Since the dots are way easier to connect looking backwards, let me give you my post-game analysis first. I urge you to keep these five things in mind as you’re making your next move.
- Write it down. As someone who is used to keeping track of multiple things in my head, writing my thoughts down before an important conversation is not something that I do intuitively. Doing this, however, will be of immediate benefit. Remember that this is not your potential employer’s first rodeo. He/she is easily able to discern someone who isn’t serious enough about the conversation to be prepared. Don’t let that be you. Writing the points you want to make down will allow you to deliver them in a calmer, more organized fashion. For women, the bar is arguably higher. Let’s make sure we rise to the occasion.
- Role-play until you’re sick of it! There is paramount value in role-playing the negotiation with a highly trusted mentor. The last thing you want is to be thrown off by an answer you didn’t expect. And chances are that after role-playing potential answers six times, you won’t be! Make sure that you do this with someone who has the experience to anticipate the different turns that negotiations can take and who will be honest enough to tell you when you suck. You can’t act on feedback you don’t have.
- Unless you’re making a DRASTIC industry jump, you should always aim for higher compensation when moving jobs. Don’t sell yourself short. Remember that there is inherent risk in simply leaving one place and going to a new one. You have spent years building a reputation and relationships in your old position, all of which you will need to work hard to rebuild in your new one. No one works just for fun.
- In the actual negotiation, don’t fall into the trap of tossing out a concrete number. In most negotiations, you will likely be asked a variation of “what salary will you agree to?” Resist the urge to toss out a number. You should definitely ball-park the number that will make you pull the trigger in your head. Sharing it, however, can only result in one of two things: you ending up with a salary that is lower than what you could’ve had (because if the number is lower than what the employer intended, they will be happy to go with it) or a turned off employer who says no to your number. Instead, you can give the employer a baseline grounded in your current salary or in projected earnings. Remember that compensation is also not all about salary. Think of it holistically and express this perspective to the employer. The company may be more comfortable with a scenario in which you forego a bit of salary but have more time off or have your cell phone bill paid for. This may also work better for you in the long run.
- Don’t “over-negotiate.” Play your cards right and know when to stop. Continuing to badger with questions and requests may send the message that you’re not adequately in line with the mission of the company. Put yourself on the other side of that conversation. If the deal-breaker for you is an extra 3K a year, then how convinced would you be that you’ve recruited the best fit for your company? This is a fine line. One suggestion if you do decide to push the envelope may be the use of honesty. Saying something like, “I haven’t had to negotiate my salary before but am wondering if you could increase the base salary XYZ amount. Out of respect for you and the company, I want to be fully transparent.”
This, my friends, is the story behind it.
Finding the opportunity
I started looking for different opportunities three years into my work at the i-bank. A good friend was working at the start-up that I now call home and forwarded my resume. I interviewed for the start-up at the beginning of October, a series of phone and in-person conversations that went really well. But I didn’t hear anything back from them.
Scoping the opportunity
Fast forward to the last week of December, also the week that I got promoted to Associate at the i-bank. I get an email from the start-up conveying that they really like me and apologizing for the hold up. They wanted to hold another set of interviews ASAP. The second interview felt flawless again. The CEO and I hit it off. I sensed that we were made of the same nerdy cloth and that he appreciated my intellectual curiosity. He had his MBA and was a partner at McKinsey before he and the two other co-founders scribbled the beginnings of the start-up on a napkin. The interview with the woman who is now my boss was also smooth sailing. The two of us spoke quickly and used our hands a lot. We understood each other on a visceral level because we were both “superwomen” (for lack of a better word) who weren’t afraid to roll up our sleeves and do whatever it took to get the job done. That her husband, like me, was born in the former Soviet Union also made for great small talk.
Getting the offer
I received an offer in two days, a dramatically faster turnaround from my first set of interviews. I felt that the offer low-balled my skill set and earning power in the context of my recent promotion. The role also felt too customer service centric and inadequately strategic for my taste. I knew that I had to take both up with the head honcho. My mentor advised that I tackle my job description before talking cash. The CEO was a thoughtful guy that needed his thoughtfulness matched.
Preparing for the talks
I had NO idea how I was going to get on the phone with the CEO of a company and tell him that while I really liked company’s business, I didn’t like the offer. In an effort to prepare for this conversation, my mentor advised that I do two things: 1. write it down; 2. role-play.
Having the job responsibilities talk
The next day, I shared my well-practiced hesitations regarding the role, colored by my hesitation to leave an i-bank with a well-established brand. He assured me that the company was small enough for me to gain exposure to areas I was interested in – particularly, developing performance metrics for our investors, raising capital, and developing company strategy. He said his biggest regret was not leaving corporate America sooner. He also put me in touch with one of the company’s investors, who explained the importance of operating experience in evaluating opportunities as a venture capitalist.
Blowing the money conversation
Again, I committed my thoughts to paper. I listed the different components of my compensation: salary, benefits, equity, vacation time, any equipment for work, compensation for phone time, travel rewards, etc. I had a level of expected compensation but didn’t voice it to the CEO even though he blatantly asked. I role-played this technique with my mentor. I conveyed my projected earnings at the i-bank in order to anchor the discussion but felt that I should be earning more as compensation for the risk of leaving a stable company and because I believed that my work product warranted it.
The CEO came back with an offer that included equity, a sign-on bonus, and a salary that I knew I would take no matter what. High on my newly found ability to negotiate compensation, I wrongfully perceived that I could move the needle further; in hindsight, this was a mistake that almost cost me a great opportunity. I asked for a higher base salary, in response to which the company’s HR rep rescinded my offer.
Rectifying the situation
I set up a call with the CEO to rectify the situation. I expressed how intent I was on coming to work for his company and sought to understand what compelled the company to rescind the offer. I believe he appreciated my chutzpah and provided some feedback. In the company’s eyes, I “over-negotiated.” By continuing to press for a higher salary, I gave off the impression that I was more interested in the money than in the company’s vision and impact. He ended the call by telling me to call him if I still wanted the job the next morning. I called him and the rest is history.
In conclusion, pushing for an offer that matched my value and exceeded my earning power had I stayed at the i bank was a good move. Not knowing when to stop was something that I had to learn the hard way.
Doug’s Guide: http://www.dougsguides.com/firstsalary