The job market is the best it's been in 20 years. The Commerce Department
estimates that U.S. businesses will need to hire one million new computer
scientists, engineers, systems analysts and computer programmers by 2005.
Yet graduates with degrees in computer science are being produced at a fraction
of the rate needed. The Information Technology Association of America reports
190,000 current job openings for web experts and other information-technology
specialists, and similar shortages are cropping up in other industries as well.
These market conditions provide a great opportunity to negotiate an excellent
compensation package, but only if you understand how.
There are 11 basic commandments to help you negotiate the best possible deal
when changing jobs, whether internally or with a new company. They are:
- Be prepared. The more information you have about your market value
and the prospective employer, the greater your likelihood of success. This is
the first commandment because it's the most important. There's a wealth of
information available on the Internet, at the public library and through
professional associations and networking groups. Time spent learning how to
negotiate and preparing for negotiations may be the best investment you'll
ever make.
- Recognize that employment negotiations are different. When the negotiations
are over, you'll have to work with the person with whom you're negotiating.
Moreover, your future success may depend on that person. So, while you want
to negotiate the best possible deal, you need to do so in a way that doesn't
damage your image. At the same time, the employer's primary concern isn't
negotiating the least expensive compensation package it can get away with.
Rather, their focus will be on getting you to accept the job.
- Understand your needs and those of the employer. To be successful
in this type of negotiation, you need to examine your priorities. What do you
really want? Are you comfortable with a low salary and a large equity stake?
Are you able to handle dramatic swings in income from year to year? Understanding
your needs will also help you determine the type of company you want to work
for. For example, a family-owned company may be able to offer a competitive
salary and a large bonus based on results, but may not be willing to offer
significant equity to a non-family member. A start-up company, on the other
hand, may not be able to offer market salary, but will typically offer stock
options. By recognizing what an employer can and can't do, you'll be able to
determine what issues you should press.
-
Understand the dynamics of the particular negotiations. Sometimes you'll
have skills that are in great demand. And sometimes, you may be one of several
qualified candidates the company would be happy to hire. Sizing up the situation
and understanding the relative position of each party will help you determine
when to press your advantage and when to back off.
-
Never lie, but use the truth to your advantage. It's not only wrong to lie,
but in employment negotiations, it's ineffective. If you lie during negotiations,
sooner or later you're likely to be caught. Once you are, even if you don't
lose the offer, you'll be at a tremendous disadvantage, and your credibility
will always be suspect. On the other hand, total candor won't be rewarded.
You're under no obligation to blurt out everything you know. You can determine
what you want to say and how you want to say it, and try to put everything in
its most positive light. One key element of your preparation should be to
recognize areas of concern so you can rehearse how to handle them when they
inevitably come up.
-
Understand the role fairness plays in the process. The guiding principle
for most employers when negotiating is fairness. Within the constraints of
their budget and organizational structure, employers usually will agree to
anything that's fair and reasonable to hire someone they want. Appeals to
fairness are your most powerful weapon. Thus, you should be able to justify
every request you make in terms of fairness. For example, if other computer
programmers in similar companies are being given sign-on bonuses, you should
expect to be treated no differently. Your prospective employer will want you
to accept its offer and feel that you've been treated fairly. Understanding
the importance of fairness as a negotiating principle can make the difference
between success and failure.
- Use uncertainty to your advantage. The more information you convey to
a potential employer about your bottom line, the more likely it will limit
what you get. Before making an offer, a company typically tries to determine
what it will take for you to accept the position. With that information, the
prospective employer will be able to determine the minimum package it needs
to offer. While they may not offer you as little as they can get away with,
if you've divulged too much information, they likely won't offer you as much
as they might have otherwise. By not disclosing exactly what your current
compensation is or exactly what it would take to get you to leave your job,
you'll force a potential employer to make its best offer.
- Be creative. Consider the value of the total package. Look for different
ways to achieve your objectives. Be willing to make tradeoffs to increase the
total value of the deal. If you're creative, you can package what you want in
ways that will be acceptable to the company. You'll also be able to find
creative "trades" that allow you to withdraw requests that might be problematic
to the company in return for improvements in areas where the company has more
flexibility. That way, you can maximize the value of the package you negotiate.
-
Focus on your goals, not on winning. Too often in negotiations, the act
of winning becomes more important than achieving your goals. And it's also
important not to make your future boss feel as if he's lost in the negotiations.
You'll have gained little by negotiating a good deal if you alienate your future
boss in the process.
-
Know when to quit bargaining. The one sure way to lose everything you've obtained
is to be greedy. There comes a point in every negotiation when you've achieved
everything you could have reasonably expected to gain. While most companies
will want to treat you fairly and make you happy, few companies want a to hire
a prima donna. Being perceived as greedy or unreasonable may cause the deal to
fall apart. Even if it doesn't, you'll have done immeasurable harm to your
career. This brings us to the 11th and most important commandment:
-
Never forget that employment is an ongoing relationship. Job negotiations
are the starting point for your career with a company. Get too little and
you're disadvantaged throughout your career there; push too hard and you can
sour the relationship before it begins.
Understanding these principles will allow you to effectively negotiate the
terms of your new job. Then do your job well and continually seek out new
challenges. As you take on added responsibilities and learn new skills, there
will be opportunities to negotiate further improvements.