Eleven Commandments for Smart Negotiating

Little negotiating power in a tight job market? Maybe, but there's always some degree of wiggle room. Here's some tips that will help you get a better deal.

When the economy is strong, job seekers feel not only that they can negotiate, but that it would be foolish not to. When the economy is weak, however, many candidates wrongly feel that they have to accept what’s offered or risk losing the offer. Whatever the economic climate, what matters is how you negotiate. Although you may not get everything you want, you won’t lose a job offer because of what you ask for. However, offers are frequently withdrawn because of the way someone asks for something. Whether the job market is good or bad, there are always opportunities to negotiate a better compensation package, but only if you understand how.

There are 11 basic commandments to help you negotiate the best possible deal in any economic climate when changing jobs, whether internally or with a new company. They are:

1. 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.

2. 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, the company’s focus will be on getting you to accept the job. Even in a weak economy, a prospective employer wants you to feel good about taking the position.

3. 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? For example, 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 also will 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 nonfamily member. A start-up company, on the other hand, may not be able to offer a market-rate salary, but will typically offer stock options. By recognizing what an employer can do, you’ll be able to determine what issues you should press.

4. 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. Knowing when to ask is often critical to getting what you want.

5. Never lie, but use the truth to your advantage. It isn’t 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 preparing should be to recognize areas of concern so you can rehearse how to handle them when they inevitably come up.

6. 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 salespeople in other companies in your industry are typically being given expense accounts, you can expect to receive one as well. 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.

7. 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 learn 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. An employer may not offer you as little as it can get away with. However, if you’ve divulged too much information, your offer will likely be smaller than it would have been otherwise. By not disclosing your exact current compensation or what it would take to get you to leave your job, you’ll force a potential employer to make its best offer. When dealing with recruiters, however, you may have to provide salary information. If you do, though, it’s important to present that information in the most advantageous way.

8. 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.

9. Focus on your goals, not on winning. Too often in negotiations, the act of winning becomes more important than achieving your goals. It’s 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.

10. Know when to quit bargaining. The one sure way to lose everything you’ve achieved is to be greedy. There comes a point in every negotiation when you’ve gotten everything you could have reasonably expected to gain. While most companies will want to treat you fairly and make you happy, few companies want 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:

11. 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 in good times and in bad. Once you are hired, 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.

Mr. Miller is the author of “Get More Money On Your Next Job: 25 Proven Strategies For Getting More Money, Better Benefits and Greater Job Security” (McGraw-Hill, 1998) from which this article has been adapted.

This article is reprinted by permission from CareerJournal.com (c) 2003 Dow Jones & Co. Inc. All rights reserved.

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