I came across a great article in the Harvard Business Review, “15 Rules for Negotiating A Job Offer” by Deepak Malhotra, that hits on all the key issues when negotiating a job offer. At some point, almost everyone needs to have this skill, either your first job after leaving university or getting back in the workforce after selling a company for millions and not wanting to start another. As you probably have more experience growing a company or product or leading a team, something as seemingly simple as negotiating for your self may be a black box. These fifteen rules will help you come to a fair agreement with your potential employer:
- Help them understand why you deserve what you are requesting. This is the most crucial rule. They are only hiring you because they feel you will make their company stronger. You have to explain why you are worth what you are asking for. It is about the value you are providing so things like your salary history, personal expenses, desire to move, do not impact this equation. Instead you need to show why you are worth more to them than other candidates.
- Do not underestimate the importance of being likable. The people you are negotiating with will fight for you internally or be willing to push the offer envelope more if they like you. Anything you do in a negotiation that makes you less likable reduces the odds that the potential employer will work to get you a better offer or meet your requests.
- Make it clear they can get you. If the company or hiring manager is concerned you will not move to their company regardless, they are unlikely to expend political or social capital for a strong or improved offer. They do not want to fight for you only to have to explain internally why this great candidate passed after giving them everything they asked for.
- Understand the person across the table. Not only is it crucial when negotiating an offer, but in any sales or business development effort you need to empathize with the person you are negotiating with. You are always negotiating with an individual, not a company, and by understanding their needs and concerns you can create a solutions these issues, which may not necessarily reflect the corporate needs.
- Understand their constraints. Even if the individual likes you and feels you deserve what you are asking for, they may not be able to provide it. Understand what limits they face, budget, equity, etc. If you understand their constraints, you can modify your request to be in the range of what they can deliver and still satisfy you. The better you understand their constraints, the more likely you are to find options that work for both you and the company.
- Prepare for tough questions. I have frequently been asked questions I did not want to answer, such as what I would do if my employer matched or exceeded their offer, if I was their first choice, do I have other offers, etc. Both Malhotra and I agree that the key is to be honest. If you try to “spin” your answer, you come off as either inauthentic or inarticulate, neither of which is a good thing. You need to prepare for questions and issues that would put you on the defensive or make you uncomfortable. Your goal should be to answer honestly without looking like an unattractive candidate or giving away too much bargaining power (for example, by admitting you have no other opportunities after being unemployed three years). If you anticipate the question, you can find an honest answer that does not undermine your position.
- Focus on the questioner’s intent, not the question. It is not the question that matters but the intent. The question may be challenging but the intent is not meant to trick you, they are just looking for a piece of information. Conversely, the question may be challenging not to see the answer but to see how you go about answering a challenging question. If you feel it is the former, either tell the questioner the information you think they are looking for or ask for clarification. If the latter, remain calm and address the question in a logical, fair and thoughtful manner.
- Consider the entire offer.Much of your job satisfaction (and overall happiness) will emanate from factors other than the salary. Do not get fixated on the annual salary, also look at responsibilities, location, travel, opportunities for growth, perks, co-workers, etc. You may end up deciding to pursue an offer or opportunity (or evolve the offer) to one that pays less but will put you in a better position.
- Negotiate multiple issues simultaneously, not serially. This is another rule that is incredibly important but people often overlook. If you have an offer but there are several aspects you are concerned about or cannot accept, address them all simultaneously. There may be trade-offs between them that the employer can make and seeing the situation holistically better empowers them to find a fair solution. Worse, you may use up your equity negotiating the first couple of points and the employer gets fed up by the time you get to subsequent, potentially more important, issues. Finally, it is extremely annoying for someone to negotiate one point at a time, I refer to it as nibbling. Regardless of how much they want to hire you, they may get fed up enough with this strategy to rescind the offer even if the remaining issues are trivial.
- Do not negotiate just to negotiate.Another peeve of mine, only negotiate if you truly feel the offer is not fair or you are providing more value than they are offering. If you are just trying to prove your value as a negotiator, unless that is the position you are being hired for you are likely to waste both your’s and the employers time and are putting at risk a job offer you want to take.
- Think through the timing of offers. Early in your job search, either directly out of school or when looking to change positions, you may push to get an offer early to create a sense of security. This thinking can become an issue if you end up pushing for an offer from a company(ies) that is not your first choice. Once a company makes an offer, they expect a quick response and you may lose the offer if you do not make a decision quickly. You should instead plan so you get multiple offers around the same time and also at the time you are most likely to leave your position (if you won’t leave for three months, getting an offer immediately has no value and keeps you from going back to them in the future).
- Avoid, ignore or downplay ultimatums. Avoid giving ultimatums as people do not like being told to do something or else face consequences and will often take a stronger position in response. Also make sure you do not do so inadvertently, you may be trying to show strength (I have to get back to your competitor by Friday) but it could come off the wrong way. Malhotra and I also agree on how to respond to an ultimatum, ignore it. That way you do not put the other party into a situation where they have to stick to the ultimatum. If it is real and you need to deal with it, the other party will make that very obvious.
- Remember that they are not out to get you. Tough salary negotiations or long delays in the confirmation of a formal offer can make it seem that potential employers have it in for you. Given that they are still trying to hire you, logically that is not the case then. They may be negotiating hard because they do not have the flexibility to meet your requests. The offer may be taking long because of internal bureaucracy. The best solution to this situation is not to get angry but ask them way they cannot concede on a point or why it is taking so long to finalize the offer. Communication, not anger, is always the best strategy.
- Stay at the table. As the article points out, what is not negotiable today may be negotiable tomorrow. Companies positions change, they may find they cannot find a comparable candidate at the terms they are willing to pay or their constraints may ease (they have a good quarter). You may even want to accept a position knowing you will revisit the issue (maybe your dog to work) after you are secure in the position rather than as a binary on whether or not to take the job.
- Maintain a sense of perspective. The negotiation is less important than finding the best job for you. You may negotiate perfectly and get what you ask for and end up in a job that you are not happy in or does not have a strong future. Conversely, you may not get everything you ask for but you know you would be extremely happy at the new company. You need to look at the situation holistically and optimize your utility, not the offer.
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