We had planned the negotiation down to a “T”.
Meticulously, like a surgeon operating, I had walked my sister through all the scenarios that could play out. We had rehearsed each one, role-played and knew the game plan inside and out. I stressed the importance this next step would have on the rest of her career.
And she told me she understood. She was ready.
I was excited for her. I had drilled the strategy into her and knew she would succeed. Now, it was simply putting the process on auto-pilot and relying on her preparation.
For the past several years she had been stuck in a dead-end job that had no future. It didn’t challenge her but it was safe, predictable and comfortable. The management was incompetent and limited her decision-making ability, which in turn had made her question her abilities.
She is bright, talented and capable of so much more. Yet she was struggling to take the next step in her career. After being passed over for other job openings she had applied for, her ego was bruised and the rejections were chipping away at her confidence.
But she kept at it, and finally, she did it. She had made it through all of the interviews at one of the top companies on her list and was awaiting the official offer. Sure, she had put in plenty of hard work to get to this point, but so few candidates actually realize that this is when the real heavy lifting begins. How you handle the salary negotiation can have a lasting impact on your entire career earnings.
“Remember,” I told her one last time before we hung up. “Never accept the first offer. It doesn’t matter how great it is. You sincerely thank them for it and then tell them you’ll need a few hours to review the package completely before you can give an informed answer. All you’re doing is buying yourself time for your counter. Because remember, that’s all a first offer is, it’s the start of the conversation.”
“I get it,” she answered. “I’ll give you call right after. And thanks for all of your help.”
“Okay. Good luck!”
Whoever thinks that negotiating is not a skill that needs to be practiced, is no doubt always leaving money on the table.
I waited patiently for her to call me back, sitting on pins and needles. But the call never came. Fifteen minutes later I received a text from her: It’s all good. I’ll call you on my lunch break.
My heart sank instantly. I knew exactly what had happened. They gave her a good offer right off the back and she accepted. A rookie mistake.
How much did it cost her? We’ll never know. But what I do know, is that free money was left on the table. Free money that is only sitting out there in unique negotiating opportunities like this one.
So why would she do this right after I had coached her so well on what the next steps should be?
Because negotiating is uncomfortable, awkward and challenging. It is a skill that needs to be acquired through experience and practice. When given an easy way out, unexperienced negotiators take the bait every time.
There is a lot of advice out there on how to negotiate your salary. But I think too often people forget how important understanding the subjectivity and nuances of your personal situation are.
Negotiating comes down to two things for me: context and leverage. If you don’t understand these, then the odds of you winning a negotiation are very low.
#1: Context
The context surrounding the position being offered is critical in deciding what the best negotiating strategy should be.
Not everyone is a software engineer being courted by Silicon Valley, so obviously you shouldn’t negotiate as if you were one. You need to know your market and demand. If the job is a lower-level hourly position that is a dime a dozen, then asking for a high rate of compensation might not be the best approach. On the other hand, if the position is a niche industry and in high-demand, the opportunities for negotiating will be much greater.
My sister was applying for a director role in a more specialized non-profit field, so the context for her negotiating strength was strong and in her favor right out the door.
#2: Leverage
Once you understand the context of the position that you are trying to obtain and the market dynamics, then you should be able to figure out the amount of leverage you have. Just like context, the more factors that are in your favor will determine how ripe the position is for negotiating.
In my sister’s situation, she was coming from a position of strength. She currently had a job. She had the right experience and recommendations. They had informed her that she was chosen and about to receive an offer. She already knew the company had expended a considerable amount of resources in the interview and job search process for a niche, high-level position.
When taking into account all of these factors, it was obvious that my sister had great leverage to negotiate a counteroffer after being presented with the initial package.
However, like all things in life, when faced with these challenges ourselves, they are much harder to grapple with in real time.
I thought we had this one in the bag. At the worst case it looked like she could get a minimum of a 7-10% increase with an upside of 15-20%. Yet, just as my sister will learn from this experience, so will I. This was a great reminder for myself how difficult the process can be for less experienced negotiators.
The bottom line: every negotiation is a learning experience, and it should be treated as such. Never dwell on your mistakes after the fact. Learn, move on and improve.
I’m extremely proud of what my sister has accomplished. She overcame great difficulties and personal challenges to achieve her well-deserved success. Now, she has a great new job at a distinguished company and is being compensated more than fairly. However, the name of the game is improvement. And I know that the next time she finds herself in a similar situation, she’ll be a little more experienced and patient toward negotiating the best possible package available, for someone with her context and leverage.
I’ll also add that I am no master negotiator myself. Over the years, my skills have improved drastically and I’ll be writing another post detailing my mistakes and what I have learned from the most recent negotiations in my own professional life.
More often than not, I find the old adage true: everything in life is negotiable.
So try to challenge yourself to adopt this mindset and see where it takes you. There are many roads to travel. Why not negotiate the best possible circumstances along the way?
-Q-FI
P.S. Let me know below any tips you have used in past negotiations or stories from your own experience?
Great post. While reading the intro, it immediately bright to mind this scene from Albert Brooks’ “Defending Your Life”.
https://m.youtube.com/watch?v=DufE-dcQ70k
I concur – context and, most importantly, leverage are the 2 keys. I generally will never negotiate without leverage, but had to do so with very little on the house build and house sell recently and I didn’t like it much at all. Fortunately, I got through both with good, but not amazing deals and it required all my 25 years of practice to make that happen. I agree though, that even with your back against the wall, NEVER take the first offer even if you have to bluff hard.
Hahaha… that’s a great clip! I love it.
As always, thanks for stopping by Mr. Fate! I love getting your take on things and you always offer great constructive feedback. Yep, negotiating without leverage is a very painful process. I’ve been on the short end of some very bad, forced work deals that you just shake your head at.
Catching up on this one, great info and advice. What do you recommend for your sister from that point forward? If she gets a promotion at that job, will she negotiate the salary increase? Do you need another offer in order to create leverage at your current position once that salary is locked in?
Hey IF – always better late than never! Haha.
There’s a reason why millions of books have been written on this subject.
But honestly, what I’d recommend for my sister if salary increase was her goal, would be to job hop. You’re never going to have a better opportunity to make a big jump in salary then when you join a new company. They have no idea what you were making previously so you can bluff and negotiate without any restrictions. Remember, once you join a company – at least if it’s a typical corporate structure – they usually have grade restrictions that only allows an employee a set amount of % increase per year. So even if you’re promoted from a manager to a VP in a year, the title might follow, but not the requisite compensation for such a jump that would be expected on the open market. And if that restriction can be lifted, it’s usually such a pain in the ass to get lifted that no manager will go to the effort. Also, once you’re with a company, they know exactly how much you make. So it will be much harder to negotiate any larger increase no matter how productive you are. A lot of managers will use the “well my hands are tied, HR will only allow me to increase your salary this much.”
But if you are trying to negotiate a promotion internally, I’d bring in market rates from a website like salary.com showing what someone of your experience and productivity should be paid on the open market. Might work, but might not. But at least you have data to back you up. Or if they won’t give you an immediate raise, negotiate if I do A, B and C this year then I get a 10% raise next year… or whatever. Need to get the agreement in writing though.
For bringing in another offer, you need to be very careful with this one. It can work in the right situation, but needs to be done delicately. First, if you’re going to do this, it will only work once. You can’t keep bringing in offers, or you become the boy that cried wolf and people would rather let you go. Second, you need to be prepared to leave, so that offer better be worth it in case your company says we won’t match it, have a good life. Plus, if you bluff w/ the offer, and they say take it, but you don’t leave, that’s one shitty situation. Hahahaha. Don’t be that guy.
I’d also say, a lot of negotiation depends on your boss or the person on the other side of the table. If your boss is cool, and goes to bat for you, then bring in market data and say you’re underpaid, how can you increase your salary. If they like you, they’ll probably figure a way to get you more money. On the other hand, if you have an insecure boss that’s a dick, you probably don’t want to be bringing him an offer from another company. They’ll probably feel threatened and not even try to keep you. So finding a new job might be the better effort rather than trying to eek out a miniscule raise from someone that doesn’t appreciate you.
I think I’d have to agree with you. It really is a shame that the system generally rewards job hopping over loyalty to a specific company, but such is life. I think job hopping early in your career out of college is one of the better things you can do–pump up your future earnings by increasing salary while also collecting varied workplace experiences that you can draw from you as progress. Provided you are giving each company your all and not burning bridges on the way out, it’s also a good way to build a wide network within your profession.
But to your points–it really does depend on situation/circumstance. That was one of my issues with I Will Teach You To Be Rich. I fear that advocating for people to push for a raise at their current position might be counterproductive in some situations.
Thanks for the excellent insight!