Real World Salary Negotiation - How do you do it?
February 4, 2010 2:07 PM   Subscribe

Salary negotiation - how to do it? I know that, in theory, you're supposed to get them to talk first. Does that really work? How do you do that without coming off like a jerk? Nowadays, the salary question starts in the first email. I generally deflect this question pretty well, but in the interview when they ask "What salary range are you looking for?" I run out of things to say. How do you answer this question? Give me specific phrases I can use. Based on an earlier AskMe threads, the Noel Smith Wenkle approach works well. On the other hand... (more inside)

... is it really so bad to name a figure you'd be happy with? Posts like this one, this one and this one make it seem like it's really easy to piss off hiring managers by doing throwing the question back at them too much, and I suspect that when the rubber meets the road, the "never go first" theory doesn't always play out as planned.

Real experiences, hiring mangers, etc. especially welcome.

Previously: [1] [2] [3] [4] [5] [6] [7] [8]
posted by MesoFilter to Work & Money (27 answers total) 67 users marked this as a favorite
Best answer: This is my hiring guy voice.

People always overthink this one, because they're afraid of insulting the other party, or of not getting the maximum value that they "could" get. Of course, that's the nature of negotiation: you almost never get the maximum possible anything. So it's best to turn off your greedy mind when doing this.

The best answers I receive are in this form:

"Well, the last position I had that was sort of similar to this was about $72,000 plus some options, but that had a little less responsibility than this... so I'd expect a bit more than that this time."

"Well, let's see.... my last job paid me $90,000 but that was a bit silly because the work was very easy, and I would have worked for less happily. They also gave me stock options that ended up being worth nothing because the company folded, but the health plan was nice."

"Hm, this job sounds similar to my old manager's position. I believe he was paid $64,000 with a few weeks of extra vacation and development time, so that seems about right."

In other words, you ground your number in some real-world experience and add something more than just a hard number.... rather than just pulling $x from your ass and hoping the other person agrees. If you're wrong, you've left some windows for them to correct you without insulting you. They can say "Well, this job isn't quite like that..." or "We can't pay that much salary, but we have good vacations and the health package is very good." or even "Yes, times sure have changed..." and steer the conversation back to where they're more comfortable. In other words, you have left the conversation lubricated, rather than put up a barrier.

But before you start doing all that, do an honest personal inventory and decide what number you really (a) need to survive, and (b) would genuinely and honestly be happy with.

Because it's much more difficult to renegotiate tomorrow.
posted by rokusan at 2:17 PM on February 4, 2010 [49 favorites]

Response by poster: Good advice. My instinct tells me that you shouldn't constantly throw the question back at them & if you were truly comfortable in this sort of situation, you'd talk in exactly the way you described (for example).

I basically know the numbers for myself, though I will do a little research on the salary ranges for the job I'm interviewing for. It sounds like I have a little homework to do - not just finding the numbers, but thinking back to my past experience & some emotional homework to get myself comfortable discussing numbers.
posted by MesoFilter at 2:24 PM on February 4, 2010

I've interviewed folks while working at a small company as the IT manager. I asked every interviewee this question and got an honest answer each time. We were financially constrained, so it was always a factor in who we picked. I think anyone who played games like the Smith-Wenkle method would have been dropped to the bottom of the list, since that would mean that we wouldn't know if they'd take the salary we could afford before spending a bunch more time on them.

I know that's probably not the proper way to hire, but that was pretty much how it was at that company, at least. If everyone else is giving a salary expectation and you're coy about it, you might get bumped down the list.
posted by pocams at 2:32 PM on February 4, 2010 [2 favorites]

Response by poster: I think anyone who played games like the Smith-Wenkle method would have been dropped to the bottom of the list, since that would mean that we wouldn't know if they'd take the salary we could afford before spending a bunch more time on them.

I have to throw the question back at you though - you have a number in your head. You've admitted as much. Why aren't you willing to state the salary you're willing to pay?
posted by MesoFilter at 2:43 PM on February 4, 2010 [4 favorites]

This method worked for me. I used it during a pre-employment interview (i.e. we'd-like-to-hire-you, how-much-and-when-can-you-start) over the phone. They asked me how much I wanted, I told them something like "I'm really more interested in the work than the exact salary; do you have a number in mind?" (pretty much straight from the method). They suggested X. I'd been hoping for a bit more, so I asked if I could have "time to think about it", and politely ended the conversation.

Half an hour later, they called again offering X + $5000. I took it.

There's no reason not to try this first, and then fall back on one of the phrases rokusan suggests if they seem unwilling to counter with an offer. They're not going to stand up, throw their clipboard down, and storm out the door because you didn't name a figure the first time they asked. If they keep pressing you for a number, you still have the opportunity to switch tactics if you don't want to risk pushing further.

That said, about getting "bumped down the list" -- frankly, any company which is both "financially constrained" and refuses to tell you how much they're looking to pay is hoping to low-ball you. This is exactly the situation the Smith-Wenkle method is designed to avoid; the idea is that getting passed over at one company is better than working for years at a company which is deliberately paying you less than you could have had elsewhere.

Obviously, if you're desperate for a job or you're dreaming of working at one particular company, this method may not be for you... but if your options are open, I think you might as well try it and see what happens.
posted by vorfeed at 2:53 PM on February 4, 2010 [2 favorites]

I cannot answer for pocams, but in hiring I have done (myself and done as part of a group), there is seldom "a number in mind".

What there is is a rough idea of what a position is worth, depending on the industry and the market; a number that the employer is willing to pay if necessary; and another number that is what the employer wants to pay, ideally. These are often three different numbers, or even three different ranges, and they may change over time as the pressures of not having a position filled mount or decline. It's not a binary thing.

Even more fuzziness: in the particular kinds of hiring pool in which I wade (creative and technical), there can be a very large range of possible salaries for most given positions, depending on how much we think a person can actually bring to the table, and/or what "soft" skills they may contribute to the challenges of the job/project.

Which is to say, other than jobs at McDonald's, in call centers or maybe on assembly lines, the precise job and job value of two people with the same formal position and responsibilities is seldom identical, which means it's seldom comparing $3 apples to $3 apples. (With people, it's more like a $4 probably-a-Granny-Smith with a really nice color vs a $3.75 I-think-that's-a-Golden-Delicious, and it's bigger.)

You're not just a number yourself, right, and you're definitely not the same number as someone else applying. You can probably imagine working for various numbers, depending on the situation and other factors. It's the same from the other side of the table: the employer can imagine paying you a wide range of salaries... depending on your other factors that come beyond your technical qualifications... and they're not sure yet either.

They're just getting to know you, after all.
posted by rokusan at 2:55 PM on February 4, 2010

(Oh, and in most of my work we're hiring many people at the same time, so there are overall budget concerns that also blow the whole "This job pays (x)" out of the water. Spending more on Steve is allowed, but that will mean less left over to offer Larry, Bill and Melinda.)
posted by rokusan at 2:57 PM on February 4, 2010

My partner went through a period a few years ago where he changed jobs several times. During this time, he learned how to "negotiate" a salary: by being honest about what he wanted and needed. It really turned out to be less a big deal than we expected. In return, whoever was doing the hiring would also be honest. Sometimes they weren't able to agree, and then he wasn't able to take the job. (Though one place that happened with called him back a few months later with a higher offer--it was still a cut for him, but he wanted to work for the company and they were able to make an agreement for a bigger-than-normal raise after X time).

It looked a lot like what rokusan described.
posted by not that girl at 3:02 PM on February 4, 2010

Years ago, I tried the Smith-Wenkle method during a salary negotiation. The hiring manager asked me what salary I was looking for. The response given by vorfeed is pretty clever (I'm more interested in the work, etc.). I said something that I was told to say which was "Well, I don't want to disrupt the salary structure here, how is this sort of position typically compensated in your organization?"

This really seemed to fluster the hiring manager, though and he said "Well, we've never had this kind of position before so we don't have a pay scale. Just tell me what you're looking for." Now, looking back on this conversation I have realized with hindsight that this was possibly an indication that I was not a good fit at this place. I did want the job, though, and wanted to try to remain firm as I tend to be too accommodating with this. So, I tried to reformulate and said "Well, given where I would fit in the management and production structure, where would you estimate I would be? What is the range you were considering?"

This flustered the hiring manager more and he sputtered "Just write a number on this piece of paper and pass it to me." So, I wrote down what I thought was a decent number. He accepted it immediately. So, yeah I probably lowballed myself. A contributing factor was that I had moved from a very small city to a very big one and didn't understand the new market. But I also felt a bit bad that I had been maybe... mendacious? I just prefer to be a real straight shooter to the best of my ability.

Ultimately, I'm thankful now that, as a professor, I am paid on a pay scale that more or less conforms across an institution.
posted by Slothrop at 3:05 PM on February 4, 2010 [1 favorite]

Here's an interesting data point: the resume of the author of that negotiation method. Notice how contract engineering seems to drop off from the author after 1982, when the author reportedly learned about this method.
posted by pwnguin at 3:07 PM on February 4, 2010 [1 favorite]

I just read the link to the Smith-Wenkle method (I had only had it outlined to me by someone who had done both a fair amount of job hunting and a fair amount of hiring). The last step is incredible! I couldn't imagine saying something so weird outside of a Bond movie.
posted by Slothrop at 3:12 PM on February 4, 2010

I have to throw the question back at you though - you have a number in your head. You've admitted as much. Why aren't you willing to state the salary you're willing to pay?

There's a basic inequality - an employee might change companies for a $5k or $10k raise, but a company won't usually change employees for a $5k or $10k savings.

Think of being in the final stages of an interview. You've just discussed how great the company is, they've told you about their nice benefits package, free parking, perks, etc., and you're feeling good about the job. They tell you honestly what they can afford, and it's $10k less than you wanted. If you don't have any other hot job prospects, it's easy to rationalize away the money difference and take the job. You find out a few months later that you really do need that extra $10k, and you're gone a few weeks later.

On the other hand, you can be fairly confident that a company won't stretch their salary range by a few thousand dollars to get you in, then change their minds a few months later, since it costs so much to hire and train someone. They're risking much more if you come down to their number than you are if they come up to yours.

frankly, any company which is both "financially constrained" and refuses to tell you how much they're looking to pay is hoping to low-ball you.

I won't deny that. The company I was working for was small and doing poorly, and our IT candidates were either fresh out of school or self-taught and looking for their first real IT job - most were working in tech support or customer service. My advice is probably much less applicable for "higher-level" jobs.
posted by pocams at 3:59 PM on February 4, 2010

Best answer: I do research on negotiations (in academia, so maybe I don't know anything about the real world) and I think the Smith-Wenkle method seems like a passive aggressive strategy that won't generate any extra money.

Some general tips:

1. Get information. Lots and lots and lots of information. If the hiring manager wants to pay you $35,000 and the median salary for someone with your experience is $50,000, that fact matters. The information should never be used as a weapon, but can be a guide that provides guide-posts for both of you. The hiring manager is probably just as uncomfortable about negotiating as you are, so extra information will help you both.

2. Figure out what your BATNA (best alternative to a negotiated agreement) is and write it down. When people negotiate, they want to make a deal because making a deal feels good. Sometimes, though, its the right thing not to reach a deal. If you already have a job, keeping that job and that salary is probably your best alternative. The new deal has to beat your best alternative for you to take it.

3. Try to negotiate multiple issues at once instead of getting bogged down around a single number. One of the most successful things you can do in a negotiation is to talk about more than one issue at once. If you're just talking about salary, your win is their loss. If, however, you're talking about salary and moving expenses and responsibilities (etc), you have an opportunity to create value for both sides. You, for example, may not care about being on call weekends but that may be very valuable for an employer. If you're good at this, you can turn what's normally a stressful confrontation into something that's more like problem-solving. Even if you think there aren't multiple issues to negotiate there are. It's just a little challenging to find them sometimes.

4. There is an advantage to making a first offer. The first offer "anchors" the negotiation. For example, if I offered you $100,000, your response would be based on that $100,000. If you provide the first offer, you can anchor the starting values at a higher level. And, if you use the information you collected, you can show that the first offer is reasonable (or use the information to anchor the negotiation without making an offer).

I know that's alot of information in a little space, but the data suggest this stuff works. I doubt that Smith-Wenkle method can back his claims up.
posted by eisenkr at 3:59 PM on February 4, 2010 [14 favorites]

I -hate- negotiating. So, I don't. Here's what I've told hiring managers in the past. "I'm not going to haggle with you, not even a little. Offer me a salary, and I'll either like it or I won't. If I don't, I'll move on and you can talk to other candidates. But if you try to lure me back with a higher salary, I absolutely won't accept it. You'll be irritated I made you raise your figure, and I'll always wonder if I should have held out for even more. So, let's skip that process and have one and only one offer."

Worked fabulously at one job, made the HR person furious at another job. :-)
posted by browse at 4:04 PM on February 4, 2010 [6 favorites]

I found this on yahoo some months back... saved it ever since.

Negotiating Salary: Earn $1,000 a Minute

When it comes to negotiating your salary, the most important thing to do is not give the first number.

The person who gives the first number sets the starting point. If you request a salary higher than the range for the job, the interviewer will tell you you're high. If you request a salary lower than the range, the interviewer will say nothing.

You can only hurt yourself by giving the first number. You want the interviewer to tell you the range for the position, because then you can work to get the high point of that range. But you can't work to the high point if you don't know it.

Hold Your Ground

So if there are two good salary negotiators in the room, it will be a game to see who has to give the first number. Fortunately, the company cannot make you an offer without also offering a salary, so the cards are stacked in your favor, as long as you hold your ground.

It is hard to avoid giving a salary range when you want the job and you want to make the interviewer like you. But remember that this is a moment when you could be making $1,000 a minute. As long as you stick to your script.

So what you need is a list of responses for the 10 different times the interviewer asks you how much money you expect to make. The more times you can fend off the question, the less likely you will have to be the one to give the first number. This works, even if you feel like you don't actually have the upper hand on the whole.

Some Examples

* "What salary range are you looking for?"

"Let's talk about the job requirements and expectations first, so I can get a sense of what you need."

* "What did you make at your last job?"

"The position you are talking about here is not exactly the same. Let's nail down what my responsibilities would be here and then determine a fair salary for that job."

* "What are you expecting to make in terms of salary?"

"I am interested in finding a job that is a good fit for me. I'm sure whatever salary your paying is consistent with the rest of the market."

* "I need to know what salary you want in order to make you an offer. Can you tell me a range?"

"I'd appreciate it if you could make me an offer based on whatever you have budgeted for this position and we can go from there."

* "Why don't you want to give your salary requirements?"

"I think you have a good idea of what this position is worth to your company, and that's important information for me to know."

Mirror the Interviewer

You can see the pattern, right? If you think you sound obnoxious not answering the question 10 different times, think of how obnoxious it is to ask the question. The interviewer is just asking in order to get a leg up on you in negotiations. If you give in, you look like a poor negotiator, and the interviewer is probably not looking for someone like that.

So stand your ground, and understand that the interviewer is being an insistent as you are, and it might warm your heart to know that research shows that if you mirror the behavior of the interviewer, you are more likely to get the job. Sure, this usually applies to tone of voice, level of enthusiasm and body language, but who is to say that it doesn't apply to negotiation skills as well? Try it. You could come away $10,000 richer.
posted by yoyoceramic at 5:29 PM on February 4, 2010 [7 favorites]

I have a great deal of respect for browse's philosophy above, and eisenkr's third point is a great way of formalizing what I was getting at with my examples above. If you make it all about some mythical single number, it all becomes a game that trivializes a real negotiation, and marginalizes your overall worth/value.

Sometimes playing games just hurts the players.
posted by rokusan at 5:42 PM on February 4, 2010

Response by poster: I agree that taking the focus off of the salary is a good idea, but I'm not sure you really can negotiate multiple things at once. Frequently:

- The role is fairly well defined and in order to change the role, the company doing the hiring would have to bring on other people or change the responsibilities of existing employees. Surely this would be seen as a petty negotiation tool "For that salary, I won't do 100% of the job responsibilities."

- The benefits are not really negotiable, and even if they technically are, they're the most visible part of the job. Coworkers don't know your salary, but they do know that you get an extra 3 vacation days a year, go home early on Fridays and get prescription drugs for free.

So what's left to negotiate? If you introduce things that you don't particularly care about "I'm going to need two days a week for the next six weeks in order to wrap up affairs at my old job" or "I have a 2 week trip scheduled in July, and I know I won't have built up enough vacation days at that point, so I'm either going to need an advance on my vacation days, or to take an unpaid sabbatical," you can give that up during the negotiation.

The Best Alternative concept is good. I think it's sort of how we all work already, the problem is we want to maximize salary well beyond this.

I've heard of Anchoring before in psychological literature, but it has to get around the "They may have been willing to offer me more" factor. Or maybe someone using this tactic has to get past the "they may have been willing to give me more / what if I highball them and they don't take me seriously" belief system.

If anything, this thread shows that hiring managers are pretty much in the same boat as employees - not really keen on negotiating, and willing to judge the other side based on whether or not they're being jerks in the process.

Whenever money is involved, ego is bound to rear it's head and making it into a win/lose situation isn't good for anyone.

I think rokusan's advice above is good. It tentatively answers the question, but makes it a conversation & not a staring contest. It sets a range, but doesn't do it in a move-counter-move way. It allows you to anchor, to negotiate on things other than just the salary, or at least discuss things in terms other than just the salary, and allows you to rise above all the jerkey BS.

I suspect the "Stare them down" tactic may work some of the time (as is evidenced in this & other threads), but backfires much of the time too (again, the evidence is all around, and this thread gives us some insight into why). So perhaps you can start with that & then have this in your back pocket to pull out if things begin to go south.

yoyoceramic- thanks for the quotes, I'll be sure to read these over and feel them out.

Re: Mirroring. I call this an "icing" tactic. It's useful, but you can't ignore the meat & potatoes of the basics & expect the icing to make the meal. It is absolutely real, though.
posted by MesoFilter at 8:00 PM on February 4, 2010

Here's an interesting data point: the resume of the author of that negotiation method. Notice how contract engineering seems to drop off from the author after 1982, when the author reportedly learned about this method.

pwnguin, if you can read his resume that far, then maybe you can take it a little further: the author of that negotiation method went into self-employment that same year, has been in academia full-time since 1987, and, um, also had another contract job in 1992. Which is a full ten years after your supposed "drop-off" point.
posted by vorfeed at 8:50 PM on February 4, 2010

frankly, any company which is both "financially constrained" and refuses to tell you how much they're looking to pay is hoping to low-ball you.

I'd suggest that it's far more likely they are something worse: some combination of completely uninformed about the reality of the market and completely inconsistent with regards to how they compensate their employees.

You can make your own decisions about whether you want to work for places like that. I decided years ago that I wasn't willing to be a part of a place that embraces ignorance and/or is comfortable being inequitable to their employees. So when an organization tries to make me pin down a number without their ever giving me any idea of the range they believe is appropriate I'm about 90% of the way to writing them off.

So my opinion is that if you make a hiring manager angry with the approaches that have been discussed a thousand times on Ask - good riddance. Admittedly that's easy for me to say at this point in my career and with my current level of security, so you have to make your own decision.
posted by phearlez at 7:32 AM on February 5, 2010

One important thing to keep in mind is that positions are sometimes budgeted in advance. I have worked with recruiters who don't send me candidates who either refuse to indicate salary expectations or whose salary expectations are completely out of step with our budget. Once I start talking with candidates, I tell them clearly, "This position is budgeted for $X-$Y," but there are some applicants I never get to talk with because they don't reveal their expectations.
posted by yellowcandy at 8:53 AM on February 5, 2010

Response by poster: yellowcandy- Once again. You have a number in mind, yet you make the candidate go first. Why?
posted by MesoFilter at 9:07 AM on February 5, 2010

Response by poster: Actually, nevermind, I see that it's the recruiter matching the two salary ranges.
posted by MesoFilter at 9:46 AM on February 5, 2010

What's worked for me is two things. "The work is more important to me than the exact salary." and "What do my colleagues generally make?" This answer tells you the answer you can probably get 5 grand more than. You can feel that out by saying you've had higher offers but really like the place.
posted by xammerboy at 1:49 PM on February 5, 2010

Whatever salary you reach, pretend it's a concession. You made more / were expecting more, but really like the company so you are fine with just taking extra vacation or, because family is so important to you, telecommuting Wednesdays and Fridays. You're currently taking a class, can they work with that schedule, etc.

You may think this is obnoxious, but what's really obnoxious is that this will be the only time for either a really long time or ever that you will have leverage to negotiate. If you want it, try and get it now, during the salary negotiation. The minute you start working your company owns you and will always take advantage any time they can.
posted by xammerboy at 2:04 PM on February 5, 2010

- The benefits are not really negotiable, and even if they technically are, they're the most visible part of the job. Coworkers don't know your salary, but they do know that you get an extra 3 vacation days a year, go home early on Fridays and get prescription drugs for free.

Hmm. I wouldn't write this off so quickly. I was on the edge of turning down a job I wanted but didn't have quite the salary range I was looking for (but very close). I had hit a wall but I was able to start working with them on the percentage they contributed to insurance. The savings amounted to perhaps $3-5k a year, enough to make me feel ok about accepting.
posted by jeremias at 8:36 PM on February 5, 2010

Add a few thousand a year to your current salary, and call that new number $xxxx. Say:

"Currently, I make $xxx a year, get two weeks of paid vacation, and have a 2% match to my retirement. I want to do slightly better than that in order to move."

At that point, it's best to indicate "I'd love to have even a day or two more of vacation", if you're me; I'd much rather than 10% more of the year off than a 10% higher salary.
posted by talldean at 12:25 PM on February 6, 2010

I have to question the Smith Wenkle method. It's summarized as:
The person who gives the first number sets the starting point. But if that's you, you lose. If you request a salary higher than the range for the job, the interviewer will tell you you're high, and you've just lost money. If you request a salary lower than the range, the interviewer will say nothing, and you've just lost money.
I agree there are essentially two possible outcomes to naming the first number:
  1. You ask low
  2. You ask high
The Smith Wenkle method claims the outcome will be:
  1. Your request is accepted, and you're underpaid - Agreed
  2. You'll be negotiated down, and you're underpaid - Disagree
My beef is with #2. If you request high, and you're negotiated down, that doesn't mean you've "lost money." You weren't going to get your high number in the first place -- perceiving the difference in what you asked for and what you're awarded as a "loss" is self-deceptive. In fact, I would bet you'll wind up with a better figure overall if you start high and are negotiated down, than if you let the company start in the middle and negotiate up.

The original write-up for the Smith Wenkle method indicates it's designed to correct for the fact that "many people underestimate their worth." But based on my Googling, it looks like it's turned into the strategy that's advised for everybody, all the time. It seems, to me, however, if you do your research and name a high-but-not-absurd figure, you'll actually wind up better off.

Doing so certainly worked for me, anyway: I just finished a negotiation a couple days ago. The situation was a little different, because the company took the rare move of putting their salary range in the job description, but I simply asked for a figure somewhat higher than their printed max, we negotiated, and I wound up still a few thousand dollars above the "max." I'm very happy with my new salary.

(Thanks to the advice on this thread, BTW, for getting me to think deeply about these issues.)
posted by twobit at 9:24 AM on March 10, 2010 [2 favorites]

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