Play the Game of Life
Ryan Petersen's Blog

Notes from a Columbia Business School seminar with Ellis Chase, a human resources consultant and executive coach.

I.) Avoid the issue of money AT ALL COSTS!

Why avoid the issue?

The longer you wait, the more you make.

Four primary risks of discussing money:

1) You come in so low that somebody might judge your ability by this figure.

2) You come in low, they take the offer, and later you find out the other guys make more. You'll be pissed and want to quit!

3) You come in too high and eliminate yourself from consideration.

4) You come in at just the right level...and leave money on the table!


How to avoid the issue of money?

You can't just say "I don't want to discuss that." You just can't.

Here's what you do:

The CFO says to you, "what'd you make in your last job?"

Your response, "I'd rather not price myself out of the job, so if its okay with you, I'd rather wait til we've had a chance to really explore the great fit here."

CFO's response, "Yeah, yeah...what'd you make?"

Your reply, "Could you give me an idea of your range?"

Now the CFO is starting to get impatient and asks you what you made a third time.

Your reply this time, "I'll be looking for pay in the range of ____"

Finally you can tell she's losing patience with you, and asks yet again, "come on, how much did you make in your last job?"

Well, now you can avoid the subject any longer, you tried your best. So you tell them how much you made, but include the TOTAL value of all compensation, including all salary, benefits, bonuses, stock options, etc. It's likely these come to about 30 percent above your actual salary, but may be overlooked by many.

II) You got the offer, what now?

Absolutely Key: ***NEVER NEGOTIATE AT THE POINT OF OFFER!!***

Why not?

You'll forget parts of the compensation that are very important, health benefits, bonuses, performance metrics, etc. It takes time to work all these things out, don't rush into it!

Scenario 1: You get an offer lower than expected.

Your response: Look straight down at the floor and count to ten slowly without saying anything. The silence will make the other person so uncomfortable that in 10-15 percent of cases they'll add $$$ immediately. Then, you say, "I'm excited as hell about the offer, I'm very flattered, but I'm a little concerned about the money part. I think it might be a little bit low based on my perception of the market. I couldn't be more excited though. Give me a couple of days to look into it, there's a lot to evaluate and I'm sure I'll have a few questions for you and I know you must have some for me. How about if we set something up next week to finalize things?"


Scenario 2: The offer is just right.

Your response:

Look straight down at the floor and count to ten slowly without saying anything and then say, "I'm excited as hell about the offer, I'm very flattered" Same as above, just don't say that the money is too low.

Scenario 3: They come in high.

"I don't think we're going to have any problems with the financials, but there's a lot of other factors. I'm so excited about this, I'm really flattered. Let's set up a time in a few days to see if we can seal the deal."

III) Negotiating the Terms:

Your Strategy:

Make a list of everything that's important. And alternate easy-hard all the way down the list!!

Start with something that you know is impossible:

1) Can I start the 401k earlier?

The answer is 100 % no!! It's illegal...

2) Now a very easy one, can I roll my old 401k into your program earlier?

The answer is 100% yes, it costs them nothing.

3) Now bring up the thing that's most important to you.

Use the word "market" often.

Say things like, "What can we do to get the number up?"

Start selling yourself, gently, firmly and collegially, referencing the market all the time. Remember, there is ALWAYS money in the back pocket, and they expect you to negotiate for it. If you don't, what will that say about you?

4) Ask about careers questions. What's the job going to be like? Maybe some specifics? Who will you report to? What are the performance metrics?

5) Vacation -- it is negotiable!!

Last thing--severance pay "what kind of protection do you offer in the event of redundancies?"

Forget signing bonuses!! They are taxed to death and have no effect on your long-range salary which is more likely to be based on percentage increases to your base salary.

Instead ask for two six-month reviews, not one. That will get you two reviews in the first twelve months. Combined with very clear goals and performance benchmarks, you'll be on your way to two raises in the first year!

Digg this article!!

Labels: Columbia Business School, salary negotiations