Wednesday, August 1, 2012

How to Negotiate an Offer

Great news! You aced your interview and have received an offer for a rewarding career, but the journey to your new career doesn’t end here. For many, negotiating the offer can be the most difficult part of finding a job. You may not know what you are worth in the civilian workplace, or have unrealistic expectations in terms of salary. Here is a guide to this complex step of the process.

Generally, candidates have between 2 and 10 days to accept or counter an offer. Waiting until the last possible moment to accept an offer can make an unintended poor first impression. That said, you should mentally be deliberating any possible offer throughout the hiring process and should be prepared to make a decision as soon as possible.

It is important that you consider everything when making your decision because an offer does not consist exclusively of a base salary. Most companies have a variety of benefits, stock options, bonuses, relocation assistance and other intangibles (company culture, etc.) that can add significantly to the overall value of a compensation package.

Take into account the company's medical and dental plan, vacation package, retirement benefits, and other perks. If the company cannot meet your salary requirements, it may be able to make it up to you in other ways, such as stock options or bonus opportunities. Job satisfaction and advancement potential are two things you should also weigh heavily when considering an offer. 

Salaries are based on your qualifications, background, the job location, and the pay range for the specific position. In some cases there isn't much wiggle room when it comes to salary. The pay structure for entire companies is often based on internal equity - what other individuals with similar qualifications who are currently at the company make. So, major fluctuations in that number can upset the whole system. 

Most companies have a small pay band, typically a few thousand dollars, that they can flex based on an individual’s performance during the interview process. The best interviewers typically land at the top end of a company’s pay band. Keep that in mind when you are preparing for second or subsequent interviews.

Other companies tend to be less flexible about basic pay. When some companies extend an offer, they base it on what they perceive as your market value. These companies feel that they have a pretty good idea about what they have to pay to be competitive and attract the best candidates.

Negotiating your salary, benefits, etc. can be overwhelming. Getting a fair and practical salary is a critical step in the job search process, and one that can be navigated smoothly if you know what to do -- and what not to do. 

It is important to remember that good companies recognize great talent and they will pay fair market value for it. Do not overvalue yourself initially. You may be entering a new industry; it won’t take good companies long to recognize that you are a valuable contributor and promote you. 

In the end, negotiating is not about winning at all costs. It's about agreeing on terms of a job offer that will satisfy you. Don’t get greedy. If you receive a fair offer for a position you want, quit while you're ahead. If you continue to negotiate for the sake of negotiating—even after you've gotten a fair job offer—you may end up hurting yourself. A company could simply end negotiations and present you with an ultimatum. You also risk alienating your future boss. And you certainly don't want your boss to resent you before you've even started work. The bottom line is that salary negotiations, like anything else, need to be done respectfully and kept in perspective. Always be courteous, direct, and honest.

There are many factors that go into negotiating and accepting a position. Keep in mind that the company’s benefits package can add several thousand dollars to an offer, and salary alone should not be the only consideration on compensation. Think about the entire package and decide what best meets the needs of you and your family. 

1 comment:

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