After receiving a job offer, would you ever say: “No thanks,
really, that’s enough money. Please do
NOT give me anymore. Give it to someone
else.”? Really?
Of course not.
But guess what?
That’s what people are DOING when they don’t follow key steps for
discussing pay. Whether it’s a raise, promotion or job offer – lots of people leave money on the table.
IT HAPPENS ALL THE TIME.
How do you avoid this monumental mistake? Simple. Follow 6 key steps:
1. Learn what you COULD be getting
This is probably the biggest mistake people make. They don’t take the time to learn everything
that’s out there – all the rewards they could be getting. They assume the company means something they
don’t (for example, they assume they will be eligible for a raise but then are
disappointed to find out they have to wait longer). And you know what happens when you
assume.
You don’t get it.
So do your homework. Find
out what the offer should include. For example:
- Bonus (how much and in what form) – any of it guaranteed for the first year? Should it be?
- Equity (stock options, restricted stock, etc.)
- Benefits (employee portion, prescription coverage)
- Supplemental benefits and/or 401(k) matches
- Noncompetes (and other restrictive clauses); and
- Severance, to name a few.
How do you find out?
Get advice from peers, friends and experts. Ask around.
Then get answers to important questions like: How much is
the job worth in the marketplace? Will
you be eligible for an increase next year?
Is the bonus amount listed the target or the max? How much are those stock options worth and
when can I exercise them? Will I get
more? Is that noncompete clause
fair? How much severance should I be
expecting? What about relocation – am I
receiving a fair package?
Again, ask around.
Some of these questions you can discuss with your employer by asking
them more about their rewards programs.
Or you can ask friends, colleagues and experts.
2. Make a list – what you want and what you need
This is a very critical – yet often overlooked – step in the
process. Once you catalogue all the
possible compensation, benefits and other contract terms available, prioritize
them. This helps with the discussion
process. Identify what tops your list
and what sinks to the bottom. Then,
during the compensation discussion, revisit your list periodically. Don’t allow yourself to be swayed by a sales
pitch that offers 50,000 options (that could possibly, probably, maybe be worth
something eventually) when you really wanted more guaranteed income. If you do, you will find yourself very
unhappy later.
3. Learn the rules of the game
Remember how you learned to play Candy Crush before you could
advance to the next level? Same goes for
compensation. Each company approaches
compensation differently – as it should.
Finding out how your current – or potential – employer approaches
compensation provides critical strategic insight that will help you determine
how and what to ask for – and how much.
For example, if the company is pre-IPO, asking for options
would be a wise move. The company may
have limited cash and be unable to offer much cash compensation, including
401(k) matches, relocation or benefits.
Keep this in mind when deciding how many options you want – because you
won’t be receiving the other rewards that more mature companies can offer.
If the employer is a non-profit, it manages to a fixed
budget. Therefore, focus on base salary
because bonuses (if any) will be minimal.
However, the benefits might be quite generous.
Where is this information?
Public companies disclose this information in their proxies and annual
reports. Some companies highlight their
compensation approach on their website.
Or, you can ask peers, colleagues and other experts - even the
hiring manager. Googling the information
is always possible too.
4. Change your mindset
You aren’t buying a car, so don’t approach this discussion
like it is a one-time negotiation. In fact, forget the entire notion of
negotiating. Instead, focus on building
a long-term relationship with this company.
As much as possible, talk “live” (either via phone or in person). Avoid texts and emails if possible. Be personable. Smile.
Make small talk. Use good manners
and watch nonverbal cues (like crossing your arms).
5. Practice
Still nervous? Then
practice. It may seem silly but
practicing you approach with a friend will help
shed your nerves and gain confidence.
6. Take a “winning”
approach
In essence, make a new friend. You want to keep the
conversation friendly and informal. Most
importantly – LISTEN. Don’t feel the
need to talk incessantly. Ask open-ended
questions and take notes. Never agree to
anything right away. Always ask for time
to think over the offer before responding.
And ALWAYS get the offer in writing.
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