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Ask The Career Coach: Compensation Negotiation

March 19, 2014

Today’s blog post comes from our “Ask the Career Coach” Column by Denise Riebman (AmeriCorps ’94), Director of Career Development and Alumni Services for the Trachtenberg School of Public Policy and Public Administration at George Washington University. Denise regularly takes questions from our LinkedIn Group and responds in our “Ask the Career Coach” column.  If you have a question for the AmeriCorps Alums “Ask the Career Coach” column, you can submit it here.

$293.16 was my bi-weekly AmeriCorps stipend in 1994.  It’s no surprise that after AmeriCorps, I was lousy at salary negotiation since if anyone offered me anything even slightly over that amount, I simultaneously felt very guilty and very wealthy.  Don’t make my mistake as each future salary is based on the previous one.  Just a single $5,000 salary bump in your 20s can result in a difference of more than a million dollars over the course of your career.  By learning the Power of Compensation Negotiation, that money can be yours!

Power of Avoidance

If asked for salary requirements in your cover letter, unless it explicitly states that all applicants must include a figure (if so, general rule of thumb is a $10,000 range), write something like:

“My salary requirements are negotiable based upon job responsibilities and overall compensation package.”

2014.03.19.Salary.NegotiationIf asked for salary history, include one as a separate page like these examples.  This is primarily used to eliminate candidates with a higher salary than what is available so if you suspect you’re in that category, it’s your responsibility to address this in your cover letter by talking about your compensation flexibility or awareness that you are transitioning to a different line of work.  On the flip side, if your salary history is low, include on your salary history notes such as “AmeriCorps stipend,” “internship” or “in-country pay rate.”  It’s easy for them to verify the figures, so keep your facts accurate!

If asked during an initial interview about salary, try deferring the question to the future when you’d know more about the position.  If pressed, talk about how you’ve done some initial research but are interested in first finding out the range that they’ve budgeted for the position.  You can even reframe the issue while also strengthening your position by saying:

“While salary is obviously a factor, it’s not the priority issue for me.  Finding a place where I can be an asset and contribute to a strong organization are the most important factors for me at this point in the process.”

Power of Worth

Know your strengths and what the market values based on your education/experience, geography, organization budget, position level and current compensation trends in that field.  In addition to reaching out to your network to research current salaries in your field, check out these resources:

An intriguing study, “Precise Offers are Potent Anchors” showed that when people use an exact dollar amount for an initial offer ($45,525 vs. $45,500 for baseline salary; $2,880 vs $2900 for counteroffer) they were perceived to be better informed about their worth and the market which then set the stage for the rest of the negotiation.  However, it also revealed that this can result in a perception of inflexibility so if you try this approach, be sure to reiterate your excitement about the position and organization and use words like “we” instead of “I.”

Power of the Package

2014.03.19 Compensation PackageThink outside the salary box to factor in the entire compensation package including vacation time, health benefits, retirement, professional development, association membership, conferences, tuition reimbursement, relocation assistance and maternity/paternity leave.  During one job negotiation, I factored in that my current position paid 100% medical benefits and this new position did not so this was part of my bargaining tools. While according to recent studies, less than 50% of companies have annual benefits statements, check with HR for specific details about their value and use that information to your advantage.

Know which compensation benefits are most important for you now AND long term.  For example, if the employer will pay for a specific certification valuable in your field, focus on getting that included in your package.

Power of Leverage

Karen Chopra, Founder of The Savvy Career Counselor (http://www.thesavvycareercounselor.com/), applies expertise from spending the first part of her career negotiating trade issues for the U.S. Government to compensation negotiation and highlights three components of leverage: Time, Information and Power.  If they need someone now, their time constraint increases your leverage; If you have exactly what they are looking for, you have power; If you know the salary range, you have critical information.  Her message reinforces waiting to talk about compensation until an offer has been made to maximize these leverage points.

Long term professional leverage includes approaching the process knowing the minimum compensation you are willing to accept so that you can come to BATNA – Best Alternative to a Negotiated Agreement.  Create a Win-Win for everyone involved as this will be your new place of employment!

Power of Waiting

When an offer is given, it is tempting to shout “YES” from the rooftops!  Instead, express your appreciation and then tell them you need time to evaluate the offer.  After the agreed upon period for you to review the offer, arrange to talk, preferably in person, to negotiate for the best possible compensation package.  During the negotiation, remember less is more:

“Thank you again for the offer to work as the Youth Program Manager for your organization.  I’m excited about this position and know that my direct service background and academic training will bring a lot of value to this role.  I appreciate the initial salary offer of $45,000 and based on the level of experience and knowledge of the youth development field I bring, I was expecting to be in the $50,000 range for this position.”

And then don’t say anything.  Don’t apologize for asking for more.  Don’t try to justify it further.  Wait for their reply.  More times than not, they will come back with a higher amount.

Power of Writing

There are too many instances of hiring managers leaving or positions being pulled so wait to announce anything until it’s in writing.  Once you have your offer letter, celebrate that you’ve not only landed an exciting new job but also negotiated for a salary you are excited about taking to the bank!

2 Comments leave one →
  1. March 31, 2014 5:34 pm

    Powerful techniques and great examples.

    Thanks Denise!

  2. sgsmvistaleader permalink
    April 30, 2014 11:54 am

    Reblogged this on STL(VISTA).

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