Making an Informed Decision Accepting a Job Offer Making an Informed Decision

Purposes of Workshop discuss negotiation positions identify elements of an offer view sample decision matrix recognize ethics of offers

Congratulations! You’ve Got An Offer!!

Now Comes the Challenging Part know your bargaining position making an informed decision savvy negotiation accepting

Strategy of Negotiation foundation—what you do to ensure your bargaining position is as strong as possible start working on it well before you sit down to negotiate details builds your bargaining power makes the most of your talents, education, job experiences, and recommendations neutralizes your limitations

Bargaining Position strong position more typical position lots of offers, outstanding tech skills, little competition name your price, but w/strategy you want them glad to have you, not resentful of your demands more typical position really want the job terrified of losing it by being too aggressive doesn’t negotiate effectively

Bargaining Power research industry standards for compensation resources are trade magazines salary surveys by NACE, CSO, SHRM, etc. alumni American Almanac of Jobs and Salaries Occupational Outlook Handbook www.bls.gov/oco www.rileyguide.com/salary.html www.salary.com and other Web sites develop other job offers

Know The Market what is the going rate for the position do your research what positives or negatives might cause a deviation from the going rate how much bargaining power do you have what factors are most important to you what is your best alternative plan what is the lowest salary you can accept

What Can The Employer Offer salary signing bonus bonuses commissions moving allowance early performance review health plan tuition reimbursement stock awards or options profit sharing pension or 401(k) lifestyle issues severance package

Salary base for figuring bonuses and raises savvy negotiating often improves an initial offer---sometimes dramatically difficult to get same boost on the job even w/excellent performance

Signing Bonus offered when they can’t pay a competitive salary right away or luring someone away from a competitor keeps departmental salary structure because they are hidden from view as not being a part of regular payroll often payment of bonus is delayed to keep you from getting money and running commonly paid half at 6 months and remainder at 12 months

Bonuses best if tied to measurable criteria requirements for earning it performance of a sales team you support reward for completing a schedule ahead of time reward for recovering a business relationship that was lost based on customer satisfaction based on money saved through operational streamlining finder’s fee for recruiting needed staff members tied to the number of new customers brought in by marketing programs

Commissions sales goals commission percentage, standards for meeting it, and additional rewards for exceeding goals size and location of sales territory, degree of exclusivity, and access to specific accounts length of time to keep the territory if you meet your goals

Moving Allowance may be tax-free may include nearly all moving expenses, including hired movers temporary living quarters sometimes costs associated with real estate transactions may be a fixed sum usually negotiable because it is a non-recurring cost for the company

Early Performance Review for salary increase or promotion request a 6 month or even 3 month review if you think you can make a significant impact that fast

Health Plan company sponsored health plans vary widely many smaller firms have none provisions of plan are not negotiable expect to pay at least part of the premium yourself from pretax income review company’s share of the premium look for at least two options to be offered by employer

Tuition Reimbursement standard benefit that can be worth thousands usually have to take night classes classes usually have to be related to something that benefits the company some make loans rather than tuition grants and then forgive a part of the loan for each year you remain after concluding the education try to arrange for any balance to be forgiven if you are laid off may also sponsor educational opportunities informal, on-the-job training mentoring formal courses and seminars

Stock Award or Options most common and lucrative at start-up and early-stage companies key is to argue that bigger ownership gives you more incentive to be of extraordinary value larger, established companies are less negotiable, offer relatively fewer shares, and are sometimes restricted to middle and upper management not so profitable in near-term money, but over 10-15 years they can be sizable do the math…know the number of shares offered and the and percentage of total shares start-up shares are only valuable if and when the company goes public or is sold ask about length of time for vesting before you can exercise options if you’re planning on a short stay, these aren’t of much value

Profit Sharing profit sharing form of incentive pay based on the company’s performance you agree that a percentage of your compensation will be based on the firm’s overall profits or profits from certain deals

Pension Profit Sharing or 401 (k) employer contributes a certain amount to your pension plan each year usually figured as a percentage of your salary based on the company’s profitability company sets aside a portion of your pretax income in a tax-deferred investment account most employers match full or partial contributions in principle, money is supposed to remain until retirement some plans allow for borrowing against it or making early withdrawals buying a home paying your kids’ college tuition medical care must conform to government regulation so terms are not negotiable

Lifestyle Issues location travel schedule need to balance work and family future stability

Severance Package negotiate for 3 months salary if your employment is terminated through no fault of your own this should be the last area of your negotiation bring it up as a conjecture, e.g. what if… get the deal in writing in case your manager is laid off

Determine Negotiating Priorities use these to evaluate offers quality of learning opportunity rapport w/your supervisor respect for your colleagues workplace atmosphere intense or relaxed competitive or mutually supportive chaotic or organized work alone or part of a group or combination of two socializing or being more private

More Priorities to Consider other forms of compensation benefits such as health insurance perks, e.g. international travel recognition, e.g. speaking opportunities company’s prestige importance or value of what the organization produces

More Priorities to Consider vacation and time-off policies usually paid time computed by formula based on time with the company may also be allowed extra time without pay don’t make it first on your list of demands or you look like you’re not enthused about your job flexibility of the work schedule 8 am to 6pm is most common schedule permission to work from home two or three days per week may be better off proving yourself first and then negotiating flexibility may be able to negotiate comp time, generally an hour off for each hour of overtime ask about cashing in unused comp time at the end of the year, but make sure you document your time well

More Priorities to Consider career-advancement opportunities location commuting distance and related considerations, e.g. availability of public transportation or parking on-site facilities, e.g. fitness, child-care centers

Using a Decision Matrix helps stay focused on the factors of most importance to you identifies your main negotiating points recognizes when you should decline an offer

Creating a Decision Matrix list the factors that matter most to you assign each a relative weight out of a total weight of 100 rate how strong the offer is on each factor on a 0 to 10 scale multiply the weight for each factor by the rating you gave add up the results for each factor

Negotiation Tactics what you do to achieve the best outcome considering your bargaining position

You’re Not Buying a Car!! resist the classic sense of negotiation where they offer, you counter, they counter your counter, and so on determine your bottom line in advance and wait for the offer if they offer more than your bottom line, great if they offer less than your bottom line, then walk away or reveal your bottom line and see if they can meet it lay your cards on the table to avoid aggravating the employer

Always Negotiate With The Decision Maker they know more about the job they are more concerned about losing you they have more latitude in taking in special circumstances they are more creative flexible hours extra vacation days signing bonus company-furnished laptop

Avoid Pushing Too Far your deal will be resented you invite over-scrutiny and criticism you have to live in the climate you create

Ask Yourself Questions do you care enough about it to meet expectations is the money, recognition, or intrinsic value rewarding enough are the expectations realistic will you be happy there in six months are there enough challenges and learning opportunities to keep the job fresh over time are you intrigued by the ongoing responsibilities or just solving the initial problem do you commonly fall prey to the grass is always greener syndrome do you stick to what you start how well do you fit into the company’s culture

Never Name The Salary First too high and you risk scaring away the employer too low and you shortchange yourself or devalue the position

Don’t Ask For It All a long list looks like you’re a high maintenance employee concentrate on the 2 or 3 things that matter the most to you consider the other options only as part of your decision matrix for evaluating offers

End of Negotiation Signals final words that signal the end “I just can’t go beyond what I’ve agreed to already” “I think your expectations are beyond what we can do” “Please consider this our final offer” continued pushing will cause alienation and negative outcomes

Immobile Barriers To Negotiation union contract terms policies set by the board of directors, such as formulas for determining pay policies set by management, such as not providing allowances group-hire decisions, such as internships the pay level or your peers or the person you would report to

Offers May Have Strings Attached pass a physical examination document your citizenship or immigration status obtain a security clearance undergo a thorough background investigation , in which your credit history, police records, and travel history might be examined verify your academic credentials provide proof of your past employment, salary, or military service

Ethics to Consider delaying a decision declining an offer reneging on an offer accepting an offer

Delaying a Decision be reasonable, but you can usually get more time to decide if negotiations have been verbal, ask to receive the terms in writing ask for a few days to consider the offer clarify a few points if more time needed

Declining A Job Offer act decisively; don’t string them along further call or email a thank you for the manager’s time and efforts graciousness means you won’t burn any bridges

Reneging On An Offer you accept an offer, quit your current job and your partner quits theirs, sell your house then the company backs out…how does that feel? employer has terminated discussions with other candidates and does many other things it’s disrespectful to the company and lacks integrity it’s dishonest avoid this problem by careful planning about your ideal position

Ethics Of Accepting A Job Offer get it in writing on company letterhead and signed by hiring manager title and major responsibilities starting date person you will report to salary other forms of compensation, i.e. bonuses, commissions and details stock options, dates they will be granted, the vesting schedule perks, e.g. moving allowance, tuition reimbursement, extra vacation time, flextime, early salary review, other special arrangements agreed upon written offer is a contract once it is signed by you if they are reluctant to write it, you do it and submit it file a signed final copy in a safe place stop interviewing and notifying any pending companies

Congratulations! You’re Hired!