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We all learn to negotiate as part of growing up. We negotiate with our parents, our siblings, our friends, our teachers, babysitters, our spouse, and then it all cycles back to our kids. It's a never ending cycle of negotiating for almost everything in our lives. But when it comes to salary negotiation, most people just shut down. My objective is to help you shine throughout the salary negotiation process.

We all know how to negotiate in our personal lives, but when it comes to a job, most people simply don't know how to negotiate. And despite the fact that negotiating is a vital skill, we're taught nothing about it in school. We see our ability to negotiate wane when faced with circumstances that require us to negotiate for our livelihood. Although most of this article focuses on salary negotiations, the tools and processes that you learn will certainly help you in your everyday life.

There are three phases to the negotiation process.

Pre-negotiation - includes all the research and preparation you need to do in order to be successful in your salary negotiations.
Negotiation - addresses what to do once you've received an offer. We'll provide you with different approaches to negotiate with positive results.
Closing Negotiations - is the final stage, and involves you making sure everything that you've agreed to is documented. Always make sure it's in writing!

Pre-negotiation

You need to learn as much as you can about the industry, the company, and the role within that company. You can research online or conduct informational interviews to gain more insight into the company. You should understand the following to give you a good preview of the landscape in which you'd be spending a good portion of your time.

What are the average salaries within each segment, industry, geography?
How much travel is involved?
What is the education and training required?
What is the culture in the workplace (will you be working 40 or 80 hour weeks)?
What is the skill-set and education of other people in your group, and in your company? What skills and experience are important to the company?
What is the competition in the marketplace for people with your qualifications?

The more information you have the better. The company you're talking with will determine your value based on what you were making and what you were able to accomplish (or $ saved) at your last company. But they will also be looking at the compensation for existing employees, industry standard salaries, and how many qualified candidates are out there vying for the same job.

To this last point, you need to make sure you're able to differentiate yourself from the competition. Understand what skills and experiences are important to the company; and understand how you match against these. Acquire as much information about the job and the company that will help set you apart from the other candidates. The more information you have, the better off you'll be if and when salary negotiations start.

Before you start this process, you need to identify your absolute lowest salary limit. This serves as your worse case scenario. You need to know you're lower salary limits in order to maintain a given level of personal happiness. Identify at least 10 items you can use to negotiate with. Below are several examples:

Base Salary
Salary increase timing and percentage
Stock and/or options
Early Performance Review
Commission
Bonus (sign-on / performance)
Percentage of Savings you Generate
Severance Package
Retirement Plan
Vacation
Telecommuting
Equipment: car, phone, PC, etc.
Health Club
Tuition Assistance
Child Care
Relocation Expenses
Event Tickets
Professional / Association Dues
Travel Benefits
Car and Mileage Allowance
Parking / Train Expenses

Negotiation

Salary negotiations can be likened to a hand of poker. In many cases, the company (HR or Hiring Manager) will prompt you to show your hand first, to give them a starting point if negotiations take place. It's always best to see their hand first. If they show their hand first, they've established the bottom of the salary range. If you start first, you've set the upper range; and if you provide a salary range, they'll start at the lower end of this range. The person who talks money first, sets the target for negotiations, and loses the upper hand.

Because of this, it's important to learn deflecting strategies. It's just like when you go to buy a car. When the hiring manager/recruiter asks you about what salary you are expecting, a good response is to not offer a value amount, but to delay the question until you have enough information to make a valid answer concerning the job and salary.

Salary Deflecting Responses

Below are some standard deflecting responses:

I’d be glad to discuss my requirements when I have more information about the total compensation package offered for the position.
Rather than making salary an issue in the process, I would prefer to discuss compensation in the context of the opportunity presented and my potential contributions.
I would prefer to defer discussion of compensation issues and focus first on the match between your needs and my capabilities.
Until we have had more time to discuss the position and its responsibilities, I would prefer to defer talking about salary.

Try to get them to provide a salary range for the position. Sometimes they put pressure on you to give an exact amount and you're stuck in a hard place having to give them an answer. If you're unable to hold them off, give them a salary range instead of an exact number. If the hiring manager or recruiter is asking about your salary from the last company you worked at, give them a base range. Giving them an exact number can sometimes rule you out before even getting an interview.

In deflecting inquiries about either your last salary or your current expectations, don't persist if you're no longer comfortable deflecting the conversation. If pressed, ask the interviewer what the established range is for the position, and then relay whether or not it fits within your range. In any event, be sure to express your willingness to be flexible.

Below are some additional salary deflecting responses. Use the ones you're most comfortable with, or revise them to fit your style:

My salary history and expectations are in line with my professional achievements, experience level and the requirements of the position under consideration.
Due to the sensitive nature, I prefer to discuss salary in a personal meeting.
Although I considered my salary at Company X appropriate for my years of service in the industry, I am aware that compensation in other industries may vary widely.
I am reluctant to discuss my previous salary, because I am concerned that you may decide whether or not to consider me for this position solely based on money, and as I have said…
Since I am not aware of how this industry’s positions are evaluated, would you be willing to share the salary range for this position with me?
Although money is important to me, I recognize that the current economy may have affected salary ranges. I am sure that if you believe I am the right person for this position, salary will not be an issue.
I am hoping to find a challenging position where I can use my experience. A base salary will only be one of the criteria I will use in evaluating opportunities, so I prefer to wait until we’re further into our discussions to talk about salary.
I am primarily interested in the responsibilities of the job, and feel that after those are explained we can discuss salary.
I am at a point in my life where money is not the most important criterion, and I prefer not to bring it into our discussion at this early date.
Although I was paid well at Company X, it is now part of my past. I prefer to pursue any salary questions by understanding this company and how your positions are evaluated.

Closing Negotiations - Receiving the Initial Job Offer

Once you receive the initial offer, make sure to thank them for the offer and show your excitement for the opportunity. Next, clarify the position and responsibilities, clarify the salary and benefits, request additional information if needed, and express why the company and the job are appealing to you. Make sure you have the offer in writing, and ask for time to evaluate and consider the offer. Don't provide a response at this time (leave your emotions out of this). You need to take time to think strategically so you don't respond emotionally.

Initiating the discussion

Call them back at the previously agreed time (or day). Communicate that you have thoroughly considered the offer, and express your excitement about the opportunity. Communicate that you both want a positive outcome and you believe you can work through the areas for a successful discussion. To help ensure a smooth discussion:

Indicate your areas of agreement
Discuss areas of divergence
Discuss alternative solutions
Resolve differences
Confirm the agreement
Accept the offer
Establish your start date
Ask for confirmation of the finalized offer in writing

Hopefully these techniques and suggestions that you have learned in this article will give you the tools and ability to negotiate at a high level and create win-win agreements.

Don't forget that the lessons you have learned here, are valuable during any type of negotiations, such as home, automobile, boats, cruises, or hotels. Negotiate Away!

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