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Wharton Executive MBA

Salary Negotiation

Peter Jacobs Global Career Coaching

www.gccoach.com

Opening Question (Use Chat)

What keeps people from negotiating in their own best interest?

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Effective Negotiation Requires

• A conducive mindset

• Appropriate timing

• Knowing what you want

• Gathering information

• Communicating clearly and specifically

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Conducive Mindset

• Win-win – mutually acceptable solutions

• Partnering with the employer/hiring manager

• Going into discussion fully prepared

• Confident in assessment of market value of “service” or position

• Knowing (and being “at peace” with) your next best alternative to a negotiated agreement (BATNA)

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Agenda

Negotiation Timing

Managing & Evaluating Offers

Sources for Finding Relevant Data

Negotiation Strategy & Managing Expectations

Avoiding Pitfalls

Accepting & Declining Offers

Salary Increases

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Timing - When to begin the discussion?

A. Up front?

B. During the first interview?

C. During final interviews?

D. After you receive the offer?

E. After you’ve accepted the job?

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When to Negotiate

Your Negotiating

Position

Time

Too Early

Best Time

Too Late

*who are you?

*offer accepted* *want you

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Delaying Salary Talk - Ideas

• “It isn’t about the money If this is the right job for me and I’m the right person for the job, I’m sure we’ll be able to work out the details.”

• “I’m sure we can come to a fair salary arrangement if I’m the right person for the job.”

• “I am much more interested in doing (type of work) here at (name of company) than I am in the size of the initial offer.”

• “I’m open to any reasonable salary offer. Can you tell me the range for the position?”

• Others?

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Offer Management

• Thank them for the offer—be gracious

• Convey enthusiasm about the position, even if the offer is disappointing

• Do not accept on the spot, unless the offer is perfect

• Clarify as many details as possible; request a written offer if not provided

• If you have questions about the offer, arrange for an in person meeting or phone call to discuss the offer

• Request time to review; confirm offer deadline

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Question #1: Do I want this job?

• Skills you want to use & develop

o Managing a team, financial modeling, leadership

• Work environment issues

o Location, hours, size of firm

o Fit with organizational culture

• Personal goals and values

o Short-term: achievement, rewards, compensation, recognition

o Long-term: career advancement; positioning for future opportunities (internal and external)

o Access to leadership/mentors

o Lifestyle

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Evaluating the offer

If the answer to “Do I want this job?” is yes:

• Gather Information - Get Prepared

• Know your BATNA

• Practice

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There are three primary categories of information you will need:

1) Personal Salary and “Desirability” Information

2) Current Market Compensation Information

3) Company/Position/Hiring Manager Information

Gathering Information

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The salary and other compensation elements you consider to be

a. Ideal

b. Satisfactory

c. “No-go”

Based on:

• The compensation the market will bear for the job in question (e.g., the value you will be expected to deliver)

• Your accomplishments relative to the position

• Wants and Needs

Personal Salary and “Desirability Information”

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Possible Offer Components

•Salary

•Signing bonus

•Performance bonus

•Stock grant or options

•Deferred comp.

•Educational reimbursement

•Early review

•Relocation or Corporate Housing

•Scope of responsibilties

•Training/Learning opportunities

•Title

•Start Date

•Insurance (med, dental, disability)

•Health Savings

•401k match

•Flex hours

•Transportation

•Travel benefits

•Vacation/PTO

•Childcare

•Paternity/maternity leave

•Car / phone / technology

•Work remotely

•Private Office

•Other perks

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How employers decide salary/compensation levels

• Average pay at other companies in industry

• Average pay for professionals with your level of experience/education

• Average pay for professionals in your field in your geographic area.

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Current Market Compensation Information

Research salaries and total compensation to determine a range:

• On-line resources: Salary.com, Payscale.com, Glassdoor.com; Indeed.com, SimplyHired.com

• Professional/Trade Association surveys

• Wharton alumni, peers, and others in comparable jobs (to validate ranges)

• Recruiters specializing in your niche

• CMS Resources

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CMS Salary Resources

• CMS Website: https://web.wharton.upenn.edu/mbaexeccms/index.cfm

Lippincott

Wharton MBA Career Report – under Workshops & Presentations link at the bottom or online at http://mbacareers.wharton.upenn.edu/statistics/full-time.cfm

Vault

Wetfeet Insider Guides

• Speak to your Career Management Director

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Other MBA Program Data

• Harvard - http://www.hbs.edu/recruiting/mba/data-and-statistics/

• Stanford - http://www.gsb.stanford.edu/cmc/reports

• Columbia - http://www7.gsb.columbia.edu/recruiters/employmentreport

• Kellogg - http://www.kellogg.northwestern.edu/career_employer/Employment_Statistics.aspx

• UC Berkeley – Haas - http://www.haas.berkeley.edu/groups/careercenter/hireanmba/employment-reports.html

• Michigan - http://www.bus.umich.edu/EmploymentData/EmploymentOverview.htm

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Calculating Market Value

• ORV$ - “Objectively Researched Value from current published data,” “Going Rate,” avg earning range

• IV$ - “Extra Individual Value” - subjective assessment of track record as applies to new job or promotion and relative to other candidates – “where in the salary grade or ‘range’ you fall”

• Rf$ - Risk-factor Dollars - Compensation you are willing to make contingent on performance (bonuses, commissions, stock options)

Market Value = ORV$ + IV$ + Rf$

From Chapman, Jack, Negotiating Your Salary: How to Make $1000 a Minute

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Company & Position-Specific Information

• Urgency of company’s need to fill the position

• Who is the decision-maker

• Staffing Budget

• Job-Grade, if there’s a structured salary grid – which elements of compensation & benefits are “standardized?”

• What is and isn’t negotiable?

• BATNA – yours and the employer’s

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The Negotiation

• “Negotiation is a must” is a myth

Don’t negotiate unless you are willing to accept an amended offer or are prepared to walk away; don’t bait and switch; be careful about changing the rules

• Ask questions – probe rationale/interests behind position

• Articulate your value proposition; what’s in it for them?

• Use Data – bring copies

• Be creative - look for ways beyond salary to “make the pie bigger” - to boost your income or gain intrinsic value.

• Look for tradeoffs that are of low importance to one party and of high importance to the other.

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Negotiation – Food for Thought

• Be careful about leveraging one offer against another—be honest about multiple offers if asked

• Remember you have the most leverage when they believe you will accept and they can create a win-win

• Negotiate with decision makers face-to-face if possible—watch out for too many details in an email or voicemail

• Pay attention to reactions and nuances; be respectful; consider other perspectives

• Communicate confidently but not cavalierly

• Once you begin negotiating there is no turning back

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Signs of Leverage

• Hiring manager speaks as if you were already part of the company

• You and the hiring manager are already in “problem-solving mode”

• You have established strong rapport with the hiring manager

• Others?

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Managing Expectations

• Work in partnership with the employer to come to a “win-win”

• Recognize that the more invested both parties become in the process, the more committed you’ll both be to an offer and acceptance

• Proceed with interest and enthusiasm at all times, but conduct your due diligence—ask provocative questions

• Re-evaluate and re-assess your priorities at each stage of the negotiation process

• Summarize updated offer with offering authority; make sure your understanding and expectations are in sync

• Wrap-up

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Avoiding Pitfalls

• Negotiating too soon - Watch for the pre-close, esp. when working with recruiters

• Not asking questions – or - Asking closed-ended questions - such as, “Is this negotiable?”

• Adopting a rigid mindset; becoming emotional

• Mentioning personal reasons why you need more money

• Proposing arguments not grounded in facts

• Asking for TOO much time

• Attempting to re-negotiate after accepting the offer; accepting an offer and then reneging

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Accepting An Offer

• Try to accept offer in-person or by phone, not over voicemail or email

• If you negotiated a change in your offer, make sure that change is reflected in writing

• Make sure you understand acceptance procedures, timelines, etc.

• Thank all parties involved with the hiring process; express your delight to join them

• Don’t wait until the end of the deadline to accept

• Don’t accept an offer and continue to entertain others

• Stay in touch with your points of contact between the acceptance and start date

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Declining An Offer

• Thank them for the opportunity to interview

• Decline live (no email or voice mail) graciously and professionally—be mindful of long term relationships and your reputation

• Make sure you connect with the hiring manager

• Don’t leave the door open for a counter offer, unless you would sincerely consider it

• Don’t provide detailed information about the offer you’ve accepted; try to focus on irrefutable points (e.g., location, job function, etc.)

• Thank key people involved in the interviewing process—good way to expand network

• Leave the door open for future opportunities

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Negotiating a Raise

• At time of performance review, major change in organization, change in your responsibilities

• Document your results (quantify if possible) – make sure your boss acknowledges them

o Direct impact on quality or quantity of products or services

o Consistent, solid performance

o Situations where you went above and beyond

• Tie raise to increase in responsibilities, change in deliverables

• Negotiate a raise as you would negotiate salary for a new job

• Share Market Data

• Agree shared future goals

• Take account of company policies, salary grid

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More Resources

Books:

• Negotiating Your Salary, Jack Chapman,

• Getting to Yes, Fischer, Ury, & Patton

• Difficult Conversations, Stone, Patton, & Heen

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Thank you

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