Negotiate Salary like a Pro: Know your BATNA, Resistance Point and Opening Offer!

• Can you negotiate for a better salary during a recession?
• What is your BATNA and Resistance Point?
• Who makes the Opening Offer?
• What else should you negotiate, when accepting a new job?

In last week’s Blog, we reviewed the intrinsic factors for career satisfaction and the seven sources of psychological motivation. Take the time to analyze what is truly important to you and what you need for career satisfaction Career Transition Confusion, 7 Types of Psychological Motivation

Now that you have considered the intangible items which contribute to your happiness, lets’ consider the tangible items which you can negotiate – namely salary.

Knowing how to negotiate for salary is essential in today's rough and tumble job market. Additionally, your initial salary and rate of pay will have long term and cumulative effects. If your raises are based on a percentage of your salary, the higher the salary the more money you can make. It is a good idea to get professional advice from a career counselor if you have been out of the job market for a while, are transitioning to a new role, are relocating to a new area or if your are dealing with a large, employer. You can access a career counselor from your university career center, your alma matter or alumni office or you can hire a private practitioner. This could be the best investment you make.

As an adjunctive instructor at GSU’s Robinson College of Business, one of the 13 courses I teach is Salary Negotiations for Business Professionals. My MBA students request this class and are often anxious about how to negotiate a compensation package. As a career counselor, I love helping clients sort through multiple offers. However, each individual is unique and what will satisfy one candidate may be inadequate for another candidate.

Tip #1: Once a job offer has been made, always negotiate the terms and conditions of the overall package. Even if you do not get all of the items you are seeking, it sends a clear message to the employer. It shows the employer that you are valuable and that you have self confidence. This will reinforce the employers’ hiring decision and confirm that you were a good choice.

Tip#2: Know your BATNA. In business, a BATNA is the Best Alternative to a Negotiated Agreement. What does this mean in common terms? Know your options. If this is the only interview you have had in months, your only job offer and your wife is about to have twins – then make the best of it. Can you afford to walk away from your only offer?

If you have multiple, job offers, then you have multiple ‘alternatives ‘and this may not be your BATNA. I’d recommend asking for at least 24 hours to consider the offer and/or discussing it with your significant other (s). Consider if you have other candidates nipping on your heels and if this is your dream job. If so, then it may be wise to ask for less time to review the offer; ask for a few hours or just an evening to consider it. You still have negotiating power. However, you will need to carefully consider your options and not set ultimatums. Negotiate with finesse, and mutual respect will be gained. Remember, you are likely to see these professionals at other industry events for many years to come and you don’t want to burn your bridges.

Tip #3 Know your Resistance Point. The Resistance Point is the minimum amount of salary you will need, to pay the bills. Your resistance point doesn’t change. Every job seeker should carefully review their monthly needs, expenditures and budget. How much do you need to cover the monthly bills? Always keep this in mind. Unless you are willing to drastically, downsize your lifestyle, living arrangements etc, you cannot accept an offer below your Resistance Point. Every salary should be based on the job title, job duties and the relative importance of a particular role or department. Is your department a cost center or revenue generating center for the company? How does your role contribute to the bottom line or core mission of the company? If you do not know the answer to this question, you are the wrong person for the job.

Tip #4 Know your Target Point. This is your goal salary. Keep in mind that you should negotiate for salary first, then negotiate separately for benefits, 401 K matching plans, healthcare, vacation, flex time etc. The target point is your goal salary. Too often, I have clients and job candidates who seem to pull this Target Point out of thin air. You are a product and every product has a specific market price. In good times, the market may bear higher salaries and even over-inflated salaries. In the past few years, this bubble of unrealistic and unsustainable salaries has burst. In fact, you should research what you are worth, what a particular position is worth, what the cost of living is in job location and how many others are willing to take this job for less pay. A target point is not a fantasy number. More salary etc is always good, but you do not want to overbid and bid yourself out of the game due to excessive demands.

Tip #5 Opening Offers. Only the employer can make an opening offer, not the candidate. If they ask you early on in the interview process, try to stall. Say that you would like a salary commensurate with your skills and experience and within the industry average for job X. Let the employer suggest an opening offer and salary range. Note: you cannot give a counter offer unless you know exactly what the job entails, all of the terms and conditions, the scope of responsibilities, the reporting structure, direct reports , expectations about ‘overtime’ and hours of weekly employment. Is it really a 40 hour a week job, or is this theoretical? Is the job actually more like a 50 or 60 hour a week job? How much travel is involved?

Research, what a competitive salary range would be, for a given job and research your competition. Also, carefully evaluate yourself against the competition: are you less experienced, average, more experienced? Conduct a SWOT analysis to determine your Strengths, Weakness, Opportunities and Threats from the competition.Use a SWOT analysis, to analyse your competitive advantage

Be realistic about your desirability and salary expectations. 20-40% is not a realistic jump, when you change jobs. Why would an employer pay you so much more, unless you have gained substantive experience or education since leaving your last job? In a good economy, an increase of 4-7% is standard each time you change jobs. However, in this economy just retaining your previous salary is a success, anything more than your old salary is a miracle.

Consider all of your options when negotiating a job offer. Everyone should request an employment letter. This even applies to people who live in “at will employment states,’ where there isn't a legal employment contract between employers and employees. Get your job offer, terms and conditions in writing. If they promise things at a meeting but won't put it in writing, then these are not real promises.

Happy negotiating…


© 2010 - All Rights Reserved - Sharon B. Cohen, MA, Counseling Psychology, CPRP. Licensed Counselor. Career Counselor and Career Transition Specialist. Atlanta, GA. "Helping business professionals, reach their career potential!"

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