Tuesday, February 2, 2010

Job offer negotiation

From a reader:

I came across your blog while searching for some info. Really must appreciate your efforts in answering our queries.

I’m writing to you to seek your advice on a job offer.

I’ve been working for 4 years with an IT company that’s in another city. I‘ve been in search of a job opportunity in my hometown for over six months. Currently, I’ve got an offer from a company in my hometown. But I’m not that excited with the offer. Though I’m getting a very good role, responsibility and position (designation), the salary which they are offering is not that good. When I’d mentioned to them that I’m expecting a better hike, they countered that by saying I’m relocating to my hometown and as per my experience their offer is the best in the market. I’m not concerned about the fact that I am relocating to my hometown (it can wait a little longer if needed), my concern is that I’m pretty sure that I’ve not been given a fair offer considering both my experience and skills.

At times I feel like compromising on the salary front, thinking that I’ll prove my skills & experience while performing on the job. But when asked about appraisals, I was informed that I would be eligible for the next appraisal cycle (next year). That would mean that I would have to remain on the same salary for another year and I would be underpaid. This is another factor which is not attracting me to accept the offer.

I’m due for an appraisal in a month’s time with my current organization. Assuming, I get a decent hike post-appraisal, my salary would be way beyond what they are offering me. Is there a room to negotiate for a better salary? Please suggest.


Congratulations on the offer!

Well, there are many things that come to mind. First, are you moving from a tier-1 to a tier-2 city? The reason I’m asking is because offers vary depending on the geographic location/city. Many factors such as cost of living, talent pool, tax liabilities, legal compliance, etc, are taken into consideration while deciding the salary range. So effectively, an offer of $x in a tier-1 city might be seen as high in a tier-2 city. Now, this might or might not be true in your case. Especially since you mention that they cited your experience as being a major deciding factor in the offer. On the contrary, they are also referring to you relocating to your hometown and that their offer is the best in that market. So, it comes down to you answering my question.

Second, you’ve been trying since six months to move back to your hometown. I assume then that this must be your first job offer there. Does that tell you something about the job market in your hometown? Either way, the current situation has more candidates (and good ones at that) than the number of jobs available. Is the job movement from a generalist role to a specialization? That could complicate things too. If four years of your work exp is spread across various skills and you were interviewed for a specific skill, then your technical competency gets rated on that particular skill.

Third, have you made a list of things that are important to have for your relocation? Yes, there’s role, responsibilities, salary, etc. However, in this case since the salary is lower (than your expectations) there might be benefits that might be part of the job offer. Like, relocation benefits, flexi hours, telecommuting, vacations, insurance coverage, bonuses, stock options, etc, that add to the whole offer package. Did you explore those as well? I assume you did.

Next, you mention that you are pretty sure that the offer isn’t a fair one. Well, what’s the benchmark you are considering? If it’s based on objective data then it makes sense. If not, you may want to re-evaluate the offer.

Finally, let’s move to the upcoming appraisal. There isn’t any concrete data on the possible percentage of hike that you might expect, especially given the current market conditions. Expecting the next employer to compensate you with a hike for work that you’d done in your previous company, isn’t really the way to bargain for a hike. No? If that’s the case, then you might as well wait for the appraisal and then start interviewing. Given that your move to your hometown can wait a little longer, I suggest you don’t take up an offer that you are not satisfied with. Period. Cause it will catch up with you sooner than later.

Is there room to negotiate for a better salary? Yes, there is if you have decided on things that you are ok to let go and others which you must have. Off course, you can still go ahead and ask for a hike. The max that they’ll say is a ‘No’. But that discussion will have more weight if you went in with researched data. Negotiations are really about giving as much as getting. I see there’s a lot you can take away from this interviewing experience.

Hope you get the offer you are expecting. Good luck!