How to Negotiate a Compensation Package

What's the Big Deal About Compensation?         

           You work in your dream career in the fastest growing industry in America. You put in your 40 hours a week, sacrifice your time with family and friends, and set aside your own life goals in order to support your children's college fund. After years and years, your children are grown and have families of their own, and you begin to discuss with your significant other that it's time you put away the briefcase and set off for that vacation to Paris you both kept putting off. The next day, you approach your employer and tell them of your plans to retire. Your boss smiles warmly, "Of course! Congratulations, and thank you for all your hard work. It meant a lot to us," and he dismisses you from his office. After 50+ years of dedication and sacrifice, all you got was a handshake and a door closed behind you.

What's in the Typical Employee Compensation Package?
         
            Now that I've installed a sense of brevity, Employee Compensation Packages are as essential to the American Dream as death or taxes. When you are searching for your entry-level positions into the career and industry of your choice, be sure to research the rate of compensation in your industry. A personal favorite online source to use is Salary.com <http://www.salary.com> or LinkedIn. They provide not only the national average salary of thousands of positions, but they also report the percentage of total compensation provided by major companies in that industry. A word of caution, though. Just because it's the national average does not mean that you are getting a good deal out of your employer. In this case, it literally pays to be knowledgeable of your options.

The standard Employee Compensation Package will include the following:

1. Life Insurance (whether through the employer or discounted from an external provider)
2. Medical Insurance
3. 401K Retirement
4. Annual Salary
5. Dental Insurance (provided separately because most employees opt out of coverage)
6. Employee Assistance and Counseling

             Other benefits that are more specific for larger corporations include free parking for employees, casual dress for Fridays, discounted purchases of company stocks, and paid holidays. Although these are wonderful, by law, employers re not required to give you these extra benefits. My point being, don't get your hopes up. Some companies will even take away these benefits when the company is in financial distress.

How to Negotiate Like a Professional

1. NEVER negotiate salary during the first interview!!!!

              Salary is the second to last matter to discuss when speaking to a candidate. From the point of view of the interviewer, the candidate isn't interested in the company or its values. Therefore, the individual doesn't have the companies best interest in mind. I've had interviews where the individual being interviewed said she required at least $14/hour during our discussion about when she would be able to start working. We politely told her that those matters will be discussed later, to which she responded, "So, I will get the job, then." The short answer was, "no." The long answer was, "Not with that attitude." A good rule of thumb to use is do not discuss any monetary compensation until the matter in brought up by the interviewer specifically. You can't go wrong if they bring it up first.

      2. Don't use round numbers.

              For example, most new employees will tell an employer that they would like $65,000; $90,000; or $120,000. According to a survey conducted by the Wall Street Journal, most employers are more willing to give you a higher than average salary if you come back with a specific number. Not along the lines of $127,251.72, but precision makes it obvious you have done your research for the industry and are prepared to settle on a competitive salary.

       3. Have a clear idea of what you are willing to give up.

              Unless you have more than ten years of specific work experience or a PhD in your field, you will not receive every benefit you desire. Everything from medical insurance coverage to the size of your desk should be closely considered. Even if you are paid over $100,000 per year, are you willing to work out of a school desk and have no paid vacations?

        4. Introduce a little bit of leverage.

     

               It may sound sneaky, but alerting your future employers of other company compensation offers is a great way to add a little extra to your benefits. Keep in mind that you are in demand in the job market, right now. You are literally selling your knowledge and talents to some lucky person in the audience. A good tip to keep in mind is to see how the employer reacts to being challenged with a better offer. If they are rigid and become defensive, it's a red flag that they will react that way when you request a raise or promotion in the future.

         5. Show your enthusiasm about the position.

                 Pure and simple, if you show you are serious about a position, you are more likely to receive what you ask for. An apathetic attitude shows that you aren't committed, or you are debating taking an offer from another company.

         6. Be prepared if caught off guard.

                If you are asked about salary, and you have not prepared for whatever reason other than laziness, ask productive questions such as: 

• “What is the range for this position?”
• “I’m really excited about the opportunity to work for your company, and I am willing to consider a competitive offer.”
• “Compensation isn’t my only consideration, but I’d like to make sure we’re thinking along the same lines. What range do you have in mind for this position?”

          7. What if I don't like the package offered.

                   There are two options at this point; take the job or search for a better offer with another company. If you decided to take the job, options that are still available to you include a 60-120 day performance review in which you can officially decide if the job is the right one for you, requesting a salary increase and promotion after a year of working with the company, or working hard for bonuses. This decision weighs heavily on the previous discussion of what you are willing to give up. If you aren't willing to work an entire year for a small raise that may or may not happen, don't take the job.

If You'd Like to Learn More

• More information about Social Security:  <http://www.iidc.indiana.edu/disabilitybenefitsandwork/socialsecurity.htm>
• How 401K plans work:                                                        <http://money.howstuffworks.com/personal-finance/retirement-planning/401k.htm>
• Disability benefits:                                                                                    <http://www.ssa.gov/disability/>
• Definition of a pension plan:                            <http://www.investopedia.com/terms/p/pensionplan.asp>
• What you should know about healthcare:                                                    <http://www.hhcsinc.com/>
• More info on discussing compensation:                          <http://www.state.gov/m/dghr/flo/c21638.htm>