Avoid this mistake when you’re negotiating executive pay

• 2-minute read •
Money isn’t everything—for real, it’s not. Look beyond your salary offer to maximize your long-term earnings.
As you travel up the ladder to the executive level, chances are your salary negotiations will be different than when you were a mid-level employee. Your paychecks will get fatter—and more complex. You’ll still likely receive a salary, but it might represent a smaller share of your potential earnings.

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6 Things to Negotiate When an Employer Won't Budge on Pay

• 2-minute read •
You’ve done the research, brushed up your skills and made the business case for getting more pay than you currently do. But there may come a time when your employer won’t budge on the pay it’s offering. If you’re negotiating a new job offer and aren’t prepared to walk away, you’ll have to be flexible and consider negotiating on one or more of these other points.

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6 Things to Negotiate When an Employer Won't Budge on Pay

• 2-minute read •
Your compensation package includes more than pay and it’s possible to negotiate for valuable perks.
You’ve done the research, brushed up your skills and made the business case for getting more pay than you currently do. But there may come a time when your employer won’t budge on the pay it’s offering. If you’re negotiating a new job offer and aren’t prepared to walk away, you’ll have to be flexible and consider negotiating on one or more of these other points.

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Negotiating with your Interviewer

You excelled in the interview,
you've been offered the job,
and now you're down to negotiating the deal...

But how do you make sure you secure the best deal for you?


A few tips:
Know your worth

You may have an idea of what you are worth based on anecdotal information about what people like you are paid, but you will need something a little more scientific if you are to convince a future employer. Have a comparison list with you in the interview. Write out the requirements for the job, as listed in the advertisement. Add any extra skills you believe are important for the role. Then tick those items that you closely match. This gives you a physical list of your strengths as compared to the employer's needs, and a negotiation base.

Timing is important

Think of the timing and importance of the things you want to negotiate, and acknowledge that some things are not negotiable. Pushing in the wrong direction will only cause friction, and may distract you from pursuing a more productive avenue. For example, don't ask for a car of a specific make or a house in a particular locality. You could be seen as over-confident or, worse, over-demanding.

Look at the whole package subjectively

Some companies have their hands tied when it comes to salary, but may have a number of other benefits that will raise your overall remuneration to a figure that meets your expectations. Consider the tax benefits and liabilities of having a company car, for example, or the opportunity for flexible working or working from home, if this is important to you.

Work towards a win-win situation

It is possible to be too good at negotiating. Squeezing every last penny out of your future employer will not get the relationship off on the best footing. Remember that you will most likely be working with the person you are negotiating your salary with, so keep things convivial, lest your working relationship does not match your salary. Be prepared to compromise. If you ask for six benefits and the company comes back with two, settle for three or four and everyone will win. It's important that the outcome of the negotiation is a win-win situation.

Know your limits

Sometimes no amount of negotiation will get you what you want. If it does not meet your needs, it is time to stop rather than end up with the wrong deal. If not, then be upfront as soon as possible, so that the interviewer can consider you in an enhanced light or, alternatively, cut the process short to save time for all concerned.

Use your best Selling skills to negotiate salary

Never underestimate the importance of negotiating salary in an interview. Employers tend to prefer those candidates who already earn a greater income. While these candidates cost more to employ, their higher incoming salaries are assumed to reflect greater competence, initiative and achievement. So it's in your interest to pursue income increases at every legitimate opportunity.

It starts before going for the interview. A crucial part of your research is the salary range for the position you are applying, of course with your background and experience. Have a salary range in mind and be prepared to discuss these figures once salary negotiation has come up.

• Never discuss salary until you have a job offer
  If you do, you could price yourself out of a job before the employer is convinced they need you. If pressed by the interviewers, tell them you're flexible and would be happy to discuss salary when you learn more about the job.
  
  
• Get the employer to disclose salary before you do.
  Don't be the first to mention salary during the interview. Let the employer bring it up as many times as necessary until you feel ready.
  
  
• Know your absolute bottom line.
  Be clear on what is your minimum salary expectation. Decide before you go in for the interview, what salary you want to earn, what you need to live on, and what you will be willing to settle for.
  
  
• Market yourself.
  Emphasize the reasons you should get the offer. Document your skills and accomplishments, and be prepared to talk about them. Its about selling your skills and ability at the best possible rate.
  
  
• When questioned about desired salary.
  The best response is one that returns the employer's ball back into his court: You can say, "what kind of salary range are you working with?" or "Well, I'd like to make as much as other employees with my qualifications." or "What is a typical salary for this position?" Another strategy is to avoid a specific salary and put forward a pay range instead.
  
  
• Don't forget the value of benefits and perks when negotiating a salary.
  Sometimes the salary offered may seem low, low enough for you to turn down the job. But the benefits and perks can add up to 40 percent to your basic salary. Some benefits are fixed, but others are negotiable such as stock options, bonuses, employee discounts, training, holiday time and sick leave.
  
  
• Do not disclose past salary.
  Once your past salary is on the table, your negotiating edge goes out the window. By not disclosing exactly what your current salary is or exactly what it would take to get you to leave your current job, you'll force a potential employer to make its best offer.
  
  
• Make your salary discussion a friendly experience.
  Be amicable when discussing salary. You should make the employer feel that you are on the same side and working together to find a package that would satisfy everyone's needs.
  
  
• Don't say yes to an offer right away.
  Be enthusiastic and appreciative when you get the job offer, but ask for at least 24 hours to respond. This gives you time to get over your initial joy at being selected. If you feel the salary is insufficient, express your concern to the employer when asking for time to consider the offer. You'll find out right away whether the salary quoted is set in stone or is flexible.
  
  
• Declining an offer.
  If you decide not to accept the offer, make sure you leave on the best of terms. Treat every offer seriously and graciously. You can never tell who you may be doing business with in the future so don't burn any bridges.

Salary Negotiations with your Interviewer

You excelled in the interview, you've been offered the job, and now you're down to negotiating the deal. But how do you make sure you secure the best deal for you?

A few tips:

1. Know your worth
   You may have an idea of what you are worth based on anecdotal information about what people like you are paid, but you will need something a little more scientific if you are to convince a future employer. Have a comparison list with you in the interview. Write out the requirements for the job, as listed in the advertisement. Add any extra skills you believe are important for the role. Then tick those items that you closely match. This gives you a physical list of your strengths as compared to the employer’s needs, and a negotiation base.
   
2. Timing is important
   Think of the timing and importance of the things you want to negotiate, and acknowledge that some things are not negotiable. Pushing in the wrong direction will only cause friction, and may distract you from pursuing a more productive avenue. For example, don't ask for a car of a specific make or a house in a particular locality. You could be seen as over-confident or, worse, over-demanding.
   
3. Look at the whole package subjectively
   Some companies have their hands tied when it comes to salary, but may have a number of other benefits that will raise your overall remuneration to a figure that meets your expectations. Consider the tax benefits and liabilities of having a company car, for example, or the opportunity for flexible working or working from home, if this is important to you.
   
4. Work towards a win-win situation
   It is possible to be too good at negotiating. Squeezing every last penny out of your future employer will not get the relationship off on the best footing. Remember that you will most likely be working with the person you are negotiating your salary with, so keep things convivial, lest your working relationship does not match your salary. Be prepared to compromise. If you ask for six benefits and the company comes back with two, settle for three or four and everyone will win. It's important that the outcome of the negotiation is a win-win situation.
   
5. Know your limits
   Sometimes no amount of negotiation will get you what you want. If it does not meet your needs, it is time to stop rather than end up with the wrong deal. If not, then be upfront as soon as possible, so that the interviewer can consider you in an enhanced light or, alternatively, cut the process short to save time for all concerned.

Commandments For Smart Negotiating

The job market is the best it's been in 20 years. The Commerce Department estimates that businesses will need to hire one million new computer scientists, engineers, systems analysts and computer programmers by 2009.

Yet graduates with degrees in computer science are being produced at a fraction of the rate needed. Reports 190,000 current job openings for web experts and other information-technology specialists, and similar shortages are cropping up in other industries as well.

These market conditions provide a great opportunity to negotiate an excellent compensation package, but only if you understand how.

There are 11 basic commandments to help you negotiate the best possible deal when changing jobs, whether internally or with a new company. They are:

1. Be prepared. The more information you have about your market value and the prospective employer, the greater your likelihood of success. This is the first commandment because it's the most important. There's a wealth of information available on the Internet, at the public library and through professional associations and networking groups. Time spent learning how to negotiate and preparing for negotiations may be the best investment you'll ever make.

2. Recognize that employment negotiations are different. When the negotiations are over, you'll have to work with the person with whom you're negotiating. Moreover, your future success may depend on that person. So, while you want to negotiate the best possible deal, you need to do so in a way that doesn't damage your image. At the same time, the employer's primary concern isn't negotiating the least expensive compensation package it can get away with. Rather, their focus will be on getting you to accept the job.

3. Understand your needs and those of the employer. To be successful in this type of negotiation, you need to examine your priorities. What do you really want? Are you comfortable with a low salary and a large equity stake? Are you able to handle dramatic swings in income from year to year? Understanding your needs will also help you determine the type of company you want to work for. For example, a family-owned company may be able to offer a competitive salary and a large bonus based on results, but may not be willing to offer significant equity to a non-family member. A start-up company, on the other hand, may not be able to offer market salary, but will typically offer stock options. By recognizing what an employer can and can't do, you'll be able to determine what issues you should press.

4. Understand the dynamics of the particular negotiations. Sometimes you'll have skills that are in great demand. And sometimes, you may be one of several qualified candidates the company would be happy to hire. Sizing up the situation and understanding the relative position of each party will help you determine when to press your advantage and when to back off.

5. Never lie, but use the truth to your advantage. It's not only wrong to lie, but in employment negotiations, it's ineffective. If you lie during negotiations, sooner or later you're likely to be caught. Once you are, even if you don't lose the offer, you'll be at a tremendous disadvantage, and your credibility will always be suspect. On the other hand, total candor won't be rewarded. You're under no obligation to blurt out everything you know. You can determine what you want to say and how you want to say it, and try to put everything in its most positive light. One key element of your preparation should be to recognize areas of concern so you can rehearse how to handle them when they inevitably come up.

6. Understand the role fairness plays in the process. The guiding principle for most employers when negotiating is fairness. Within the constraints of their budget and organizational structure, employers usually will agree to anything that's fair and reasonable to hire someone they want. Appeals to fairness are your most powerful weapon. Thus, you should be able to justify every request you make in terms of fairness. For example, if other computer programmers in similar companies are being given sign-on bonuses, you should expect to be treated no differently. Your prospective employer will want you to accept its offer and feel that you've been treated fairly. Understanding the importance of fairness as a negotiating principle can make the difference between success and failure.

7. Use uncertainty to your advantage. The more information you convey to a potential employer about your bottom line, the more likely it will limit what you get. Before making an offer, a company typically tries to determine what it will take for you to accept the position. With that information, the prospective employer will be able to determine the minimum package it needs to offer. While they may not offer you as little as they can get away with, if you've divulged too much information, they likely won't offer you as much as they might have otherwise. By not disclosing exactly what your current compensation is or exactly what it would take to get you to leave your job, you'll force a potential employer to make its best offer.

8. Be creative. Consider the value of the total package. Look for different ways to achieve your objectives. Be willing to make tradeoffs to increase the total value of the deal. If you're creative, you can package what you want in ways that will be acceptable to the company. You'll also be able to find creative "trades" that allow you to withdraw requests that might be problematic to the company in return for improvements in areas where the company has more flexibility. That way, you can maximize the value of the package you negotiate.

9. Focus on your goals, not on winning. Too often in negotiations, the act of winning becomes more important than achieving your goals. And it's also important not to make your future boss feel as if he's lost in the negotiations. You'll have gained little by negotiating a good deal if you alienate your future boss in the process.

10. Know when to quit bargaining. The one sure way to lose everything you've obtained is to be greedy. There comes a point in every negotiation when you've achieved everything you could have reasonably expected to gain. While most companies will want to treat you fairly and make you happy, few companies want a to hire a prima donna. Being perceived as greedy or unreasonable may cause the deal to fall apart. Even if it doesn't, you'll have done immeasurable harm to your career. This brings us to the 11th and most important commandment:

11. Never forget that employment is an ongoing relationship. Job negotiations are the starting point for your career with a company. Get too little and you're disadvantaged throughout your career there; push too hard and you can sour the relationship before it begins.

Understanding these principles will allow you to effectively negotiate the terms of your new job. Then do your job well and continually seek out new challenges. As you take on added responsibilities and learn new skills, there will be opportunities to negotiate further improvements.

Negotiating A Relocation Package

Each month thousands of employees move to a new community, to start a new job. Moves often are more expensive than anticipated. Not only is there the actual expense of moving, but also, for a home-owner, the expenses connected with selling an old home, and buying a new home.

Some corporations may offer to cover some or all of the relocation costs for employees who are moving at the company's request. Larger companies usually offer a more elaborate relocation package than smaller firms. These benefits become particularly important when there is a large increase in housing costs.

When interviewing for a job, ask your prospective employer whether or not it has a relocation program, and find out as much as you can about it.

Benefits which may be offered to a relocating employee vary widely. Each situation may call for a different bundle of benefits; analyze your own situation carefully. It is always best to negotiate these matters as part of a transfer package, before accepting the new job, to avoid surprises to either the employee or the company after the move has taken place.

1. Cost of a familiarization and house-hunting trip for the employee, spouse, and family. (Does your family really want to move here?)
2. Extra time off (with pay) for traveling and house hunting in the new location.
3. Moving expenses, including packing and insurance.
4. Travel expenses (lodging, meals, gas, etc.) while traveling to the new location.
5. Assistance in the sale of your old home:
• Company assumes responsibility for monthly payments, taxes and insurance until the old home is sold.
• Price guarantee: if sold by the employee, the company will pay the difference between the net selling price and a specified price.
• Alternative price guarantee: If employee can not sell the house within a specified period of time, the company will buy it at a specified price.
• Company will pay commissions and other costs of sale.

6. Assistance in the purchase of a new home:
• Company to pay rent of temporary quarters, until a permanent home is located.
• Buy down the interest rate.
• Company provides low or no interest loans.
7. A salary level commensurate with any increase in cost of living between the new location and your old location.

You will want to minimize the tax impact of any benefits you receive. For information on the tax ramifications of your relocation expenses and any reimbursements by your employer.

How hard should you push for relocation expenses? Try to analyze your bargaining position relative to the prospective employer. Does the employer have many options? Are there many qualified local applicants for the same job? Or do you have unique skills unavailable in the local market? Ask yourself, "If I owned the company, would I be willing to pay for my relocation?"

As a final check-list before accepting a new job in a new community, consider the effects on your over-all career goals:

1. Does the move represent a true promotion, or a desirable change in direction, or is it only a lateral move?
2. Is the new location in the "mainstream" of your industry, or are you moving to a "backwater"?
3. Would you prefer to live in the new location for personal, life-style reasons?
4. Considering the changes in salary and costs of living, is the move a financial advantage or disadvantage?

How To Negotiate An Increase

Sure, your boss or Board of Directors might call you in and offer you a raise. But chances are overwhelming that they won't. So if you want to earn more money next year than last, you'll have to initiate the process yourself, and use all your skills to pry loose a little extra.

It's not easy to accomplish, however, In fact, annual increases in base salaries are averaging only 3%, the lowest amount in more than 20 years.

Fortunately, about two-thirds of the nation's employers offer incentive pay for top performers. If you can work your way into this type of program, you'll receive extra pay or other benefits whenever you achieve specific performance targets. Depending on the specifics of your situation, these performance targets might cover just you or your entire team.

Either way, however, incentives can provide much bigger take-home pay increases than conventional raises. Hewitt Associates' surveys show that today's budgets for incentive programs presently average about 7% of the budget for base compensation (that is, salaries). This means incentives provide more than twice as big a pie as raises from which to cut yourself a juicy slice.

Here are some strategic and tactical tips on how to increase your take home pay in the coming twelve months.

Strategic Approaches

1. Determine your worth in the marketplace. Contact the competition, clip and save relevant employment ads, even talk to executive search firms. You might also look for references and facts in magazine articles and compensation surveys that support your idea that you should earn more.

   Be prepared for a happy surprise, especially if you've been working for the same company for several years. There is often a large discrepancy between your present salary and what the market says people with comparable skills and experience can earn. Many people simply don't know what they're worth.

   If you're already getting what the market says you're worth, don't give up on getting more.

2. Consider how to become more valuable to your employer. As business fashions and thinking changes, different departments become "hot" and are deemed worthy of fatter paychecks. For example, today marketing or finance might be better places to earn the big bucks than manufacturing or customer service.

   If you can't switch career tracks so quickly, you still might be able to take on additional responsibilities, or even discover totally new issues and projects that will make you more valuable to the company. Take advantage of the "cross training" mentality that's popular today. At the highest levels, employers nearly always prefer executives who bring a broad-based perspective to their work and the company's mission.

   If your present employer doesn't place extra value on a broader range of skills and knowledge, your cross-training efforts will still make you more valuable--to your next employer.

3. Feel good about asking for a raise, and don't worry about getting canned. "The threat of firing you for wanting too much is nothing but a psychological bluff," says Lawrence D. Schwimmer, author of "How To Ask For A Raise Without Getting Fired," now a top manager with Geneva Corporation, a San Francisco acquisitions and mergers firm. "Even a stupid boss knows the cost of hiring and training your replacement is much more than the raise you're asking for," Schwimmer counsels, "so don't weaken yourself by imagining the worst."

4. Phrase your request assertively, not aggressively. Leave out any "or else" threats, no matter how emotionally satisfying. This allows you to save face if your request is denied. You can take time to think things over, and either make plans to leave or make clear that you've decided you like your job and your firm so much you'll stay and see about getting a raise later on.

5. Anticipate the objections, worries, or problems your request might generate, and incorporate the top three or four in your initial statement. Done right, this approach can "take the wind out of their sails" and make it harder for your employer to say "no." Be careful, though, if you bring up really powerful reasons for refusing you a raise, you might be providing the opposition with unbeatable arguments.

6. Set limits: Don't ask for a raise in general, but for a raise of a certain size. Don't allow an open-ended time limit on getting a response; ask to be informed within two weeks.

Tactical Approaches

Base your request for a raise on performance. Arguments about pay equity, reference to the many years since your last raise, pleas for compassion because you have big expenses coming up--none of these fly very well in today's economy.

"Bring solid documentation of what you've done to help the company," suggests Schwimmer, "and, anticipating that you'll refer to your performance when you ask for a raise, keep a file to document your level of performance during the most recent year or six months."

Be assertive in your request. Don't hint or allude to what you want. Communicate honestly and directly in an appropriate manner. "In fact," says Schwimmer, "you might want to ask for twice as much as you think you're going to get, so you can negotiate down to an acceptable level."

Role play your request before you make it. Try talking about what you've done to merit a raise to yourself in a mirror, or while driving alone. Having said the words many times before, you will probably ask for the increase more confidently and articulately when it counts.

Negotiate for perks and travel benefits, not just salary. For example, get permission to attend seminars and training sessions in areas of interest that lie outside your present job description. Or negotiate for paid leave so you can have more frequent 3-day weekends. Ask for a car allowance. Three out of four times that an increase is in order, say the experts, such a request is met with some concession.

How to Negotiate Your Exit

Few people think about negotiating when they hear the words, "Your services are no longer needed." Instead, they quietly pack up their personal items, say a few goodbyes, and quickly leave out the back door. Would you do things differently if you knew you could exit on your own terms?

Here are six things you can do to transition out of the organization with more than just your belongings.

Offer to stay until your replacement is found.

The last thing your boss wants to do is your job while trying to hire a replacement. Approach your manager with a plan to make this work. Will you put together a training manual that can be used by your replacement? Are you willing to stay on until your coworkers return from vacation? Remember to ask for the support you will need during this transition, such as time off to interview.

Ask for additional compensation.

Perhaps your job loss is part of a company-wide reorganization. You may think everyone is getting the same package, but that is rarely the case. Factors such as length of service and level in the organization are all considerations when assembling separation packages. If you don't ask you will never know what your employer might have been willing to give you.

If you are a member of a protected class (e.g., over the age of 40, women, minorities, etc.) you may have additional bargaining power. Employers would rather pay an additional few weeks of severance than risk going to court.

Ask if your benefits can be extended.

You may be able to retain your employee benefits for a bit longer if your employer is willing to pay your severance out over time. Check with your local unemployment office before asking for this option as this could affect when you may be eligible for unemployment benefits.

Ask for a letter of reference.

The actual letters mean little to prospective employers. However, your boss is less likely to say anything negative if he has provided you with a letter of reference.

If you are being fired, ask if you can resign.

It is an uncomfortable situation for everyone when someone is fired. To preserve your employment record, ask your supervisor if you can resign. Most employers will gladly accept your offer to prevent confrontation. If you take this route, be sure your employer agrees not to contest your unemployment claim.

Inquire about purchasing your computer.

In downsizing situations there is usually an abundance of equipment, like computers, that will no longer be needed by the company. You may be able to purchase a faster computer than the one you own at fire-sale prices.

Losing a job is never easy. Exiting with a nice package can certainly help ease the pain.