Wednesday, September 19, 2007

Negotiating Compensation Options Other Than Base Salary

According to a recent survey of 1,000 organizations (conducted by Mercer HR Consulting), the average merit increase for 2008 will only be about 3.8%. As a result, companies are constantly looking for creative ways to attract talent and engage employees without making large adjustments to the employee's base salary and compromising the integrity of the company's merit increase program. This can be achieved by offering short-term incentives and special recognitions that are not tied to the company's base pay. Job seekers can more effectively negotiate their total compensation package by knowing what special incentives the employer offers. Two incentives that are becoming more common are sign on bonuses and project milestone awards.

Sign on bonuses
Employers are trending towards offering more sign on bonuses to candidates in lieu of a higher base salary. Sign on bonuses represent a one-time payment to the new employee and the money is not folded into the base salary, so the sign on bonus doesn't impact the new employee's positioning in the salary range. It is reasonable to request a sign on bonus that is approximately 10% of the starting salary.

Project Milestone Awards
More employers are offering incentives to employees for successfully completing projects within a designated time frame and budget. By negotiating project milestone awards before you accept a position, you can improve your overall compensation package while leaving the harder to negotiate base salary intact.

If you can't negotiate the base salary due to the company's strict guidelines for salary ranges and merit increases, consider negotiating one of these incentives to improve your employment package.

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