Most of the time when you take a new job it isn’t at a different firm altogether, but a new role within the company you already work at. This can pose some unique challenges. Here’s some career coaching on how to negotiate an offer within a firm you already are employed by.
When you get offered a new role at a company you’ve been at some time, usually there is an opportunity to negotiate a higher salary. Unfortunately, most people will simply accept what they are offered. Here are 4 steps to getting yourself more money:
Step #1 – Be prepared for the standard company B.S.
As any seasoned executive can tell you, most companies have a nasty habit of underpaying people they promote internally relative to those they would have hired externally for the same role. The foolish (but common) thinking goes like this: “Well, John was making $95k per year previously (and he worked like a dog), so if we give him a 5% raise, he should be happy.”
Essentially, the company is betting on the fact that you would rather stay put than leave and face the large transaction cost of getting a job somewhere else (finding a job and then rebuilding relationships, proving the quality of your work, changing your commute, etc).
The belief is that you will just accept the 5% increase (or whatever nominal amount). If you push back and ask for more, you will likely hear one of the following stories:
- “These are tough financial times for the company so we can’t…”
- “Human Resources has capped increases for existing staff at X%…”
- “This is a stretch assignment for you, and this is the low part of the range for the role, over time you might grow into more pay…”
Step #2 – Know your BATNA
Negotiation pros (and a few career coaches) love to talk about BATNA, which stands for your Best Alternative to Negotiated Agreement. Here’s the deal: you absolutely have to know what alternative to taking the offer you have. In most cases you have two:
- Staying in the role you have now (and potentially losing/gaining some social standing for rejecting another offer)
- Look for another position at a the same firm or a different one (where you may get paid more or less and have to rebuild your status, network, etc)
The key is knowing whether you have to take the new offer at any price, or if there is a dollar value at which it is worth your while to stay put (and/or look for another job). Settle on this in advance of the negotiation!
Step #3 – No matter what you are offered, ask for more.
It is altogether too easy to simply accept what you are offered. Don’t do it. At the very least make the hiring manager squirm a bit.
If you’ve done your homework, you should know what that role should be paying. Make the hiring manager justify to you why you aren’t getting paid that amount. The idea is to ask for the maximum amount that you can comfortably justify to yourself.
Remember, the hiring manager has chosen you for a host of reasons that are all about his needs.
You want to lay out an argument structured roughly like this:
- I am very eager and excited about this role and what I can do in it…
- I know this role is very important to you and the firm, and that you have been very thoughtful in hiring the best candidate you could find…
- I believe I am worth significantly more than that because…
- How much flexibility is there in the offer?
At this point you will hear either, “We can do a little bit, what did you have in mind” or “Unfortunately, there is no flexibility because… (HR policy, budgets, etc, etc)”
Here are two good responses:
Hiring manager: “We can do a little bit, what did you have in mind?”
You: “I did some research talking to peers, looking on glassdoor.com, etc and really evaluating the role and I believe I am worth….” [And then say nothing and wait for the response]
Hiring manager: “Unfortunately, there is no flexibility because of…”
You: “I really feel like I am worth more than that. Let me ask you a question: are there other elements of compensation we can work with such as bonus, stock options or vacation time to get me closer to where I expect to be?”
The idea with the second approach is to see if there are things you can trade with the hiring manager that are more within their control. At the very least, pretty much every hiring manager with any experience will give you a few vacation days off the books if they can do nothing else.
Finally, what if you get the following response:
Hiring manager: I literally can’t do anything more with this offer. No more salary, bonus, equity, vacation. This is the best I can do.”
You: “I’m sorry to hear that. Let me ask you this: if I do an exceptional job over the next six months, do you think we can revisit my compensation at that time?”
In that case, your goal as soon as you have accepted the position is to immediately go to work with the hiring manager on objectively defining what an exceptional job is and reminding him of this conversation at least monthly (while you achieve these expectations).
Step #4 – Preserve the relationship by keeping things open
No matter what happens you want to maintain this relationship. If your first inclination is to say no, instead say, “I need to think about it, can I get back to you in a day?”
Be careful not to take the hard stance of, “I need X dollars or else.” It doesn’t help anyone and makes you seem immature. You can also leave things in the manager’s corner by saying, “Perhaps you can take a day or two and see if you can find a way to make this work.”
If it seems that at the end of all this, things aren’t going to work out, remember how to say no. Honor yourself, say no, honor the relationship.
These techniques have earned my clients thousands of extra dollars. Take the time to study them, learn them, and REHEARSE what you are going to say dozens of times so you can say these lines with confidence and poise.
One final thing to remember: the hiring manager has a BATNA too, it is the second place candidate. How much better you are than his best alternative will determine the amount of leverage you have.
Best of luck.
If you need more guidance on your career and how to accelerate your next promotion, schedule a complimentary career coaching conversation with me here.