Negotiating salary and benefits can be quite daunting if you don’t know what can be negotiated. It can seem that salary is to job value what location is to real estate—everything. But, while salary is, of course, an important factor when you’re considering a job offer, there are other perks to explore as well. Remember, money doesn’t always show itself right away. A better title now, for example, could mean an easier time getting a higher-paying job down the road. Or a gym membership (when used as directed) could save you money on medical care in the years to come. The best negotiators are often those professionals who spend time educating themselves about the job market and their target employer. Whether you’re asking for a raise, negotiating a new contract, or exploring benefits, it’s important to research all of your options before entering such a discussion.
Successful negotiation 101
Successful negotiation is based on preparation and patience. You should always anticipate what you may need to know when you speak with any potential employer. First, research the value of your talent in the employment marketplace. Find sources that tell you what companies pay for the job you’re considering. The sources should take into account the size of the company you work for and its industry and region. It is more helpful if you can use a source that helps you calculate the potential value of your personal skills and background such as education, length of experience, certifications, and management responsibility. Second, NEVER be the first to disclose a number. If possible, try to get the employer to disclose the pay for the job before you tell your requirements. If you find this too difficult or awkward, consider providing a broad range (based on the research you did above) and say you expect “a fair total pay package for the job and my unique set of skills, including….” Finally, prepare a counteroffer. About half of all job-seekers accept the first offer that’s put on the table, but most employers make offers expecting candidates to counteroffer – so go ahead, ask for what you want. Remember that your counteroffer can include more than just base pay; it can include bonuses, stock options, vacation time, and a flexible working schedule. Every time you speak with a potential employer, you should be prepared with a complete summary of your ideal offer, and you should know in your mind how negotiable you are on each item.
Even though salary is important, don’t forget to negotiate benefits. Overall, benefits can make up to 30 percent of your salary. Your compensation should meet all of your needs, not just monetary ones. Consider hiring bonuses, vacation time, retirement plans, sick leave, insurance, flexible schedule (a reasonable trade-off to higher pay) and other company benefits as open for negotiation as well. If you are planning to go back to school, tuition reimbursement may be just as important as health insurance. If you’re planning to start a family, maternity leave and vacation time may be the most important feature for you. All of these benefits can tip the scale in negotiating salary.
As you approach these negotiations, be aware that a prospective employer may withdraw an offer if it feels that your requests are excessive and not in line with what the company can offer. Any negotiation should be approached in a professional and reasonable manner. Equipping yourself with research done beforehand ensures your requests will more likely be considered.
The biggest mistake
So those are the benefits, what are some common mistakes made by the average job seeker? The biggest mistake is accepting the first salary offer. Since employers anticipate a counteroffer, many include room for negotiation in their first offer. This is very true for jobs at a higher level or higher salary. If you accept the first offer, you may be leaving money on the table. Regardless of whether the employer has room to increase the salary offer, you should be comfortable asking. But be careful: don’t make demands or issue ultimatums unless you really are willing to walk away from the existing offer. Second, too many people rely on the potential employer to determine the fair compensation for the job. Spending a little time learning how the relevant labor market values a particular job and how your unique skills may further increase those values can have a dramatic impact on your ability to maximize your total compensation. Knowing the facts and being able to speak intelligently about them can support and justify your desired pay. Finally, once again, don’t neglect to negotiate things beyond base pay. Base salary is just one of the negotiation points. There are many more items to consider when negotiating your initial employment package. Once the salary negotiation is complete, moving on to the other components of total pay can be rewarding.