Negotiating a Deal - Job Offer

[globetrotter]

I just hired a couple of guys, and it was an interesting expereince - I wanted two specific guys, but I had a lot of options. I had gone to my CEO with a business plan for hiring them, and it basically said "the two positions will cost us X per year, and return Y per year within 3 years". each of the guys wanted more (between starting the process and hiring them, the dollar dropped significantly, and they were both of foreign currency) and so I had to go back to my CEO, and explain why I needed more money. then, they each wanted specific package issues, vacation taht was different from compnay policy, insurance that was not standard etc - the whole time, I was running in my head a calculation of at what point it was worth it just to hre my second favorite candidates and cut them loose. one of my guys is so high mantanance that I would never have hired him if I had read the signs of that before I hired him - he is very valuable, and very good for the position, just high maintainance, and I need to deal with his whinning every week.


the point is - you don't want your future boss to think that you are going to be high maintainance.

 

[Piobaire]

Originally Posted by Joel_Cairo

not to threadjack, but can you expand on this principle bit Piobaire? Doesn't it fly in the face of game theory's "first mover advantage"?

Joe:

I see others have already given some of the answer. For me, it basically amounts to this: in negotiation, it is easy to come down from your initial offer (if you are the seller or tentative employee) but nearly impossible to come up. If you give the initial number, the negotiation automatically has an upward limit to it. Not good, as your job is to move the final offer up as high as possible, and you just capped the limit.

True story for example: when I was a kid I collected comic books. When I was about 14 I took a certain book to sell to a dealer and in my head I wanted $50. He looked the book over and asked me what I wanted. I told him whatever he thought was fair. He offered me $400. Even at 14 I knew if I had blurted $50, that is what I would have gotten. The business education and practical experience in negotiation for big stakes all came later, but that little incident has stayed with me over 20 years now.

 

[gnatty8]

I am on my 4th company in my 12 year long career, so I know a few things about negotiating packages. I have also negotiated offers and then turned them down when my then current employer counter-offered with a much better position (I do not advise this, as it can be very dangerous and not recommended if you have a weak stomach). I am currently finalizing negotiations to move on to an officer level job at another very large (Fortune 250) organization; and it all comes down to one very simple (but fairly unknown quantity) : how much do they want you? This is related to the question of can they get somebody else for less, on a productivity/performance adjusted basis.

First off, give up your desires for this weird health benefits package and just try to negotiate the cash value instead, and then pay for it yourself. It just sounds weird going to a company and saying "I want $X00,000 a year, XX weeks in vacation, $XX,000 signing bonus, and XX% guaranteed annual bonus, oh, and I want my health insurance to cover massages too..." Again, negotiate the cash and buy it yourself.

Second. Most companies tier their vacation benefits. This sucks, and probably does more to discourage mid career (i.e. someone who has been working 10 to 15 years) people from leaving their current jobs than anything. However, this is often pretty easily negotiable. The guideline I would use is this. If you had started your career with the company and worked for them since, what vacation benefit would you qualify for? For example, if you started working 8 years ago, what is your (potential) new company's policy on vacation for people with 8 years tenure? If it is 2 weeks, then asking for 3 weeks may be a little tough for a number of reasons. It might send the wrong signal; it could be perceived as tipping the "equity" scale against existing employees; and so on.

Everything is negotiable, but again, it comes down to how much they want you and how easily you can be replaced if you turn down their offer.

 

[gnatty8]

Originally Posted by Piobaire

Joe:

I see others have already given some of the answer. For me, it basically amounts to this: in negotiation, it is easy to come down from your initial offer (if you are the seller or tentative employee) but nearly impossible to come up. If you give the initial number, the negotiation automatically has an upward limit to it. Not good, as your job is to move the final offer up as high as possible, and you just capped the limit.

True story for example: when I was a kid I collected comic books. When I was about 14 I took a certain book to sell to a dealer and in my head I wanted $50. He looked the book over and asked me what I wanted. I told him whatever he thought was fair. He offered me $400. Even at 14 I knew if I had blurted $50, that is what I would have gotten. The business education and practical experience in negotiation for big stakes all came later, but that little incident has stayed with me over 20 years now.


+1. Particularly in the world of employment. Our sense of what we are "worth" is often skewed by how we view ourselves, and the compensation practices of our current employer.

 

[Kent Wang]

If you are negotiating face-to-face, be sure to separate the room first into 'power zones.' The classic five zones are: Earth, Fire, Water, Air, and double scorpion. Use colored masking tape to demarcate the zones, but be sure to purify the tape first by passing it through a cloud of incense or burying it in fertile earth for five days. Cast runes to determine where your prime negotiation position is located for that day. Do not let anyone touch these runes. Attempt to maneuver the other party into the zone that the runes favor. This is called 'getting him just where you want him.' Ignore the old adage that it is best to negotiate from a position of strength. Recent studies prove that it is always best to negotiate from double scorpion.

 

[Dragon]

Originally Posted by FidelCashflow

For example if you really want $100,000 a year, and they ask what you're looking for, say something like "I'm thinking somewhere between $90,000 and $120,000"

Excellent, let`s agree @ $90,000

 

[Earthmover]

I think others have covered this, but I'll also state that it's better to ask for more cash than to tailor a health/benefits plan that has massages. I'd say that you should valuate how much the massage benefits will cost you and just ask for a salary that reflects the upward adjustment.

It seems like you're a lawyer, and from what I've see, most private sector legal jobs offer 3 or 4 (mostly 4 is what I've seen) weeks of vacation. If that is not the case, you should decide if there are alternatives you can work out internally and with the company that gave you the offer, or whether it's a true dealbreaker.

 

[lawyerdad]

Originally Posted by Piobaire

Joe:

I see others have already given some of the answer. For me, it basically amounts to this: in negotiation, it is easy to come down from your initial offer (if you are the seller or tentative employee) but nearly impossible to come up. If you give the initial number, the negotiation automatically has an upward limit to it. Not good, as your job is to move the final offer up as high as possible, and you just capped the limit.

I tend to agree. Add to that (or maybe it's just another aspect of the same point) the unstated assumption that the first number put on the table is necessarily a negotiable "opening bid". So effectively, as Piobaire explains, all you've done is limit your upside.

 

[lawyerdad]

Originally Posted by Dragon

Excellent, let`s agree @ $90,000

Or $90,001. But I generally agree with dragon -- I always find the "range" approach to be stupid. If a plaintiff's lawyer tells me his client really "needs", say, "something over $ 1 million" or "between $1M and $2M, what I hear is "the ceiling is now $1 million, we'll take that or possibly somewhat less."

 

[grimslade]

Do you know what their standard benefits package is? If not, try to find out. You don't want to burn any capital asking for things that you would have gotten anyway.

Second, don't be high maintenance. Far easier to ask for the money to cover your "massuese" than to ask for coverage that they don't normally offer. Likewise, with vacation, the suggestion that you ask to be tiered into the relevant category for your experience, rather than your length of service at the new firm, is probably your best bet.

 

[FidelCashflow]

Originally Posted by Dragon

Excellent, let`s agree @ $90,000

Counter-offer $110,000. Duh.

So let me turn the question around to you: if the employer asks you in an interview POINT BLANK: "What are your salary expectations?" What would you say? (assume that you give some non-answer like "competitive wages" or "what were you thinking?" and they still press you to be more specific.) This whole thing about "let them speak first" only seems to work if the employer wants to. Often they have a somewhat stronger bargaining position. You can walk away and not get the job, and they may have several qualified applicants for one position.

 

[grimslade]

I think Dragon's point is, if you are asked, don't offer a figure at the low end that's lower than you're shooting for, if you're going to offer a range at all. Why not just say, "I'd like to be making $120K"?

 

[Piobaire]

Originally Posted by FidelCashflow

So let me turn the question around to you: if the employer asks you in an interview POINT BLANK: "What are your salary expectations?" What would you say? (assume that you give some non-answer like "competitive wages" or "what were you thinking?" and they still press you to be more specific.)

This whole thing about "let them speak first" only seems to work if the employer wants to. Often they have a somewhat stronger bargaining position. You can walk away and not get the job, and they may have several qualified applicants for one position.

Simple. Tell the person you want 10k over what they're making (assuming the person hiring is in a position superior to the one you are applying for). Say it with a smile. Make it a joke. Then tell them you are open to a counter offer.

On the other hand, keep refusing to answer. Tell them you are not a game player. You realize that there is a budget in place and a salary range has been budgeted. Just tell me the budget.

Negotiating is not about what someone else will allow to happen, it is about what you make happen.

 

[FidelCashflow]

Originally Posted by Piobaire

keep refusing to answer. Tell them you are not a game player. You realize that there is a budget in place and a salary range has been budgeted. Just tell me the budget.

But they can just as well refuse to tell you the budget and keep saying "Just tell me your expectations, I asked first." This whole hardball strategy can go either way, and it can grind to a halt if both people are equally hard-headed.

Originally Posted by grimslade

Why not just say, "I'd like to be making $120K"?

There is a risk that the employer might think "****, this guy's too demanding. Time to move onto the next candidate..." Besides, they may have already asked another similarly qualified candidate his expectations and got back a figure of $100k. So now you've priced yourself $20k above a competitor when you would have accepted $100k to begin with. Even if you're marginally more qualified than the other guy, they may not think it's worth it for them to try to bring you down to a more reasonable amount.

You may get it, but you may blow the opportunity too. My suggestion was just my suggestion, there is no right/wrong answer, and either one can win big or backfire.

 

[doink]

Not sure where the "lawyer" image came from, I do work extensively with law and develop legal agreements, but I am not a lawyer. I also have quite a bit of experience as an expert witness and being sued in my volunteer life. I am pretty sure I have not misstated my profession around here.

It turns out a person who I have done work with in the past, used to work at the company and was very forthcoming with useful information including salary (a bit lower than I expected, benefits, time off, work environment, life -work balance, etc). An interesting thing is that the company gives time off for a limited amount of volunteer work.

Thanks for all of the advice. Hopefully we get a meeting set up and the negotiations done so I can figure out what to do with my time off in December.