When approaching any negotiation–especially one as consequential as a salary negotiation–it helps to go in with a plan. Because you can’t technically plan out an entire negotiation in advance, this preparation process is all about ensuring you have the information required to be flexible, thereby yielding overall positive outcomes for yourself and your career without undue regard for exactly how those outcomes are shaped. Keeping your expectations in check and understanding which aspects of your compensation matter most to you are key here.
Conduct Basic Preparation
Moderating your expectations and understanding which aspects of your salary and benefits are most important to you starts with developing a general understanding of norms (salary range, summary of typical benefits package) for the organization and industry in question. Realistically, it’s unlikely that you’ll be able to secure compensation that is significantly better than the historical top-end levels for an organization/industry, so understanding the limitations can ensure you negotiate within the realm of possibility, thus maintaining your credibility. Moreover, being aware of compensation norms also prevents you from unknowingly accepting a substandard offer. During preparation, your goal should be to determine your best-case scenario and your minimum acceptable offer, including any relevant non-salary components. Finally, it’s important to remember that, in a negotiation, you should come prepared to address pushback – often in the form of tough questions – from the hiring manager. If you’re making a case for why you should earn higher-than-average compensation for your role, be prepared with facts and stats from your employment history which demonstrate your ability to deliver above average value.
Consider Compensation Holistically
Both to maximize your room for negotiation and to fully understand your own needs and priorities, it is important to consider all the salient elements of the compensation packages you’re offered. In addition to the base salary, these could include a bonus, commission, sick and vacation time, the potential for flexibility (working from home, etc.), subsidized career development and education, insurance, retirement accounts, mileage/parking allowances, travel, and other perks. Some of these may matter very little to you, while others could be considered ‘deal-breakers’. Identify your priorities in advance – if you’re not being offered a benefit you find very valuable, this may be grounds to negotiate for improved compensation in another area (especially if what’s at issue is a common perk offered by other organizations with which you’ve engaged in hiring negotiations).
Factor in Timing
That brings us to our third point: timing. This section is particularly important if you’re considering multiple positions simultaneously. To maximize your potential for a successful salary negotiation, consider your relative interest in each opportunity and how this affects the order and/or pace at which you should allow them to unfold. For instance, it would be less beneficial to receive an offer to the job you’re most interested in first, because this would put pressure on you to conclude your job search prematurely. This recalls the secretary problem, in which a decision on whether or not to hire a candidate must occur after every interview – with the end goal of choosing the optimal candidate. Despite the fact that the secretary problem possesses an ‘optimal solution’ supplied by the Odds algorithm, following the math shows that if the best candidate happened to have been the first to interview, he or she would still never have been hired. Similarly, each prospective employer will press you to come to a decision once you’ve received an offer. It’s important that you aren’t left with the need to rule out a great offer simply because it comes well in advance of other offers you’re competing for or expecting to receive. As in the secretary problem, determining the best choice for you likely requires multiple points of comparison. What’s more, it’s always helpful to have competing offers on the table when you’re negotiating. These offers can function as leverage, allowing you to potentially secure a higher salary or better benefits in addition to the chance to work for your preferred organization. To summarize, it is best practice to steer your opportunities toward a simultaneous conclusion, thus eliminating the pressures of the secretary problem and maximizing your leverage from competing offers.
BONUS: Request an Accelerated Performance Review
Even if you believe you’ve made a good case for the compensation you’re seeking, your prospective employer may sometimes still conclude that it’s more than your experience warrants. If your negotiation reaches this point, requesting an accelerated performance review could help you to reframe the impasse as an information problem that you can address in a relatively short time frame, given a chance to demonstrate your aptitude for the role. Your accelerated performance review then becomes your opportunity to renegotiate for a higher compensation level that is more in line with your initial goal, assuming you’ve delivered your promised performance.