Wednesday, October 22, 2008

Salary Negotiation

Salary negotiations anyone? Ask recruiters and they’ll say; NO!

Salary discussions somehow seem to be the biggest hurdle in the hiring-process. But why? Easy to predict the usual suspects, profile mismatch (found after the interviews!), company’s internal parity/team fitment, compensation structure mismatch, not able to match candidate’s expectations, candidate received a counter-offer from another company! Candidate got retained by the same employer with a hike! Loads of other issues. The situation looks grim and looks like it cannot be eradicated completely. After all, it’s called a negotiation NOT a verdict!

So what can be done to reduce the chances of having to deal with a messy salary negotiation? You give some and receive some, both for candidates and employers.

Quality wins hands-down in a negotiation, like sales people will tell you, quality is what is remembered long after the customer has paid a hefty price! The price was just a negotiating tool…

From a candidate point of view

1. Start with finding out the role and responsibilities of the job. If it’s a fit, undergo the interview process. You might NOT want to put an amount on your resume if you don’t know what you are getting into. Chances are you may need to do more than you had expected and quite naturally you need to be compensated for the same.

2. Set expectations right from the start – both of you should know what each one is getting into! It’s a build up to your negotiation phase.

3. When you enter the stage for salary negotiations – please be REALISTIC! Ask for a 500% hike, ONLY if you can substantiate with realistic reasons. No one in their right mind wants to low-ball you; barring a few, its people after all !

4. Do a quick check on the availability of your skills in the industry. Is it niche? You have a strong point to talk about.

5. Ask questions whenever given the chance about the company, work culture, peers, engagement model of the managers, company communication, etc., a strong indicator about the company’s fair-play attitude!

6. Compensation structure plays a BIG role! Start by understanding their compensation structure and later try mapping it your current salary structure. Both will surely have their positives. Be practical when you do this, since it could back-fire! A benefit here could be missing in the other and vice-versa.

Mostly Importantly

The Company doesn’t want to hear reasons like:

- I’m really smart, hard-working, with high integrity, etc. so I need to get paid more! What the heck, if you already are not, they would not even be talking to you. Get real!
- My friend with another company doing the same job is getting more than me! Hmmm…why don’t you wait and interview with that company then? Your friend is not your ticket to the salary negotiation table…
- You started out asking for 8% hike, but now realize you need more (10%)! Stick your commitment of asking for 8% (you were the person who gave them that number!) Don’t change that overnight, it’s a red-flag.
- An interview is a window to gauge you. You could been a STAR in your previous company. No one will ever know, if you cannot communicate that across with good presentation. So just because you cannot tell them your worth, don’t expect them to read your mind!

The company wants to hear you say things like:

- The company’s revenue returns will be higher because of your work! (Directly or indirectly) Time is money! Outline the reasons, such as newer, cost effective and process oriented approach to their latest problems (off course you may have to know about it during the interviews!) You are already up 1- 0…
- You are at the table negotiating for a salary based on your value, and they need to know that from you! Like you are capable of handling more responsibilities (give examples, not just talk) than what your current job lets you do.
- They’ll like to believe that your offer to do more sounds exciting since they get to fill a higher position with a lesser budget and a worthy candidate! Win-win situation. Score 2- 0
- Talk about instances where you have gone beyond your line of duty to complete tasks. After all, rewards are for people who have done more than what they are asked or even paid to do!

From a Company’s point of view

1. If you thought the candidate was already paid more than could have afforded – please don’t waste the candidate’s or Company time!
2. It’s unfair to low-ball a candidate, be fair and realistic. The Company has limits too. Candidates understand that!
3. Ask your HR interviewer to add more value to interview feedback, not just act as facilitators!
4. Candidates always expect more, stay firm and decide where to draw the line! You can’t keep stretching till the talks break…if you think the Company’s offer is good, stick to it!
5. Learn to say NO to more-than-necessary demands! If you set a precedent, others will follow! You do know candidates talk to others in the industry, right?

- The HR Store