Negotiating the offer

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This is an IE Business School Course for MBA students about how to negotiate the offer with a future employer.

This course contains the many aspects of a well prepared negotiation strategy, the different elements of a compensation package, based on my experience over twenty years in executive search, with Russell Reynolds and Seeliger&Conde.

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Negotiating the offer

  1. 1. Nego%a%ng  the  Offer  Nego%a%on  Skills  ●  Gerardo  Seeliger    Madrid  2011  
  2. 2. Today’s AgendaNego%a%on  Skills  ●  Gerardo  Seeliger    Madrid  2011  
  3. 3. Negotiating the Job Offer 1.   Your final compensation is not what you deserve, its what you negotiateNego%a%on  Skills  ●  Gerardo  Seeliger    Madrid  2011  
  4. 4. An Introduction to NegotiationNego%a%on  Skills  ●  Gerardo  Seeliger    Madrid  2011  
  5. 5. Assumptions•  You understand that Negotiating is an Art, not a Science•  You did formidable interviews•  You know how to “sell” yourself, your strengths and potential•  You have a target list of companies / industries already in place which you use to guide you in networking and pursuing opportunities,•  You are outstanding in your area or have great potential –thus you have the “right” to negotiate•  You realize the that every business related meeting, networking opportunity and presentation should be considered “an interview” Nego%a%on  Skills  ●  Gerardo  Seeliger     Madrid  2011  
  6. 6. Always Keep in Mind Know yourself Knowledge is power. Choose your battles wisely.Nego%a%on  Skills  ●  Gerardo  Seeliger    Madrid  2011  
  7. 7. Elements of Compensation•  Salary•  Bonuses - signing, minimum, •  Professional development, training benchmark performance, KPIs •  Career Path, Advancement•  Relocation allowance •  New skills-job content•  Stock options - retention •  New contacts, clients•  Health Benefits •  Reporting Relationships,•  Clubs, T&E Responsibility & location•  Pension •  Visibility, network •  Workplace Flex•  Car, Parking, Vacation •  Security-Safety•  Family, day care, schools •  Work from home•  Severance, contract, expatriate. •  Promotions•  Title •  Expatriate package•  Cell phone & laptop •  Career planning •  Expense account•  Profit sharing •  Vacation•  Club memberships •  Paid home trips•  Lifestyle aspects •  FlexibilityNego%a%on  Skills  ●  Gerardo  Seeliger    Madrid  2011  
  8. 8. Your Ideal Work EnvironmentNego%a%on  Skills  ●  Gerardo  Seeliger    Madrid  2011  
  9. 9. What to Do and What to Avoid•  Do your research •  Avoid bringing up salary before the employer does•  Do thank the employer. Take 1-3 days •  Avoid inflating your to consider all factors earnings just to get a higher salary offer. Don’t•  Do take the time to consider the lie! ENTIRE compensation package •  Avoid feeling obligated accept the first salary offer•  Do get the offer in writing – negotiate!•  Do show confidence and determination Nego%a%on  Skills  ●  Gerardo  Seeliger     Madrid  2011  
  10. 10. Do Your ResearchProper preparation, get all the facts•  Create list of benefits you bring to the employer Build knowledge through your professional network – MBA colleagues, headhunters, alumni, search firms, friends, former employees, linkedIn•  Published company documents•  Company budget•  Online Salary surveys•  Results of your previous interviews, feedback•  Economic and industry climate•  Hiring manager priorities•  Urgency to fill position•  Time position has been open•  Final Decision makerNego%a%on  Skills  ●  Gerardo  Seeliger    Madrid  2011  
  11. 11. Do Your Research•  Research your negotiation power•  Weigh the offer and see the big picture•  Understand the elements of compensation•  Decide on your priorities•  Try to identify a mentorNego%a%on  Skills  ●  Gerardo  Seeliger    Madrid  2011  
  12. 12. Know the Answers BeforeNegotiating•  Are they expecting me to negotiate?•  How did they arrived at this offer? Was there a range?•  Would the package look different pre crisis? Are they willing to review the total terms when the economy picks up again?•  What is the highest offer made for this position?•  Do I have a specific skill for this job that’s unique thus allowing me to negotiate harder?•  Who is the decision maker, hiring manager, HR or other?•  Who would need to get involved for you to negotiate outside of the parameters they have set?•  How long has this position been open, difficulties in filling it?•  How have they been finding candidates for this position?•  Were others in this job promoted or why did they leave the company?•  What were their backgrounds?•  What is the value of this role to the department, to the company?Nego%a%on  Skills  ●  Gerardo  Seeliger    Madrid  2011  
  13. 13. 10 Things to Remember Duringthe Negotiation Process 1.  Try to have alternative job offers 2.  Be accessible 3.  Be flexible 4.  Be honest 5.  Back-up and substantiate 6.  Focus on total rewards 7.  Get it in writing 8.  Focusing on your priorities 9.  Come well prepared, do your research 10.  Be realistic with your market worthNego%a%on  Skills  ●  Gerardo  Seeliger    Madrid  2011  
  14. 14. Tips for an Effective Negotiation•  Be persuasive •  Anticipate the company’s•  Negotiate face-to-face response and objections•  Be clear when stating your •  Be firm interests and requests •  Negotiate a Win-Win•  Create numerous options scenarioNego%a%on  Skills  ●  Gerardo  Seeliger    Madrid  2011  
  15. 15. Create a “Wish List”1.  Increase base salary by 10%2.  Signing bonus of 5,000 Euros3.  Relocation allowance or one time bonus of 10,000 Euros4.  One trip home for me and spouse paid for by the company5.  Car allowance of ____ Euros a month6.  A Review in 6 months based on results from the first 120 days7.  Two executive workshops or leadership learning courses each year paid by employer8.  Subsidize current or continuing educational expenses9.  Start date 6 weeks after graduationAlways have more points on your “wish list” than you know you will get. It must be agive and take on negotiating points in order for both parties to feel good about theprocess.Nego%a%on  Skills  ●  Gerardo  Seeliger    Madrid  2011  
  16. 16. Give + Take = Win / Win                                        IF  I  GET  THIS                                  THEN                                      I’ll  GIVE  IN  ON  THIS     IF  I  GET  THIS                          THEN                                I’ll  GIVE  IN  ON  THIS    Nego%a%on  Skills  ●  Gerardo  Seeliger    Madrid  2011  
  17. 17. Things to Consider during aNegotiationNego%a%on  Skills  ●  Gerardo  Seeliger    Madrid  2011  
  18. 18. Negotiation ToolsAttentive listening, Verify, Clarify and Confirm•  Paraphrase what is heard to gain clarity, confirm feelings are understood, dig deeperEmpathy•  Understanding what’s not being said, sharing and identifying concerns, working around barriers, creating opportunitiesThe Power of Questions - Inquire and summarize•  Ask for more information, ability to direct the speaker and access more information•  Be open to other options, possibilities - Listen with a goal in mind. Pause and reflect.•  Have a contingency plan if demands are not metNego%a%on  Skills  ●  Gerardo  Seeliger    Madrid  2011  
  19. 19. Listening Skills are Key toSuccessful NegotiatingNego%a%on  Skills  ●  Gerardo  Seeliger    Madrid  2011  
  20. 20. Listening Skills are Key toSuccessful NegotiatingNego%a%on  Skills  ●  Gerardo  Seeliger    Madrid  2011  
  21. 21. Some Tough Questions toPractice•  What did you make in your last job?•  What would it take to bring you on board?•  We think we can attract MBAs for 50,000 this year. Would that number get you excited to come to work with us?•  What do you need to make?•  What are your salary expectations now that you’ve completed your Masters Degree?•  What is the minimum amount you can afford to make?•  If we were to give you an offer today, would you accept it? Nego%a%on  Skills  ●  Gerardo  Seeliger     Madrid  2011  
  22. 22. Some Sample Answers•  “It’s always important for me to determine that I’m a great fit for a job before discussing salary.”•  “Salary is not my first concern. I’m really more interested in the opportunity and the people I’ll be working with. Can we come back to this later?”•  “That’s really way below what I believe I can make elsewhere. It’s a pity, because I really like your organization. Would you like me to make some recommendations of other students from my class who might be interested? And please keep me in mind for any position that might pay more.”Nego%a%on  Skills  ●  Gerardo  Seeliger    Madrid  2011  
  23. 23. More Sample Answers•  I’m sure you have a range that you’re working with, but I really think it is premature to get into details before you’re sure you want my services, and before I’m sure it’s a good match between my skills and interests your co. has to offer. When you’re ready to make an offer, I’ll be eager to discuss the details, but until then I’d rather concentrate on the job responsibilities, performance and that sort of thing.”•  “I hope this means that you’ve decided I am right for the job since you want to discuss my salary expectations?”•  I think I’ll be able to do A, B, & C (KPI) for you in the first year which I believe warrants a better offer that this.”•  “I like to focus on the opportunity and responsibilities first and foremost and at the same time my goal is to earn between 45,000 and 55,000.”Nego%a%on  Skills  ●  Gerardo  Seeliger    Madrid  2011  
  24. 24. Negotiation Tips•  Always stay calm, express enthusiasm for the opportunity first and then review salary constraints. Have calculator, wish list, pen and notes in front of you•  Don’t respond too quickly, don’t be afraid of silence, repeat the offer and pause to think …Silence can be golden•  Suggest added responsibilities for the position in order to get to higher salary structure, etc. Justify with logic, facts and research•  Use percentage increase and always counter a bit above where you ultimately want to be, don’t focus on hard numbers•  Know possible tax benefits of different reimbursements for yourself and for the company – tax vehicles•  Set up all areas that you want to negotiate at the beginning of the conversation. Prepare 2-3 acceptable alternatives•  Know the ultimate decision maker – work with your ally if possible•  Practice with classmates– rehearse for the actual negotiation•  Do not personalize, avoid using “you”, preserve the relationship Nego%a%on  Skills  ●  Gerardo  Seeliger     Madrid  2011  
  25. 25. The Negotiation•  Focus on Win-Win conversation “I really had in mind more than that. What can we do?”•  Keep the communication open and fluid•  Ask open-ended questions to get more insight and potential solutions “In what ways could we reevaluate the base compensation part of the offer?” instead of “I would like to reevaluate the base compensation or I need to make 10,000 more in base salary.”•  Do not put yourself and the employer on opposite end of spectrum – both of you should be together looking at ways to address the issue, win-win•  Create possibilities and options•  Accept that it’s a continuous process of discovery and a process of give and take•  Negotiate special terms last – start date, vacation, leave time, etc.•  Check your body language, emotions and ego at all times – refer to your priority spectrum during the process Nego%a%on  Skills  ●  Gerardo  Seeliger     Madrid  2011  
  26. 26. The Final Offer•  Reflect (2-3 days) before you give a response•  Monitor and capture your first reaction to the offer•  Note what you like about the offer and the company•  Evaluate the CAREER opportunity – The total package!•  Identify all points of concern and address them at the same time•  Try to discuss with future boss and mentor first•  Know roadblocks and market demands and economic circumstances•  Know the ranges for the job and what it takes to get to high pointNego%a%on  Skills  ●  Gerardo  Seeliger    Madrid  2011  
  27. 27. A Closing the Offer•  “Based on my research on the market conditions, I really feel that my experience and the value I can bring to your group warrants a starting salary in the high 70s but if you could bring the base salary up to 45,000 I’m sure I can make the difference up in my performance bonus.”•  “I’m thrilled to receive an offer from you and although money is not the only factor, it is important. I had intended to accept a salary a bit higher than you propose. Considering my experience and how I can immediately contribute, I’d like to talk about where you have flexibility and if added responsibilities might allow an increase in the salary by 10%? If it is possible I would be willing to accept on the spot since this is my first choice.”•  “Thank you for the offer. Several aspects of the offer are appealing. However, in the area of vacation, my homework among colleagues at this level, a few recruiters and professional society journals indicate that three weeks is more the norm. Can we discuss ways to adjust this part of the package.”Nego%a%on  Skills  ●  Gerardo  Seeliger    Madrid  2011  
  28. 28. B When You Decline the Offer•  Decline gracefully – the business community is small•  Be appreciative and grateful for the experience, hard work, time and interest invested in you. Your paths will cross again•  Ask for immediate feedback and advice as you move forward•  Ask for those you met to refer you to 1 or 2 contacts relevant to your background if the feedback is positive•  Network with all of those whom you met….send thank you notes•  Create opportunity…ask for name of successful candidate and congratulate and get referrals from him/her since he’s been interviewing for similar jobs•  Someone’s dream job is someone else’s nightmare job Nego%a%on  Skills  ●  Gerardo  Seeliger     Madrid  2011  
  29. 29. C After Accepting an Offer•  Contact all your interviewers by email or phone to let them know of your transition (be prepared if other opportunities suddenly arise)•  Send thank you notes with new job information to all of your contacts and continue to be a resource for others•  Update your resume immediately and send it out•  Congratulations, celebrate and enjoy life! Nego%a%on  Skills  ●  Gerardo  Seeliger     Madrid  2011  
  30. 30. PRACTICE, PRACTICE,PRACTICE!Nego%a%on  Skills  ●  Gerardo  Seeliger    Madrid  2011  
  31. 31. GOOD LUCK IN YOUR NEGOTIATION!Nego%a%on  Skills  ●  Gerardo  Seeliger    Madrid  2011  

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