Job search is sales. It is. Most of us dislike this, we dislike thinking of ourselves as a product and we dislike the idea that we need to approach this like a salesperson. Still, there is just so much that we can and frequently need to learn from the sales process and price/salary negotiations is one of the critical areas for us to look at. Using “car buying” as a model (it’s something we all do and we all negotiate) let’s break the process down.
- When we walk into a dealership, one of the first things we do is look at the sticker price on the windows of the various cars in the show room. If there isn't a sticker on the window, then we will most likely saunter back out the door and not come back. When HR asks us what our salary requirements are, they are looking for “window stickers”. If they can’t afford you they want to know early, just like you do when you shop for a car. If we don't answer, if we don't show them the sticker price, then we can expect them to "saunter back out the door and not come back." If what you can afford is $30,000, and you go to a BMW dealership, you find yourself in the “Used” lot very quickly. Either that or you head for Toyota dealership. The employer has the same problem. They have a budget. You need to give them enough of an answer so they can know that you are both on the same page.
- Establishing a price is based on “market value”. There are a variety of tools for you to use to investigate this, I recommend Payscale.com, but it’s one of many. These will give you a reasonable understanding of what the market for your job title/skill set is and where you should be on price.
- Develop an understanding of your requirements as well. Remember it’s not the same as what you are asking for. Go over your budget and figure out what you need to spend every month. This allows you to understand what you can live with and sometimes a job has non-financial benefits that justify the investment, so know what you need, separately from you used to make and what you hope to make. Thinking of the car buying analogy, it’s what the dealer pays: The cost of the vehicle plus the commission of the salesperson plus the cost of the building plus the cost of financing the car while it’s waiting to be sold. So what are all of your costs?
- Review real offers the way a car salesman reviews your offer.
- Is the offer for your asking price? If you were the car salesperson you would go get a contract, so what’s the equivelant? Say, “Thank you, when do I start?”
- Is it below that? Now you need to think through this carefully. What is your real need? Where are you in the range you’ve researched? Is it a respectful offer? If you are the car salesperson you would be evaluating if it was close enough to accept, assuming the buyer wasn’t going to budge.
- Understand that their offer has roughly the same force as your first offer for that new car. The car salesperson would now ask something like, “If I say ‘Yes’, will you sign right now?”
- If you are at 75k and they offer 50k, then try to understand why the two of you are so far apart and think about a counter-offer. The car guy would be grimacing and asking why your offer was so low and thinking about what he could live with. In this case, his likely minimum is 65k, so he would need to understand why you made an offer that far below the sticker. As that discussion occurred, he would be going through an inventory of actual costs to see if there was some way for him to be open to a number closer to yours.
- Is there a benefit that offsets some of the differential? Do they pay a bonus? Do they provide stock? Will they give you extra vacation?