I get asked a lot of questions about salary negotiation. New job offers, internal promotions, annual increases … there still seems to be a lot of discomfort out there when it comes to negotiation. I can totally see why too. Whenever I’m in the middle of a salary negotiation, I can’t help but wonder:
How hard should I be pushing?
How do I know when I’ve got the best deal available to me?
Am I coming off as difficult or uninterested?
Is the employer going to get annoyed and withdraw the offer?
As hiring managers, we don’t make things easy either. We almost always position offers with language designed to make it feel uncomfortable to open negotiations. The “assumptive close” is a term you’ll hear managers use to describe it. Did you ever notice job offers almost always come with a message that reads like this?
“Congratulations Jim, we are so happy you are joining our team. Please sign, scan and return the employment agreement attached to this email at your earliest convenience …”
This kind of language is designed to make it hard to counter. It makes you feel like you’ll be disruptive if you don’t sign it as is. That it will be a great inconvenience if you start negotiating at this point after they’ve presented this pristine employment agreement and seem to be so happy you’re coming on board. It makes you feel like to negotiate now would send a negative message. Don’t fall into this trap.
Whether we all admit it or not, the assumptive close is a tactic employers use to make you take the first offer. And so many of us do. We worry that to negotiate could put the whole offer at risk. We imagine how angry they’ll get if we counter. We tell ourselves that we’ll perform well in the first year and then push for a salary increase later. Or we convince ourselves that it’s not worth it to fight for a few extra dollars if it could mean upsetting our future employer. Many of us, especially early in our careers, find reasons not to negotiate.
Today I’m going to focus specifically on the tactics I use to negotiate hard BUT also keep things friendly. Once you’ve mastered the art of positive negotiation, any fears of upsetting your current or future employer will be controlled and you can confidently push for the best deal without worrying you’re putting the relationship at risk.
There are three things I try to do whenever I’m negotiating that are designed to keep things friendly and positive while helping me get the best deal possible. These tips can be applied to just about any type of negotiation but I’m using the new job offer scenario today.
Communicate your intention to find a “win-win” outcome
The most important concept in negotiation is to pursue the win-win. Everything builds from this mindset. You always need to put yourself inside the mind of your negotiation partner and try to find a way for them to win also. When I’m negotiating I always verbalize my intention to find a win-win outcome at the beginning of the process. I don’t think it’s enough to just think about a win-win, you need to also say it.
Whether you’re negotiating on the phone or in person or over email (which I prefer), I recommend taking a moment to clearly articulate that you’re trying to find an outcome that gives everyone a win. I’ll often write or say something like:
“I’ve very grateful for the offer and excited at the prospect of joining the team. I’m hopeful we can find a compensation package that works for everyone …”
In my experience, this little phrase, “works for everyone,” can be extremely powerful. It is an effective device for keeping things positive and letting your future employer know that you are on the same team and have the same ultimate goal – to start a positive relationship together. Next time you’re negotiating, try adding “win-win” language into your communication.
Demonstrate flexibility and present options
Negotiations often become contentious when one or both parties appear to be stuck in a binary position. A yes or no, win or lose, all or nothing situation. In economics they call this a zero sum game. You never want your negotiation to land in this place. For example, if my future employer offers a base salary of $50,000 and I want more than that, the wrong thing to say is, “No, I want $55,000 ...” What I try to do, right from the beginning, is to provide multiple paths to a win.
Whether you realize it or not you’re architecting a binary decision which is unlikely to result in an optimal outcome for you. You’ve placed the employer in a situation where they can either say “yes” or “no” to this, or counter with something other than what you want. In my experience this type of negotiation approach rarely ends up with you extracting maximum value and can often lead to an impasse.
My recommendation is to present multiple paths to reach an outcome you’d be happy with in a manner that gives your future employer some flexibility or incremental value. The key to executing this strategy is to take advantage of a wider variety of compensation mechanisms including base salary, performance bonuses, sign on bonuses and stock options. Too many of us fixate on base salary and end up creating negotiation scenarios that are more difficult than they need to be. This is level one negotiating. Level two negotiating is about creating a package of negotiation options so the employer can pick and choose and customize a revised offer that gives everyone a chance to win. For example, rather than counter a base salary of 50K with 55K, I would say something like:
Thank you very much for the offer. I am extremely excited for the opportunity to work with the company and I’m confident I can make an immediate and positive contribution. In terms of compensation specifically, I’m hoping we can find a way to create a package that is more in line with my skills and experience, and that can work for everyone. I would very happily execute an offer that contained the following amendments:
Base Salary: $52,500
Annual Performance Bonus: $5,000
Sign on Bonus: $2,500
By presenting a package like this you've done a bunch of very good things. First off you’ve given yourself a chance at the home run i.e. that they give you everything you’ve asked for, which in this case goes far beyond the 5K increase you would have otherwise requested. Secondly, most of the increase you've asked for is in the form of bonuses which are contingent on you achieving a certain level of success. This takes the risk out of the equation for the company and gives you the chance to earn more money. Lastly, this gives the employer the chance to reject parts of your counter while still giving you a win i.e. They can reject the sign-on bonus and the base salary and you still end up with 55K or they can reject the performance bonus and you also end up with 55K. There are many more paths to success with this approach.
One final detail to mention – notice in my example message that I don’t position this counter offer as an ultimatum. I only say how happy I would be to execute the offer if certain things were amended. I make no mention at all of what I might do if they don’t acquiesce. This allows me to stay confident in my negotiation strategy and not worry that they might walk away. My worst case in this scenario is that they’ll say no to the changes I proposed and I’ll have to stick with the original offer. Whereas if I had framed it as “I can’t accept this offer because of xyz,” I’d be introducing a bunch of risk into the equation unnecessarily. Stay positive and don’t make ultimatums.
Next time you’re in a salary negotiation, try presenting options like this vs. countering with a binary proposal. I think you’ll be pleased with the outcome.
Stay positive, reaffirm interest and value
Just because you’re in negotiation mode doesn’t mean you can stop selling yourself. It is important when you’re pushing for greater compensation, to continue to reaffirm your interest and fit for the position. Ultimately, your employment is an exchange of value – you get compensation and the employer gets your contribution. It’s important to keep selling your value until the deal is done so the basic fundamentals of the value exchange remain intact.
It should also go without saying that you need to stay upbeat and positive in every dialogue with your future employer. Do not get emotional or upset. I’ve seen offers pulled because a prospective employee got angry and weird in the negotiation. There is a magical place you should be striving for where you are negotiating hard but also being kind and gracious and friendly with your negotiating partner. Ultimately you want them to be exhausting every option to make your hiring possible. You want them on your team. It shouldn’t feel like a battle between adversaries but rather a challenge you’re undertaking together.
“How can we find a way to make this work for everyone?”
“What can we do to get me a little more guaranteed income while taking some risk away for you?”
It’s very important to stay positive in a negotiation and to continue to confirm the fundamental value exchange that got the employer to make the offer in the first place. I try to find opportunities throughout the process to reaffirm my interest and value and to act as a partner with the hiring manager or recruiter rather than an adversary.
One of the main reasons people avoid negotiation is the fear of losing everything or damaging a relationship as a result of it. I use these tactics to make sure that never happens to me. I hope you can put them into your negotiating game plan so you can negotiate hard without coming off as a jerk.