COMPANY ATTITUDES TO SALARY NEGOTIATIONS

Salary negotiations can be a potential minefield. If you have been interviewed via an agency or head-hunter, this is where they take the stress out of job-hunting for you, as they should do the negotiating between you and the employer. But if not, you face this yourself. Candidates often feel concerns about pitching their requirements too high, and not getting the job, or selling themselves short and not being paid what they are worth or what might have been on offer. Let’s start by taking a look at how companies view salary negotiations.

Job offers are not easy for companies to arrive at. In general, although there are many ways they arrive at a figure to offer you for a particular, these tend to fall into two broad categories, which we will call competitive offers and opening offers.

Competitive offers

A company making competitive offers analyses the employment market and what they already pay other employees doing similar work. They may find out what rival companies are paying, or benchmark their own salaries to the outside market. They might have a specialist in personnel or human resources who specialises in ‘compensation and benefits’. When they arrive at an offer to make to a candidate, they attempt to be competitive.

How offers are arrived at

Offers are made based on the fact that they are:

• competitive
• fair salary or wage for the job
• fair to the individual
• more or less the best they can offer.

There is no conscious effort to make a low offer to save money or get a bargain by hiring a candidate cheaply. They believe in paying people adequately for the job and that, if they do not, they are at risk of losing their people to competition.

What this means for salary negotiations

Such companies can view salary and offer negotiation as unpleasant, distasteful or even bad manners. When dealing with a company with this approach, excessive attempts to bargain over salary are usually viewed poorly.

Opening offers

A company making opening offers tends to have the view that negotiation over salaries on joining the company is perfectly normal and expected. This may either be a company attitude, or just the viewpoint of the manager hiring you.

How offers are arrived at

Companies which expect you to try to negotiate a higher salary with them are highly unlikely to make you their best offer straight away, are they? They may be trying to get a bargain, by trying to employ people at as low a cost as possible, but this is not always the case. Often, they have experienced making what they believe to be a fair offer, in the past, and lost candidates who wanted to negotiate a higher sum which they could not afford.

Basically, an initial offer might be based on:

• The lowest amount they think they could get away with.
• The bottom figure of the salary quoted in an advert.
• The same amount you are being paid in your current job.

What this means for salary negotiations

Whatever the figure, this is unlikely to be their real offer; it is simply an opening offer which they expect you to respond to. Their idea is that they will negotiate and achieve a salary that both sides think is fair. Failure to negotiate with a company like this means that you will sell yourself short, and also potentially lose respect from your new boss before you even start.

How can you tell which offer it is?

With one approach, the offer is fair and probably not negotiable by much, if at all. Trying to negotiate may be viewed negatively. With the other approach the offer is negotiable, and negotiation is fully expected. Not negotiating may be viewed negatively. So how can you tell which is the case?

By research. Before you got to this stage you should have gathered salary information. So when you are told the salary offer, you will know whether it is fair or not – do your homework, it’s that simple.

Sources of salary information

• If you came via an agency, the agency must have had some idea of likely salary.
• If you responded to an advert, that will probably have shown a salary or range for the job advertised.
• You should check with online recruitment sites, papers and magazines, and agencies for typical salaries for the job in question.

Company concerns about candidates

Believe it or not, some companies do have worries of their own when making a job offer. They have their own concerns about you, and how the offer will be perceived by you. Others don’t have the same concerns, but it is useful to see how their thinking sometimes works.

• Some companies are concerned that if they offer too low a salary they may look bad, and it could affect their reputation in the marketplace. This is especially true if they are considering a candidate currently working at a rival company, a competitor or even a client of their company.
• If a company is still concerned about whether or not you would actually take the job, they may be nervous of making the offer. They may well have had their fingers burnt in the past by making an offer which a candidate then went on to use as a bargaining tool internally, to secure a pay rise with their current employer!

THE MOST COMMON MISTAKES IN SALARY NEGOTIATIONS

Most employers will not discuss the issue of pay until they have decided to hire you. It is important you do the same.

Lack of preparation

• Showing your current salary on your CV or an application form.
• Not researching market salaries for the type of work concerned.
• Not having the facts – not knowing your current salary and benefits details.
• Not knowing what you are worth.
• Not knowing what you want or need to earn.

Incorrect attitudes

• Assuming that the employer will know the fair salary for the job.
• Assuming that salaries are predetermined by employers, so there’s no point trying to negotiate.
• Thinking that just because you’ve been offered the job now, the employer won’t change their mind.
• Thinking that if they have offered you the job, negotiation will be easy as they won’t want to lose you.
• Being greedy.
• Taking things personally – a salary should be for a job, not a person.
• Feeling embarrassed about negotiating – it’s natural to feel that way and the employer probably feels embarrassed too!

Giving away too much information

• Not knowing how to handle questions about salary.
• Giving away too much information.
• Giving a single figure when asked what salary expectations you have.
• Telling the employer about your needs, not theirs.
• Not establishing your value before you discuss your worth.
• Prematurely discussing salary before gaining information on the job requirements, or before communicating your qualifications and value to employers.
• Lying about your current or previous salary.
• Saying yes or no straight away.

Lack of skills or experience

• Not knowing how to negotiate.
• Not understanding benefits as part of a compensation package.
• Projecting an image that isn’t in line with the salary you want.
• Negotiating salary or benefits by telephone.
• Being too quick to accept an initial offer.
• Being afraid to take your time, or to use timing to increase your value.
• Not allowing room for negotiation.