Negotiation Tip #5

Negotiation starts the moment you submit your resume and continues during the interview process. Don’t sell yourself at one level and then expect an offer for a higher level. During the interview process you start building the relationship with the employer and showcasing your value as a candidate. Once you’ve built maximum value throughout the interview process, you will have the leverage to negotiate the best compensation package possible. I have two more tips to share. Check back tomorrow for the next tip.

Negotiation Tips #3 and 4

Surveys suggest that 85-90% of hiring managers do not make their best offer first. The employer begins the negotiation process knowing how much money is budgeted for the position and how much flexibility there is around that figure. They also know how long they’ve been looking and how competitive the job market is for someone with your abilities. These factors influence what they offer initially. They want to have some wiggle room…they know the candidate may chose to negotiate their compensation. By starting low they have built in flexibility during the negotiation process.

Counteroffers are generally 10-15% above the original offer. Again, employers know they may need to negotiate, so it’s reasonable to assume that there’s flexibility built in to the initial offer. Employers expect you to negotiate. In addition to the financial rewards associated with salary negotiation, you will gain the respect of the hiring manager and increase your credibility within the organization.

I have a few more tips to share. Check back tomorrow!

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.

Take Charge of Your Annual Performance Review

According to a recent survey by Mercer HR Consulting, mentioned on the Compensation Force blog, salary increases in 2007/2008 will average 3.5% and be approximately 5.7% for top performers. One of the best ways to ensure that your performance is rated on the high end of the scale is to take ownership of the performance appraisal process. By documenting your achievements each time you complete a significant project, milestone, or job task, you maximize the chances of your accomplishments being recognized at review time. Make sure to quantify your achievements by showing how the projects you managed helped make money, save money, save time, maintain the business, or grow the business and use numbers, dollars, and percentages whenever possible to validate your accomplishments.

Ideally, you are receiving feedback on how you are doing against your job goals throughout the year, but in reality, this doesn't always occur as frequently as most employees would like. By consistently recording your successes throughout the year, you can improve your chances of garnering a more lucrative increase at review time

Salary Increases in 2008 Expected to Be 4%

According to the Compensation Force Blog, 2008 salary increases are expected to average 4%. With that in mind, job seekers should consider strategies for negotiating their total compensation packages that go past the base salary. By negotiating a signing bonus or pro-rated bonus based on individual or company performance, job seekers may be able to barter for a more generous total rewards package. Stock options and company perks like cell phones and laptops when appropriate may also be requested to help "sweeten the pot". Companies will only budge so far when negotiating a performance increase. Try to negotiate more of the "extras" before you take the job to help compensate for some of the "average" salary increases you may be offered along the way.