Salary Negotiation for a “95-98% Good Fit”
by William S. Frank, President/CEO of CareerLab®
I just searched “negotiating” on Amazon and got 3,000 results, such as:
- Getting to Yes
- Never split the Difference
- Secrets of Power Negotiating
- Negotiating the Non-negotiable
And 2,996 more.
That’s a lot of contradictory advice: rules, tricks, and dos-and-don’ts. I’ve always read these kinds of books and found them helpful. If you have time to read, you can pick up valuable tips. However, your time is best spent getting to the right destination in the first place. It’s no fun negotiating a low offer in a bad company with the wrong duties and responsibilities, even if you know to “never spit the difference.”
It’s much more fun to be negotiating for a job that just ignites you.
Hard negotiators and high-powered leaders who think “it’s all about the money” will laugh at my point of view. They won’t find it tough enough. But I confess I’m a soft negotiator, go for win-win, and find that earns me and my clients some high dollar packages. Here are some things to think about when negotiating:
- First ask yourself: Is this the right position?
Often, when I question clients about why their job went terribly wrong, they say, “I didn’t trust my gut. Something inside was telling me I shouldn’t accept this offer, but I did.”
- How to negotiate when you can’t afford to lose an offer.
There are times when one needs a job badly. For example, when you’ve been unemployed for a long time, financial resources are dimming, you have children to feed. It’s times like these when any offer is a good offer. But suppose a company offers to pay you far less than your worth. You realize you need more, but the offer is tenuous, and you don’t want to lose it by asking for more. What do you do?
Here’s a strategy that I’ve used in my consulting practice and that many of my clients have tried successfully:
A molybdenum mining company called me to lead a third outplacement workshop, this time in Nevada. I’d worked for them before. They were moving an accounting group to Utah and 30 people would be laid off. The general manager offered me $1,500 per person for a three-day workshop.
Here was my thinking: the fee was lower than I wanted, but in the consulting world some projects pay extraordinarily well, others just enough. I wasn’t desperate, but needed the assignment to keep the company’s cash flow going.
Step one: I accepted the assignment. I said, “Jake, I’ll do the project, I can be in Nevada on the 15th, and I’ll meet you at your corporate headquarters tomorrow as planned.” Here’s the key: in situation where you want the job, but the pay is too low, you have to accept the job or assignment 100%, leaving no doubt that you are onboard. This is critical.
Step two: After I accepted the assignment and we made specific plans to get started, I added a footnote: “You know, Jake, I’ve accepted the assignment and will begin on the 15th, but I do have a question about the compensation. You’ve offered $1,500 per person and the market for this three-day workshop is more like $2,500 per person. Is there any way you can meet that?”
Short pause. “Sure, we can do that.”
So I went from earning $45,000 to $75,000 for three days just be explaining market rates. It’s hard to go wrong by framing your salary discussion around market rates. The truth is, most employers want to be fair.
- And that’s another strong appeal: appeal to fairness.
Say an employer has offered you a $250,000 base salary and you want $300,000. You can accept the offer as it stands, and then appeal to fairness, like this:
“Sandy, I’m accepting your offer as CFO and will begin on the first of the month. Everything is a go. I couldn’t be more excited to get started. However, I do have a financial concern. (You give an example or two related to your situation.) My elderly parents are in assisted living in California, Mother will soon be moved to memory care, and I need to visit them twice monthly to insure their care. My son, too, is entering medical school and that will be an expense. You’ve offered $250,000 as a base salary, but the market is closer to $300,000. Can you improve the offer to $300,000? That just seems fair. And I only want to do what’s fair.”
The answer to this question is yes or no. Either the company can bump the salary up, or tweak the total package, or they can’t. In either case, you haven’t lost the job offer by over-negotiating.
In my experience, most sought-after employers, especially those who want employee engagement, want to do what’s fair. They want a win-win and don’t want to hire a leader who feels underpaid.
- There’s a danger in over-negotiating, in playing hardball.
Take the same case: the company has offered $250,000 and you want $300,000. You imply, or say directly, that you can’t accept until and unless to organization agrees to $300,000.
There’s a silence.
They go away to think about it. They come back and say, “We appreciate your candidacy, Tim. We think you’re the best person for the job. However, we’re going a different direction. We’ve hired Tamara McDonald to take the role and she’s starting Monday.”
Or, almost worse: they reluctantly meet your $300,000 number. The company can’t afford it, but they need your skills right now. You’re paid higher than your peers, some of whom were founders of the business. There’s a resentment internally because you’ve overstepped fairness and team play. You have demanded a number. They have acquiesced, but it’s not a win-win.
The company puts you to work, but immediately says, “Let’s keep our eyes out for someone a little less arrogant to replace him/her/them as soon as practical.”
Now, you’re under a microscope.
You’re on the razor’s edge. They tap your brain and lean on your experience. It’s critical for them right now. But as soon as they find a suitable replacement for you, you’ll be in a no-win performance improvement plan with an executive coach, or out the door entirely.
You negotiated hard, just too hard.
- My experience is all about negotiating for the “95-98% good fit.”
If you’re following your Career Blueprint, if you’re in the right place at the right time, compensation isn’t much of an issue. Employers have a salary structure related to their industry, geography, and size of the business. They benchmark that against other similar organizations. They can’t or won’t go too far outside the bounds of that structure.
If you’re in the right place, the salary will be in the ballpark, partly because the Career Blueprint spells out compensation as a category. We wouldn’t consider companies outside the needs and must-haves on the blueprint. You won’t be interviewing with companies that don’t fit.
When you’re interviewing, it means the job you’re pursuing will likely pay near your requirements. Everything aligns.
- A key is that you understand market rates.
It’s like buying a car. If you don’t know the fair price, you can be taken advantage of. The best of all worlds is that you have several job offers and compare them against one another. That’s why I’m a fan of overmarketing: doing more than you need to do. Sending more email, making more phone calls, writing more thank you notes, doing more of everything. Because the goal is not a job offer. The goal is several offers to weigh against one another.
That makes negotiating much easier, because then one can say: “You know, Nancy, I really appreciate the offer and look forward to working together. This role combines all my skills, experiences and characteristics in a career spent at the intersection of science and society. It’s a perfect fit and GreenEnTech is my first choice of employer. However, I have had a second offer that is 10% higher than yours with a better long-term incentive. Is there any way we can revisit your numbers?”
- Let’s talk about bringing offers to closure.
One of my candidates had a good offer from Company A, but really wanted to work for Company B, her ideal first choice. Company B wasn’t ready to make a hiring decision for several weeks, though, and told my client that key decisionmakers were at a conference in Amsterdam, weren’t taking calls, and wouldn’t be returning to the U.S. for ten days. Wanting to nudge the offer, the candidate told the company:
“Randy, I understand you have hiring processes and procedures, and I don’t want to upset your timing. You should proceed at your own pace. However, I do need to let you know I have a comparable offer from Company A, and they expect a decision in five days. As I said, I don’t want to rush your process. I just think it’s fair for you to know you’re still my first choice.”
Guess what happened?
Mysteriously, within a few days, the traveling leaders who couldn’t possibly be reached made my client an ideal offer, which she accepted. I’ve experienced time and again that when it’s right, it’s right. Everything comes together.
- Benchmark against the market and also against competing offers.
Getting even one offer that’s a “95-98% good fit” is a home run. Two great offers is better, and more than two is fabulous, because it allows us to compare and contrast, and to negotiate from strength.
One of my clients who followed the “Career Transition Roadmap” from A-to-Z received four offers in a $300K to $500K range. He took the highest offer which was also the “95-98% good fit,” was quickly promoted to Vice President and stayed with the organization for five years, before beginning a new adventure.
- I’m going to end by going back to the beginning.
Are you interviewing and negotiating for the right position? If not, go back to the “Career Transition Roadmap.” Pick up where you lost clarity or momentum. What is your focus? Where do you fit? And are you following Peter Drucker’s mantra: “Do first things first and second things not at all?”
If you’ve slowed down, pick up the pace. Over the years I’ve had many candidates who were “doing all the right things.” They just weren’t doing them fast enough. They didn’t reach critical mass, nothing caught fire, they stalled.
When interviewing and negotiating, we’re in a little bit of a two-minute drill. (For those who don’t understand or even like the football analogy, a two-minute drill is a plan for the last vital seconds of a football game, where you have to put it all on the line, or lose.)
Always interview and negotiate for a good fit. It may not be 95-98% perfect, but it must be in the ballpark, or at least a stepping stone in the right direction.
As I said before, when I ask clients why their job went terribly wrong, many say, “I didn’t trust my gut when interviewing. Something inside was telling me I shouldn’t accept this offer, but I did.”