What if, by tuning into this podcast episode, you could learn how to negotiate a job offer like a seasoned pro? Welcome onboard, Career Conquerors! I'm Njsane Courtney, your host, and ally in this exciting journey of professional growth. Together, we'll unravel the art and science behind successful negotiations, and discuss why nine out of ten times, you should never hesitate to negotiate.
Imagine having the confidence to discuss not just your salary, but also medical benefits, bonuses, and vacation time! We'll shed light on these often overlooked components of job offers, equipping you with the knowledge to negotiate your way to a wholesome and satisfying job offer. This value-packed episode is your guide to understanding every aspect of a job offer and how to negotiate each one effectively. Remember, the key is to see the offer in its entirety, not just the base salary.
While professional growth is essential, let's not forget the importance of self-care and personal wellness. Your job should be a support system for your life, not the other way around. So, let's journey together towards a career that serves you and not just your bank balance. Remember, you're not alone in this journey - feel free to reach out with any queries or thoughts. Let's conquer our careers together, one episode at a time!
What if, by tuning into this podcast episode, you could learn how to negotiate a job offer like a seasoned pro? Welcome onboard, Career Conquerors! I'm Njsane Courtney, your host, and ally in this exciting journey of professional growth. Together, we'll unravel the art and science behind successful negotiations, and discuss why nine out of ten times, you should never hesitate to negotiate.
Imagine having the confidence to discuss not just your salary, but also medical benefits, bonuses, and vacation time! We'll shed light on these often overlooked components of job offers, equipping you with the knowledge to negotiate your way to a wholesome and satisfying job offer. This value-packed episode is your guide to understanding every aspect of a job offer and how to negotiate each one effectively. Remember, the key is to see the offer in its entirety, not just the base salary.
While professional growth is essential, let's not forget the importance of self-care and personal wellness. Your job should be a support system for your life, not the other way around. So, let's journey together towards a career that serves you and not just your bank balance. Remember, you're not alone in this journey - feel free to reach out with any queries or thoughts. Let's conquer our careers together, one episode at a time!
Welcome Career Conquerors to my friend in HR, your one stop shop for all things related to career fulfillment and the elusive world of human resources. I'm your host and friend, jasani Courtney. I also want to welcome you to the final episode of this three part series aimed at providing you with winning strategies for obtaining that next opportunity. In part one, we talked about the do's and don'ts in the application process. Part two discussed how to ace that next interview and now we're at the final stage. We obviously have done well in the first two stages because, guess what? Hr is now calling you to extend you an offer of employment. First off, congratulations. This has probably been a nerve wracking process for you. However, you have weathered the storm and now it's time to reap those rewards. But how do you know if that reward is sufficient? How do you know if the package they're offering you is competitive? Is there room to negotiate? So I'm going to start this critical discussion by answering the last question first.
Speaker 1:When it comes to whether or not you should negotiate nine times out of 10, the answer is a resounding yes. 90% of the time. You should always, always, always negotiate. Now that I've said that you should always negotiate and this applies to 90% of the time. What does the other 10% look like? When can't I negotiate?
Speaker 1:Before I give you specific scenarios, and with negotiation is typically not possible. I'd like to start by saying this Nothing is always absolute. What I'm going to describe next are general scenarios where salaries and benefit packages are well defined and typically aren't up for much negotiation, but I will be generalizing. There are always rare one-off occasions where this may be possible, and this is a global audience. I would be remiss if I didn't recognize that this can vary wildly from country to country. The first scenario where negotiation isn't typically a standard practice is in the area of education. Now, some teaching salaries may have some level of salary negotiation, but in many cases, especially in the United States, educators are extended employment contracts on a year-to-year basis, and those salaries are usually determined by a publicized salary chart. I am aware, however, that there are scenarios where teachers who have the ability to teach abroad, like in China or the Middle East, negotiating your salary can be a possibility.
Speaker 1:Entry level jobs are another area where there is very little leverage to negotiate. A number of government positions have standardized salaries, so in many of these cases, your negotiating power is very limited. Typically, the higher the position within a company, the more leverage you have to negotiate. Now the next thing I want to cover is fear and apprehension. Before we dive into negotiating tips and tactics, we have to overcome the biggest obstacle, which is our fear that if you dare to negotiate, that you will lose this opportunity. When you compound this natural fear with the fact that most of us have not been exposed to the basic negotiating skills, it's no wonder why most of us simply take the offer that's given and celebrate the fact that we have a new job. So let's tackle that drag and head on First.
Speaker 1:In my 21 years of HR experience, I have never seen an offer get pulled just because the candidate tried to negotiate, and I mean never. What I have seen are candidates taking an overly aggressive approach in their negotiations, and so now the people, according to lots of 64 year senior candidates for counseling, get into a bit of a back-and-forth with the recruiter or hiring manager and then sometimes, under those circumstances, the offer is retracted. But if an employer takes back their offer of employment simply because you dare to negotiate, trust me, you did not want to work there in the first place. If there is a boss out there that feels that their employees should be grateful for whatever scraps of compensation they deem worthy. Trust me, it's not a healthy work environment that you want to be a part of, so you should see that as just dodging a major bullet. Now let's talk about why it's very unlikely a manager will retract an offer if you attempt to negotiate and this is going to be more of those behind the scenes, behind the enemy lines insight that I'm going to share with you.
Speaker 1:Look at this scenario from the hiring manager's perspective. By the time they get to the offer stage, they've interviewed dozens of potential candidates and invested countless work hours. In many cases, the opening that you applied for may have been vacant for a number of weeks or months. This means that somewhere, some poor employees had to pick up the slack and work some ungodly hours. All that equates the cost. There is a cost to the company for having that position vacant. That cost comes in the form of extra overtime of the current staff. They have to pick up the extra duties for the vacant position. There is also opportunity costs for the manager's time that was invested in this process. This all comes down to money. So let's do a quick and dirty calculation to give you a better idea of the cost to the company if they chose to retract your offer.
Speaker 1:So let's say that a sales manager has an opening for an account manager. There's gonna be math involved, so, but fortunately I've done the math for you. The sales manager makes about a hundred thousand dollars a year. Let's say the recruiter has presented them with about 12 candidates to interview and each interview probably took about an hour. So when you break down the manager's salary on an hourly basis for that, one round of interviews costs the company about $576. Wait before you start to say that's not a lot of money. Hang on, because there's so many more levels to this. Now, how often is there only one round of interviews? And again, we just said that they interviewed 12 candidates during the first round. So the manager narrows it down to six and brings those candidates in for another hour-long interview and oh, by the way, they brought an appear to do the interview as well. So that's another 576 bucks.
Speaker 1:We've now gotten to the last round and they'll probably bring in their boss. And let's say their boss makes about a hundred fifty thousand dollars. It interviews the top three candidates. When you break down his salary, that's about another two hundred sixteen dollars worth of time and again. Yeah, we're not looking at a ton of money yet, but let's not forget that trustee recruiter who has been sourcing the internet to find the best candidates for this position. Remember that for typically every ten phone screens you might find one candidate, and to make it to the first round of those 12 candidates would probably cost them about $2,163, assuming a salary of seventy five thousand dollars for that recruiter.
Speaker 1:But wait, there's more. Just because this position is open doesn't mean the work isn't getting done. So let's say that two account managers are working overtime and they both make about seventy five thousand dollars a year. So in overtime in the US that would be about fifty four dollars an hour. And let's just say, for the sake of discussion, they've been working ten hours of overtime each per week for the last two months. That comes out to be a whopping $8,640. So with these abbreviated costs, the company has already accrued about twelve thousand dollars just to find you.
Speaker 1:You also have to take into account Opportunity costs. So while all of these senior sales managers are interviewing, they're not out there selling business. So the company is missing out on potential sales and profits because those leaders have to focus their time on non-sales related activity. That could amount to thousands of lost dollars. You also need to take into account that it usually costs a company about one and a half times the salary of a job to hire and retrain.
Speaker 1:So if we assume that the salary of this position is about seventy five thousand dollars, one and a half times that is about a hundred and twelve thousand dollars, do you see how these numbers begin to add up? And, better yet, do you see how extremely cost and effective it is for a hiring manager to get to this stage, only to retract the offer because you dare to negotiate? Let's not even speak of having to restart the recruiting process. One word of caution, however. If you and the recruiter and the hiring manager have agreed upon a certain salary earlier in the process, it can be really bad form to ask for money. If they actually offer you the salary that you initially asked for, you may get it, but it's definitely not the best way to start a relationship with your new manager and, as I've said at nearly a dozen times in the last few episodes, we are going to have a long-term perspective. So it's not just about getting as much as you can. It's about cultivating relationships in addition to it getting a competitive compensation package. So it all adds up to that beautiful concept that we call career fulfillment. Hopefully, all of that made sense to you. So the point is don't be afraid to negotiate.
Speaker 1:Now that we've addressed some of your fears, let's talk about the different components of the offer and what you should be looking for. Number one, of course, is good old salary, or your hourly wage. Salary is how we live, it's how we pay our bills, it's how we afford summer vacations and Christmas gifts. So there's good reason why this should be the first consideration. I want to state again that the higher the level of the position, the more room you typically have to negotiate. In other words, a director or VP position has much more room to negotiate than, let's say, an entry-level IT professional. This also applies to the range of salary that you can try to negotiate. A solid rule of thumb that I typically advise candidates to start with when negotiating their salary is about 10% above what they've offered you. So if they offered you $100,000, 10% more would equate to be about $110,000.
Speaker 1:If you listened to the last episode, I mentioned the need to do your research on the market value of the position. This way you would at least have some starting point and a litmus test to determine how far off the offer is. In a lot of cases employers try to stay noncommittal about salary ranges and you may have some sort of idea based on some loose discussions you may have had with the cruder, but you really don't know what that range is. So let's say that you've done your homework and you determined the market rate for your city for that position is $75,000. However, the company has offered you $65,000. In this example the numbers aren't too far off and I was simply asked for the $75,000. Sometimes you'll get it, other times they might meet you in the middle at $70,000.
Speaker 1:Let's take another example. Let's say you've done your market research and you've determined that the position that you applied for should pay around $90,000 a year, but the company has offered you $65,000. That is a massive difference and in most cases, if $90,000 is where you want to be, there aren't a lot of tactics from a salary perspective that will overcome such a wide gap. Hopefully, if you've had enough conversations about the salary up to this point where this would not be such a shocker If you walk into a negotiation expecting $90,000 and the company offered $65,000,. There was definitely some level of miscommunication or the lag thereof.
Speaker 1:The next area I want to talk about are medical benefits, because this form of compensation goes hand in hand with your salary, and I'll explain why. You never want to accept an offer without looking at a company's benefit plans and their premiums. This is especially the case if you have a family and typically carry your dependents and your partner on your benefit plans. It does you absolutely no good to negotiate that extra $10,000, but your new medical premiums over the course of the year exceed that. You also want to take a deep dive and compare the coverage that you'll receive in comparison to what you currently receive. This is important because any shortfall or decline in coverage that you rely on will more likely come out of your pocket and again eat away at that increased salary you've just negotiated.
Speaker 1:Take a look at co-pays If you and your partner are considering having a family. Take a look at the parental benefits. Does the company provide maternity and paternity leave? Now, for our partners that are listening overseas, their mouths are probably wide open, because in many countries outside the United States, it's not uncommon for mothers to have 10, 12, or even 18 months of maternity leave, as in the case with Norway. In this respect, the United States falls woefully behind. Also, don't forget about checking out the details of your dental and vision coverage. Do you get a new pair of frames every year, or is it every two years? If little Tommy tends to lose his glasses and your benefits only include one new pair of frames per year, that extra cost could cost you hundreds.
Speaker 1:Now, unfortunately, there's typically nothing that could be done in terms of health care coverage. There's usually maybe one or two tiers of benefits that you can select from, but if you don't like your co-pay, you can't really negotiate a lower one. That's usually set in stone in the company's plan document. But what you can do is highlight these differences to your new potential employer and see if they'll be even more flexible with your salary. I've seen it happen time and time again. Now you'll have to crunch some numbers to determine what extra needs you have. But I wouldn't expect to get an extra $20,000 because your new employer's benefits suck. But if you've done a little bit of research and you determine that your premiums are going to cost you an extra $1,200 a year and it's probably going to cost you an extra $5,000 due to lack of coverage, $6,200 becomes a much more reasonable number to negotiate. I intentionally discussed medical coverage right after salary, because far too often many of us get so fixated on that salary amount that we don't realize that there's going to be other details that's going to eat away at that take home pay, and if you're not careful you could technically end up bringing home less than you are right now, even with a higher salary.
Speaker 1:Now let's switch gears and talk about bonuses. Causes are great, especially when they're actually paid out. There are all kinds of bonus plans. There are short-term incentive plans, there's long-term incentive plans, the performance bonuses commission the list goes on and on, but for the purposes of this discussion, I'm gonna limit it to a basic bonus plan that's associated with the company's performance. Normally, these bonus plans have a target percentage that's attributed to your salary. So if you're offered a bonus with a 25% target, assuming all the triggers or KPIs are met, your bonus would be about 25% of your overall salary. In some companies, these bonus plans are only offered to managers and executives. In other companies, every employee may receive some level of bonus. Typically, these bonuses are set on the position that you hold, but there are times when these bonus targets can be negotiable. If that's the case, I would go with an extra five or 10% and see what that goes. But to warn you, it's very rare that the company will double your bonus target, but you could find out simply by asking if this room will negotiate the bonus target.
Speaker 1:Also, in terms of bonus, you wanna ask a few key questions, such as how often are bonuses paid? You ask this question because you want to determine the likelihood that you'll actually get a bonus payment. Remember, bonuses are not automatic and they're not guaranteed. Usually, each company has to achieve a certain level of profitability. So if the company responds and says that they typically pay bonuses every year, great. Now there's a follow-up question you need to ask. The next question is whether the bonuses are usually paid out at full targets. A savvy HR person may try to use their Jedi mind tricks to say, well, bonuses are not guaranteed and they would be 100% correct. Again, they are not guaranteed. But historical payout information is a must for you to make a full, educated decision If they've not paid out a full bonus in over 10 years. Buyer, beware and I wouldn't necessarily include that in my full compensation number when making my final decision to accept the offer.
Speaker 1:You're also gonna want to take a look at those retirement benefits. Yeah, I know you whippersnappers All of you are gonna live forever in retirements a long ways away but trust me, your 65-year-old self will thank you if you just put a little bit of time into this effort. But please do look at the retirement plan and what they have they offer. So, for example, in the US, most companies offer a 401k. You definitely want to ask the following questions what does the company match? What is the investing schedule? A investing schedule is a timeline in which you eventually own all of the company match dollars. It's a typical aspect of a modern 401k plan, as it attempts to incentivize employees to stick around. Does it work? Meh, and again, I'm talking about 401ks, but those only apply in the US. Outside the US, you still want to take a look at what retirement benefits that company offers, and in many countries outside of the United States, many governments provide a pension scheme that employees pay into throughout their working lifetime, but some companies offer some additional pension benefits as well. This is another area where there's not a lot of negotiating room. However, the retirement benefits are definitely something to consider before you say yay or nay to that offer.
Speaker 1:Another variable to take into account is your commute. Now, you can't negotiate where your company's building is. However, if you're required to come into the office, you need to take into account how far that daily commute will be. Do you have to take the tube of the train? If you have to drive, how far is that drive, and do you have to pay tolls along the way? Over the course of the year, these costs can add up, and if they exceed what you're currently paying in your current job, this is another gremlin that eats away at any additional salary you just negotiated.
Speaker 1:Now let's talk about vacation. Now. I believe that, following the pandemic, most employees look at their vacation time differently than they did before the COVID outbreak. Work-life balance has become such a big part of our everyday lives, and this is critical when you look at negotiating. Here's a secret For many companies, especially in the US. The amount of vacation you can receive is heavily dependent on your years of expertise Again another area where the United States tends to fall woefully behind, as most countries in Europe offer at least 30 days of vacation, I believe. However, if you're in the good old US and you currently have three weeks of vacation at your current job, but the new company is only offering you two weeks. I will let the recruiter know that you're currently at a three-week standard and you would like to at least retain that level. If you want to go for the gusto, you can always say that you currently have four weeks of vacation and see where that goes, but make sure you have the experience to justify it. Employees will find it hard to believe that a worker with only five years of experience actually has four weeks of vacation in the US.
Speaker 1:Now, if you're unable to negotiate when it comes to salary, vacation can be an excellent strategy to try to meet the middle. So let's go back to our early example. If you were offered $65,000 and you were hoping to get $75,000 and the employer countered your counter and offered you $70,000, you could try to offset that shortfall by asking for an extra week of vacation. Depending on that company, they may have much more flexibility on vacation than salary. So now that I've discussed the different aspects of an offer, how should the actual negotiation go? So let's play with a new scenario. On Friday, you were extended an offer as a senior marketing specialist at a large city and a medium to large company. The company has offered you a salary of about $75,000. During your conversations with the hiring manager, you mentioned that you'd like to make around $75,000 to $85,000 a year. Give me them a range. They've also offered you two weeks of vacation, when you currently have three weeks at your current employer, and your commute is also twice as long, with a number of tolls along the way, and your benefits are not as competitive as your current employer. But again, they've offered you a higher salary.
Speaker 1:Step one never, ever, ever, ever, accept an offer when it's given, and I mean never. Folks At the very least sleep on it overnight. I do not care how good those numbers look, never, ever, accept an offer on the same day. Emotions are running too high and the company is counting on you being so happy that they called you that you will accept on the spot. If the manager or HR tries to pressure you into making a decision that day, that is another potential red flag. A company should never try to pressure a candidate to make a decision at that time, as this is a major decision within your life. To be honest, I'm not sure if I'd even want to work in a company like that. This is typically why recruiters will extend offers on Fridays so that you have the weekend to think about it, and that's exactly why you don't accept the same day.
Speaker 1:You need time to look at the offer, dissect it and come up with your best approach. If we've determined that this is a role when negotiation is potentially possible, we're going to do that because we want to get the best compensation we can get. Remember my saying from episode two A company will never love you more than when you first walked through that door. So now it's Monday morning, you've called the recruiter or manager. Here's how I would recommend negotiating First, always show your appreciation for the offer and place the focus of this negotiation on rectifying a couple of small items, so that we can get this wrapped up and get to work.
Speaker 1:Assuming that the recruiter's name is Bob, I would start the discussion with something like this First, bob, thanks so much for the offer. I can't wait to get to work at ABC Company. There are a couple of little things I'd like to talk about before we get this wrapped up. I have a question about the salary. Is there any room to negotiate Now?
Speaker 1:At this point, they'll either say yes or no, or they may say maybe, or it depends. Actually, there's a bunch of things they could actually say, but it usually falls into one of those brackets. If they say, unfortunately, that it's not negotiable and there's no room to negotiate, and that this is the max offer due to budgetary constraints, honestly I wouldn't push it any further and you have to make a decision about whether this offer gets you to where you want to be from a financial and compensatory perspective. If they say, well, maybe tell me what you're looking for Now, they swung that door wide open and it's time for you to begin negotiating. Now recognize what we've done here so far, what we've done here. We've actually set the stage for that negotiation.
Speaker 1:You have stated to the hiring manager that you appreciate the offer and your mind is already starting to wrap around working for him and his team and the new company. Your demeanor shows that all we have to do is just take care of a couple of small administrative items and we can get this deal done and get back to work. I will tell you that this type of approach works more often than you would think. So, moving on within that scenario, the recruiter manager asks so what do you have in mind or what specific question do you have about the offer? Here's what I would say.
Speaker 1:Well, the offer was technically within the range of what we discussed. However, I'm hoping that we can at least get a bit closer to the midpoint. In addition, currently I have a very short commute and this new opportunity would be at least twice of that, with a number of tolls. I also noticed that the medical coverage would be nearly double, with a slight reduction in coverage. This is fine. However, to offset this, I would like to add an extra $7,000 to the offer. If we can do that, I can get the offer signed and we can start the background check right away.
Speaker 1:See what I did there. I asked for more money. I gave a couple of reasons and I put the pressure back on the employer to let them feel like this is the only thing holding us up from getting to work. I've seen this strategy work time and time again, and if you always keep focused on the positive and have at least one or two financial reasons other than you just want more money, it tends to work out. Now, this is a very simplistic example, but the same works when discussing additional vacation. If your time off is a major issue, you can easily say something like thanks, bob, for the offer and I can't wait to get to work. One item I noticed is that you're only offering me two weeks of vacation. I'm currently at three weeks of my current employer. Any room to negotiate that so I can keep my current vacation time.
Speaker 1:What I want to stress here is that the tone, demeanor and attitude that you display can play a huge factor in terms of the employer wanting to work with you on the final package. One of the worst things that you can do is try to start quoting market data to the employer. For example, I've heard candidates say based on my market research on indeedcom, the salary you're offering is $15,000 less than the minimum standard. That may be true. The offer may be low compared to your research, but the tone in which you communicate this will probably come off as pompous and inconsiderate and negotiations will probably break down before they've even had a chance to begin.
Speaker 1:But remember, this entire negotiation is a business transaction, nothing more. It's pleasant, but do your best to take the emotion out of the conversation. The more emotion you bring to this party, the less likely you are to get what you want. Also, remember that they are waiting on your decision. So you do have a level of power in this situation. So what happens if they say no? Well then there's your answer. You now have a decision to make. Is the current offer good enough for you to leave your current role? If the answer is yes and we were just looking to get a little extra icing on our cake then go forward and conquer. If not and you have mixed feelings about accepting the offer, then don't. The choice is yours, not theirs, and you should never join a company with ill feelings at the onset.
Speaker 1:One of the last things I want to caution you against is that, if you know this offer is not acceptable to you, please do not play the game of accepting an offer and working there only until you can find something else. That goes completely against our long-term perspective thinking. If you've forgotten what I'm talking about, go back to episode one, where we talk about how each decision we make about each job we hold paints a picture of our career. It's bad for them and, in my opinion, flat out unprofessional. If you're in a scenario where you're unemployed and you simply need to put food on the table, look, do what you gotta do. But for those of us who are not in that scenario. Be professional in all aspects of your career, even when you're getting ready to take that next level to your next opportunity.
Speaker 1:Okay, we're going to pause right there, so remember a few things. When it comes to your offer, remember look at the offer in its totality, not just the basic salary. When you're thinking of a good starting point to negotiate your salary, 10% is a good number in my opinion. Take a look at the benefits. Are the premiums more or less than where you currently are, and is the coverage better or worse? What about your time off? And remember never accept an offer the same day it's extended. Take your time and put some thought into the offer given. If you do decide to negotiate, come at it with a good spirit and make light of the fact that there's just a few things we need to tweak and we can get this deal done by making light of the situation. The company may see it the same way and give you what you want, just to get that deal done.
Speaker 1:My friends, I hope that over the last three episodes I was able to give you a few pearls of wisdom to help you in your career journey. Again, my goal is to arm you with as much information as possible so that you can be confident, regardless of the path you choose. If you have any questions you'd like to ask me, feel free to email me at myfriendandhrcom. Feel free to follow me on Instagram and Twitter at myfriendinhr, or you can follow me on LinkedIn under Jasani Courtney. So until next time, friends, be well, not just to others, but to yourself, and always remember that your job is meant to support your life. Your life is not meant to support your job. Until next time, my friends.