Gary Burnison is CEO of Korn Ferry and author of Lose the Resume, Land the Job, from which this is adapted. For more information, see KFAdvance.com.
The weeks have come and gone. So have the months. Just when you’ve almost forgotten the name of the company, the e-mail comes through from the HR office: “Can you give us a ring?” Hours, days or even weeks later, you finally get the job offer. Your heart’s probably pumping and the adrenaline is flowing, and you’re thinking you’re near the end. But in fact, the work has just begun.
A true offer in hand is one that comes with a term sheet or e-mail explaining the particulars. And this is where most people mess up, failing to continue to do the homework that got them there in the first place. Salary, of course, is a key thing – as is asking for the overall employment offer – but there are many particulars of the journey:
Understand the Leverage You Have Before You Start. The company wants you and may very well be open to negotiating at least some elements of your compensation and employment terms and conditions – maybe more money, more vacation time or the ability to work from home. With senior positions, much more is negotiable, including sign-on bonuses (customary for positions paying low six figures and up), additional nonmonetary benefits and other incentives being left behind at the soon-to-be-former employer. More junior positions could have leverage with pay and flexible work arrangements, but it’s important to not try to change your work arrangement after you’ve started working. Negotiate up front to find out what’s possible and acceptable to you and your employer. You will never have as much leverage as you do when the company makes the offer and wants you to join!
Know the Value of the Job. Research the market in which you are interviewing, as well as any premiums or bonuses that are applicable for someone at your level and experience. One of my colleagues gave the example of her daughter, an engineer and an Ivy League graduate who was negotiating an offer with an employer in Boston. The competitive regional job market and the young woman’s pedigree resulted in a starting salary and bonus that were 30% higher than the original offer.
Understand the Company’s Compensation Philosophy. For a mid-level or senior position, a company may decide to pay a competitive salary – known as paying “at the median.” Or a company may offer a lower salary – for example, at the 25th percentile of the range of comparable salaries – and then offer more performance-based incentives. Conversely, the firm may decide it needs to “pay up” for talent, particularly to recruit experienced external talent, and pay at the 75th percentile or higher. Whatever the pay package, companies generally have a talent strategy that explains their compensation. The more you can find out about the company’s compensation structure, the better for your negotiation.
Negotiate with a Value Mindset. Focus on the value you bring to helping the team, department, and/or company achieve its goals. The value mindset can keep you from coming off as arrogant or greedy, and it will prevent you from underselling yourself.
Be Aware of Non-Compete Agreements. Hopefully, you know about any limitations before you get this far into the process. But people sometimes discover that years ago they signed a non-compete agreement with their current employer that prohibits them from taking a position with a competitor. If this becomes an issue, you will probably need the services of an employment lawyer. And if your new employer wants you to sign a non-compete, make sure you understand the terms and implications.