“The most difficult thing in any negotiation, almost, is making sure that you strip it of the emotion and deal with the facts.” – Howard Baker
It is one of those fun times of the year, when accounting firms and some companies announce promotions, possible salary raises, and bonuses. This usually causes a negative reaction (e.g., “I’m out of here” or “I can’t believe they only gave me $X!”) or, sometimes, a semi-positive one (eg “okay, that wasn’t that bad, I’ll stay for a while”).
If you’re in the “I’m out of here” camp and you start interviewing for new opportunities, here are some tips to keep in mind when you get into negotiations for an offer with a new company:
1 – The closer your next raise and bonus is, the more leverage you have; the closer you are to your last raise and bonus, the less leverage you have:
Your next employer is far more likely to give you a healthy bump in salary if they know that an increase in salary from your current employer is coming up. If they know that you will be getting your bonus in a month or two, perhaps they will give you a signing bonus to compensate for some of the lost money. But if you just got a raise, why would your new company give you yet another one?
2 – Understand the range of experience required for the position you are interviewing for:
So, let’s say you are interviewing for a Director of Finance position, and the required level of experience is between 10 – 15 years. Obviously, a 10 year candidate and a 15 year candidate do not earn the same level of compensation. So, it might not be easy trying to negotiate a higher salary if you are a 15 year candidate as there simply may be no room left in the salary band.
3 – Get a sense of how competitive the position is:
If everyone and their dog wants this job and to work at this company, you might not be able to negotiate $10K more in base salary if candidate #2 (who might be just as good as you) would do this job for $5K less.
4 – Can the company afford to give you more money?
Negotiating more money with a privately held company that has just gone through a restructuring might be difficult. Likewise, trying to get more money from a start-up company that has limited G&A will be a challenge.
5 – Find other ways besides base salary to get to the number you want:
Companies, especially those that are mid-sized and larger, often have very specific salary bands they must adhere to–one of my clients actually made an offer to one of my candidate for $85,072, on the nose. Perhaps they can give you a parking allowance, a signing bonus, a retention bonus, or a reimbursement for a foregone bonus from your last position. Or, perhaps they will give you additional stock options in lieu of base salary.
In negotiations, as in life, the better prepared you are, and the better informed you are, the best possible position you will be in to negotiate the right compensation package.