Wednesday, February 17, 2010

Negotiating Salary and managing expectations

That's right we're talking about $ money $.

Money buys us stuff that we need and stuff that we want. It's a sensitive topic when you're negotiating a salary because both sides have opposite goals in mind. One side wants to pay as little as possible and the other wants to get as much as possible.

The bottom line is everyone wants more of it. We all know that going into the conversation. The thing is, how much are you worth to the company? The easiest analogy is to use professional athletes and how they get paid such exorbitant amounts. True, a $20 mil deal to play a ball game sounds unreasonable when there are people working 12-15 hour days sometimes at two jobs who barely eek out the basic needs of life. However, do you think that such an athlete would be paid such a high dollar figure if he didn't produce? That name fills stadium seats and commercials. Stadium seats cost money. Commercials sell shoes. Concession food is $$$ and people at ball games buy food, drinks and wear sneakers. You can afford to pay someone $20 million if he brings in 100, 200, 500, 10,000 times what you pay him.

When doing the initial talks about wages, it's important to give the topic some parameters and keep an open mind. Try to see the other side but fight for what's right.

1. Economy - Take into consideration how the rest of the world, country, state, city, business community, industry, and company is doing. Be realistic with your expectations. Also, keep in mind that salary increase is not on some linear time table that the whole world follows. You are responsible for your income based upon overall value. Just because you made $85k last year and you have 10 years of experience, it doesn't automatically mean that you deserve $90k or $95k this year --- That's exactly not the case. Think about it. If that notion were true at the end of a 20 year career in fast food, a minimum wage MC'ds employee should be paid the high six figures because he's the best burger flipper in town. That simply doesn't make sense does it?

2. Scarcity - How difficult is it to find someone to fill this specific open position? If you ask for too much, it might just be easier to go find someone else. How current and rare are your skills? More importantly, how well do your skills match with company needs? This is really the key. It's less that you are highly skilled and more to the point that your specific skills with all the intricate exposure to business processes, industry, and like environments that are crucial to the company.

3. Goals - What are the business short-term and long term objectives? What paradigm view on talent acquisition? Some companies like to get into bidding wars, especially during booming economies when money is spent like water and everyone is scrambling for the few talent that is out there. Others, don't let money be the major attraction to their company. They emphasize culture and growth potential.

5. Value - What is the ROI? If you're asking for a salary at the top 5% of the field but delivery what most others do with no or little added value, what reason do companies have of paying you so much more? Just because you've been doing it for so long? Touching back on earlier points, although hard to swallow at times, number of years does not necessarily translate to better skills. When was the last time you learned something new, added value, went beyond your "job description" to save the company money or seek out more money making opportunity? Are you satisfied just showing up to work on time and leaving on time and doing an adequate job? If so, how does that alone translate to overall increase for you? If you have a case, make one for yourself but be prepared for the harsh reality that it may not be enough or that the manager may not see things your way. It can also simply be a lack of budget during tough times.

I've talked to and met with exceptional young talent with 2 years of experience who are far better than those who have been doing it 20 years who are still mediocre.

The bottom line is this. Money is a touchy subject but a critical part of the decision making process for a new job or a raise for an existing one. Look, if you can't negotiate money, perhaps you can talk about vacation time, flex hours, or a promotion. If your company does annual reviews you might ask for a 6 month one where you might qualify for a smaller raise or bonus. Get creative. Just handle it like any business proposal with costs and benefits, market research, poise, rational thinking, and you'll be fine.

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