If you need another reason to be an expert negotiator when an offer rolls around, which it will, consider the future value of money. The future value of money is a common financial calculation that involves calculating the future value of money now based on interest and time. What it basically says is that $1,000, $5,000, $20,000 or more now over the course of your lifetime of employment can literally mean thousands of dollars to you. Negotiating job offers is not something you do every day, just like buying a car, so the more prepared you are, the better terms you will receive. Because of the future value of money, you want to negotiate as effectively as you can to get more money NOW. Keep in mind, you only have one shot at getting your starting pay negotiated.
Try not to negotiate or discuss pay too early. Until you have gone through the complete interview process, determined that you want to work at this company, and have been given a formal written offer, try not to negotiate or discuss pay. In fact, do your best to avoid the topic, even if it is brought up by the company during the interview process. When asked what pay you are looking for in an initial meeting or phone interview, keep your answer simple. I am flexible, I am open, would like to learn more about the position, etc.
If appropriate during the flow of the conversation, turn the pay question around by saying that you would consider all competitive offers, and then ask what the pay range is. They may or may not tell you, but either way this will often end the pay topic for now. There is basically no upside in having in-depth pay discussions with anyone at a company until both sides have decided they want each other. You want to spend your valuable time during an interview selling yourself, not talking pay.
Watch out for the "current pay" question. You may have the philosophy that you will never tell a prospective employer your current earnings. I've ran across these people more than a few times. They probably read somewhere that you never ever disclose your current pay no matter what. Be prepared if you do go this route, that it will likely backfire. It won't make you look very good, and even a little paranoid, to your potential employer if you are adamant about not disclosing this information. Be up front and share your current pay, butonly if asked. If you can temporarily sidestep the question, great, but if they say they require this information, just give it to them. You may say that it is not there business. Like it or not, and whether it is the company's business to know, you need to share this information if asked or pressed for it. Not sharing, and being untrusting to a future employer and hiring manager, will often end or hinder future discussions, or at least drop you down a few notches.
I realize that many people believe they are paid too low, or they have heard a story about a guy making such and such doing the same thing at XYZ company. This may be true, but you must have some trust that employers in your industry have some idea as to what the current pay standards are. If not, you will have plenty of time to educate them after they offer you the job. You may say, well won't I be wasting my time if I do not know upfront what the pay is? Do not worry about wasting your time if you do not know what the current pay is prior to an interview. Often you will know, sometimes you will not. That is the risk you take interviewing and trying to better your current situation. There is no plug in formula for pay, and many factors discussed later cause it to vary.
Keep in mind, even if you know the pay range and think it is too low, nothing is set in stone. You may really like the company, industry, market, etc. I have witnessed numerous occasions where a pay range is known, and the company goes way beyond it. Why? Because the really wanted this person. You may notice that the advice we are offering has to do with you GETTING THE JOB FIRST, before making pay an issue. This is the best negotiation tip we can give you. You are in a position to negotiate and make demands only when the company and hiring manager wants you. Of all of the things to be concerned with during the interview process, pay should be towards the bottom. Focus on making a friend and selling the skills you possess that will make the the company and hiring manager desire you. Basically, you are negotiating through the entire interview.
When the offer arrives, review it thoroughly. Make sure you truly understand all of the terms and conditions. Do not react to it negatively or positively right away. Study it, let it sink in, and stay level headed regardless if it's more or less than that what you thought it would be. Ask yourself what your initial thoughts are. Too high? Low? Seems fair? Wish this was in it? You need to be clear about what you really want and are willing to ask for in addition. Also, do not feel like the negotiation Gods are going to strike you down if you just decide just to accept it. If you factor in the position, company, pay, etc., and it all seems like a nice deal and you feel good about everything, go for it. Most of the time, however, you should be asking for more.
If there is a component missing that you were hoping for, ask for it, but do it professionally. There is absolutely nothing wrong with negotiating an offer. Don't operate out of fear. They are not going to take it away. They want you. You will not offend anyone and most companies actually expect to negotiate. When you have decided what you want to do, you can respond informally, by letting the hiring manager, HR person or recruiter know specifically what you would like changed. If they require a formal response, or if you would feel better doing this in writing, then go that route. Ask the employer how they would like you to respond.
Keep this in mind, studies have shown that a high percentage of offers would be negotiated on the employer's end, yet only 1/3 of candidates ever ask for more or better terms. Needless to say, you will benefit immensely long-term if you get better terms now.
Factors that can influence an offer:
Business Factors - What is the current state of the industry you are in? What is the general state of the economy (avoid watching the evening news for proper mental functioning). Is the unemployment rate high in your area? Is the supply and demand for your skills high or low?
Employer Situation - Is the company doing well? Profitable? Losing money? Are they a start-up, mature, or in a turnaround situation?
Position / Hiring Authority - Is the position urgent? How long have they been looking for this person? What is the competition and availability of other candidates for this position?
You Factors - Do you have other offers? It is certainly okay to share this information during negotiations, since it will often lead to a better offer. It is probably the best and easiest way to negotiate an offer. NEVER lie about this. What is your technical or non-technical expertise? Is your skill set, knowledge, experience unique? What is your financial situation?
Tip number one: Make them want you. This is the best tool you have for negotiating. Hiring managers have a lot of pull and will usually do what it takes to get the person they want.
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