When it comes to salary negotiations, who really gets the best deal? Is there a magic formula that clearly states what one should be offered based on all of the parameters (experience, compensation, location, etc.)?
As we get older and progress in our careers, the terms of accepted job offers go off in different tangents based upon our lifestyles and what is really important to us. In our 20’s, it’s all about the dollars. In our 30’s, compensation is still dominant but career advancement starts becoming even more important. In our 40’s, we realize that we better have our act together and that wages and the career path are on the right track. In our 50’s, we look back and hope that the decisions and job offers accepted years earlier were the right ones.
Here comes the golden question: ‘How do we KNOW when it is right to accept?’ In these economic times, and since October 2008 when everything came crashing down, those interviewing for positions are no longer in the catbird seat; it is the interviewers that hold most of the cards. No one wants to ‘settle’ for a position (see the Staffing Trends column from 12/09 discussing ‘taxi jobs’) but an increasing large number of people are doing just that.
Mortgages, children’s college tuitions, car payments, etc. are all viable reasons to not hold out for too long when job opportunities turn up. The reality is that wages are lower and, with so few good positions out there, many of us have come to the conclusion that if it looks pretty good, we better accept it.
Most companies realize that they have the upper hand in negotiations but fortunately many don’t abuse their authority. They are looking ahead and hoping that they can provide a competitive package that will entice a new employee to stay longer than the average of three years.
– Short term=the new employee is excited at being brought in at a mutually agreed-upon reasonable salary.
– Long term=the chances for a multi-year (and happy) employee is much higher.
Unfortunately, there are others who want to grind and low-ball the salaries and benefits all the way down so people will ‘settle’ to go work for them.
– Short term=cash savings.
– Long term=poor employee retention and a bad reputation in the industry. Greed is a killer and people do talk in our industry.
Why does one company have a reputation of not paying as much as another? And why can some companies freely show people the money?
For Company A, which pays a higher salary, it comes down to ROI. The return on investment is vital for any company that devotes large dollars into anyone. If someone can hit the ground running and start paying for themselves quickly, it is a good match. If an employer ‘takes the chance’ on someone, pays them well, and has to train them to get them up to speed, the possibility of it not working out increases dramatically.
For Company B, which pays a lower salary (and not necessarily a low-baller), they may 1) have the ‘luxury’ of being able to spend time to train someone or, 2) have found a way to attract candidates with a higher bonus potential.
From the company’s perspective, especially in the electrical industry, experience is the dominant factor. After that, in no particular order, comes reputation, evidence of success, education, residency/commute time, culture fit, and appearance (yes, attractive people do have the edge), amongst others. Of course, things like gender and age have no part in hiring decisions, right?! (Maybe that’s for a future column.) All of the (legal) parameters basically go into a big pot, is stirred around and we have a range for an offer. There are a ton of books out there that purport to advise the right way to negotiate an offer; from both the perspectives of the employer and employee.
– Employer: One tactic is to ‘offer low and leave some wiggle room to move higher’. Another states that ‘this is the one and final offer; and not subject to negotiation’.
– Employee: One may say ‘never take the first offer and ALWAYS ask for more’. Another may want to
negotiate a lower salary for a higher back-end bonus potential.
Who’s to say that either one is right or wrong? We all have our boundaries as to what part of an offer is the dealbreaker. For one it can be the cash. For another it could be the benefits. And even another is only concerned with career advancement. We can see how our age and other personal issues in our lives can affect our decisions. Whether for a distributor, manufacturer, rep or contractor; and whether it is sales, management or another position, it has to be a good investment for all parties. An employer is investing money, time and energy into a new employee while that new employee is investing the same into a career and life-changing situation. Make sure that any future offer has your best interests at heart.