Negotiating complex pay packages isn’t easy. And very few people I know actually enjoy the process. Most people don’t feel confident in how they should approach pay negotiations. These 5 tips can help:
- Understand the package
- Know what you want
- Stand up for yourself (but don’t be a jerk)
- Be prepared to walk away
- Get help
Understand the package
Don’t just think about base salary during pay negotiations. Short-term incentives (like bonuses and commissions), long-term incentives (like stock), benefits (like healthcare, retirement, and vacation), and the culture of the company, are all important.
If you want to understand short-term incentives better, be sure to ask about the target (usually a percentage of base pay), what the average actual payout has been for the past 3-5 years, and when you’d be eligible for your first payout. You can ask similar questions about long-term incentives.
Do your homework: read all of the materials that come with your offer letter. If you’re in college (or are a recent grad), your placement office may have helpful information. Many organizations put tons of details online, too. The questions you ask shouldn’t be easily answered by reading things you already have.
If you’re changing locations, you’ll also want to think about how taxes and cost of living will affect your offer, as well as what the relocation package looks like. Employers focus on cost of labor (how much it costs to pay people) rather than cost of living (how much it costs to live in a place).
While salaries are typically higher in New York City and San Francisco than they are in the rest of the country, they’re usually not high enough to offset the higher cost of living there. But other factors can make those places more attractive, too.
Know what you want
Be clear and specific about what’s important to you, and know that there are certain things that you may want that the organization is unable or unwilling to negotiate.
If the incentive pay makes sense to you, but the base pay doesn’t meet your expectations, spend your time talking with them about base pay, not about incentives.
And know that, while the cost of healthcare premiums is almost never negotiable, you might be able to negotiate an increase to base pay that can help offset it, if that’s something important to you.
Stand up for yourself (but don’t be a jerk)
The organization’s job is to get the most out of you at what they think is a fair price. It’s not to screw you over. Think about it. They want you to start your new job excited to contribute, not with a chip on your shoulder.
Your job, on the other hand, is to get the most out of the organization for what you’ll be doing for them. Your job is to stand up for what you want. It’s okay to be firm, but remember, nobody likes dealing with jerks, so don’t be one.
Don’t forget that how you conduct yourself in pay negotiations will almost certainly get back to your new manager (if you’re not already dealing with her/him). Don’t say or do anything during negotiations that you wouldn’t say or do in front of your manager.
Rank the pieces of the package you want to negotiate from the most important to the least, knowing you might not get through your whole list. And if it’s not really important to you, don’t try to negotiate it. It’s pretty easy to get negotiation fatigue, and from there, it’s just a hop, skip, and a jump to Jerkville.
Be prepared to walk away
Ideally, the organization’s needs and yours match up well, but sometimes, they just don’t. When things don’t work out, try not to beat yourself up about it. If you take a job that’s not a match, it’s likely to mean heartache in the end.
If you feel confident and secure enough to actually be okay if things don’t work out with the job offer, it takes the pressure off so you can stay curious during negotiations. When you’re not so tied to the outcome, it’s much less likely that you’ll wind up doing something you regret (like pushing too hard or seeing a match when there really isn’t one).
Don’t go it alone – this is hard stuff! Make sure you have someone to bounce ideas off of who has your best interest in mind. Having your school’s career counselor or a trusted friend or your leadership coach in your corner can help you focus on what’s important and show up the way you want to.
What’s helped you most in your pay negotiations? Let us know in the comments below!