productive employee who was quite reasonable about compensation issues!

Ron Krannich: Thanks so much for all your questions. If you need any resources on salary and compensation issues, do check out my website -- www.impactpublications.com.

Ron

 
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