Tempesta & Associates, Inc. - Negotating a Compensation Package

Negotating a Compensation Package

written by: Kathy Bornheimer

Accepting a good offer at the compensation level you desire isn't as cut and dry as it used to be. Geographical location, specialties within a field, high demand/low supply positions or career changes are just some of the variables that have complicated the process. Another key variable is the transition from salary to hourly pay or vice versa can influence total compensation because of the overtime factor. With the exceptions of career change or cost of living in a new location all other variables actually provide leverage to the job seeker. Most of this article addresses the issue with the view of the employed job seeker. However, there is little change on the premise for the unemployed individual.

Salary is the main focus of the compensation package and the most obvious. However, many companies incorporate a variety of benefits (vacation, education reimbursement, insurance options, retirement, bonuses, etc.) to create a total package. We'll address salary as the main issue, but utilize the other areas.

Companies seldom reveal salary/wage ranges in their want ads (but many require your salary history when submitting your resume). Although more often the skilled trades positions are indicating hourly rates that are competitive and I.T. positions frequently state attractive bonuses. It is often an unknown but critical element until you actually start interviewing or you know how to discover the information. Just because you've indicated your current salary level on a cover letter or application form doesn't mean that you'll receive an offer at the range that you want. If the application form has a section on desired salary/wage provide a range; low 30's, upper 40's, etc.. Do not state an actual number; 35k, 48k, etc., You could lock yourself into the level even if they could have gone higher. A frequent mistake people make when filling out application forms or even during the interview stage is forgetting about overtime or bonuses. These can add a significant amount to you annual income.

If you're interviewing for a position with a recruiter, the salary parameters will have already been screened. You wouldn't have reached this level if the dollars weren't matching. This is an advantage also when compensation negotiations begin since you now have a mediator in the process. It can be frustrating to reach this stage, only to have a low offer extended.

A smart applicant needs to complete the research and convey skill or ability effectively to insure a reasonable offer. First, do your homework as to salary levels in your field, industry or geographical area. If you're currently employed and remaining in the same profession your guidelines are evident. Use your current salary/wage as a starting point. Don't forget however, when your next increase is due, extrapolate that increase in or you'll be using "old money". If you're unemployed use your last salary. If you think that you're below the norm due to wage/salary freezes, below average increases or your employer just doesn't pay well, there are some resources to use in order to gain accurate information. First, ask people that you know who are in comparable positions the salary ranges where they work. You're not asking them to reveal their income, just the ranges to the best of their knowledge. If you are fortunate enough to know someone who works for the company that you're interviewing with get some insight from him or her.

There are state and federal statistics available, but they tend to be outdated and over generalized. Tap into the local Dept. of Labor resources. They often have county or regional information based on employer surveys as to what companies are actually paying their workforce.

Many professional associations run surveys among the membership, so national or statewide data should be available. ASQC (American Society of Quality) does an extensive report and breaks down the information by job title, geography, industry, size of company, years of experience, education, size of dept. etc..

Gather the hard facts through these resources to begin your plan. One recommendation that is critical to successful compensation negotiation is to never state your actual dollar requirement during the interview. Have that number in your head, but if you bring it up too early you run the risk of "low balling" yourself or appear to be money driven rather then interested in the job or company.

Let them know your correct level. Most companies will go 5-8 % higher. In some fields such as I.T. it's not unheard of to go 10-15% because of supply and demand. However, be realistic or you could lose it all.

Be ready to prove that you're worth X number of dollars. Use skills, experience, and successes as the tools to achieve your goal. Your potential employer doesn't care about how much money you need to live on. So that should never be brought into the conversation.

If the interviewer asks, "what salary level are you looking for?" don't provide an actual number. You can re-state your current level, your qualifications then state " I'm interested in hearing your best offer". Make sure that you practice this technique; you must come across as business-like and interested.

If the company extends an offer significantly less than your current level or "market value" you have two options. Decline politely and restate your qualifications them present a counter offer, or simply decline the offer. If they extend an offer slightly less than what you prefer again restate your qualifications and suggest additional compensation options that are non-salary related. These could include; one week additional vacation, lower insurance premiums, and a special review in 90 days with an increase determined by performance, etc.. Remember, if they agree get it in writing!

Do the essential "leg work"; keep up to date information as to salary levels in your field, job or industry. Never begrudgingly accept an offer you won't be happy with. It will be evident in you attitude and performance. You'll be better off waiting until the right opportunity comes along with a total package that fits your requirements.

Tempesta & Associates, Inc.
6525 North Green Bay Road
Milwaukee, WI 53209

414-967-9250