What is the most money that you have ever made?
Answer this question judiciously. If you have been in sales, for instance, and your earnings have been really high in some years and lower in others, give an average of the last few years. Bragging about making a lot of money will never help in negotiations. If you made an inordinate amount of money several years ago, I would recommend not even mentioning it. Again, the answer to a question like this needs to center around not just what you've earned, but the challenge of the job opportunity itself. Something along the lines of, "There have been a few years in which I've been fortunate enough to be with organizations where bonus earnings were sizable. But I realize that those are very uncommon. I am more interested in the opportunity, the challenge of the job, and the potential. If those things are taken care of, my earnings will reflect my performance."
What do you consider most valuable: a high salary, job recognition, or advancement?
Again, combining earnings with job performance is the most important thing you can do. Something along the lines of, "Well, I have found that the better job I do, the harder I work, recognition, advancement, and, especially, money usually take care of themselves."
What kind of benefits are you expecting?
In the past few years, benefit plans, especially in the insurance arena, have skyrocketed in cost—especially for companies with a hundred people or less. So, there is no such thing as "standard" benefits. It is not uncommon for organizations to have drastically reduced their benefit plans for their employees. The purpose of this question is to find out if there is going to be a great deal of difference between the kind of benefits that you have had before and the kind of benefits that might be offered with this company. Again, you really don't want concerns about benefits to interrupt the interviewing process until you have fully sold yourself. So, an answer something like, "Benefits, like money, to me are as important as the company, the job, and the professional challenge. I will certainly take the benefits package into consideration if an offer is made, but right now those kinds of things shouldn't be an issue."
All You Need to Know About Money Negotiations
Most people make a much bigger deal about salary and compensation negotiations in the final step of getting a job offer. I have always contended, and my candidates over the years agree wholeheartedly, that if you keep a few principles in mind, successful negotiations, when it comes to money, just aren't that hard. Here is what you need to know.
People have all kinds of funny, usually wrong, ideas about compensation. It becomes real important because money is a common denominator, and it is easily equated with success in a job (which really isn't true). Many people say they are primarily motivated by money. If that were true, more people would rob banks or something illegal to get money quickly. The truth is that just about every psychological study about the motivation of money rank it as the fourth or fifth reason people work. It always falls behind job satisfaction, contribution, security, personal growth, and so on.
If you have "managed" the interviewing process correctly, you already have a good idea of what the salary and compensation for the position are. You know how close your idea is to and the hiring authority's idea of what is fair. Money is simply part of the job offer negotiation. There are lots of things that might be negotiated in a job offer. So, before we get to the exact way to address money, let me share them with you:
401K investment and retirement plans
Car, car allowances, insurance, parking fees, other car expenses
Salary review dates
Insurance—health, life, vision, dental—for you and family Disability insurance, both short-term and long-term
Overtime pay Vacation time Sick leave
Educational reimbursement Flextime
Pay for extra personal time off
Health club/country club membership and expenses
"Custom designed" bonus plans
Stock options, stock used as a sign-on bonus
Stock purchase plans
College tuition reimbursement plans
Ability to work from home a designated percentage of time Membership to buying clubs Separation packages Sales territory realignment
There can be all kinds of other benefits that a company might be able to provide. I have seen such things as time off to train for the Olympics, time off to attend executive MBA programs at far away schools, bike race team sponsorship, and hunting lodges.
Make sure you know all of the aspects of a job offer before you start negotiating. The larger the company, most likely the less flexible it can be. But you won't know until you try. Here are some things to remember:
The better you sell yourself in the interviewing process, the more a company likes you and wants to hire you, the more leverage you have in negotiation. If you are a "nice to have" instead of a "can't live without" candidate, you may not do as well in negotiating. Make yourself indispensable!
When it comes to money, always try to negotiate with the hiring authority—the one with "pain" to hire someone. You don't have as much leverage with a removed third party, like H.R. An H.R. department isn't as interested in alleviating the "pain" of a hiring authority as it is in keeping with the salary guidelines that make the department look good. So, if the H.R. department starts talking to you about money, insist on talking to the hiring authority.
Don't assume that you are going to have a hassle over the negotiations. If you approach the negotiation as though it is just part of the other conversations, you are much more likely to do well.
Remember, the first rule of negotiation is to never be afraid to walk away! Now this might be harder to do if this is the only offer you have received in six months. And don't lead with an aggressive attitude. Simply know that you can walk away any time.
Make sure you know everything about the job before you negotiate. It is not uncommon for a candidate to be so intent on getting an offer that he or she misses a number of important parts about the job. So, when you go in to negotiate, if you don't already have a crystal clear understanding of the job, get one!
Approach the negotiation with a "we are all in this together" attitude. You have to say, in the beginning of the conversation, "Mr. or Ms. Hiring Authority, I really want this job and I want to work for you. I would like to see if we can work the money out together." This removes the employer's fear that you will reject him or her. Studies have shown that this kind of "Let's all win together" attitude is the best negotiating statement a person can make.
Contrary to what most people think, most employers are not interested in "paying as little as possible." Most know that we all get what we pay for. The employer needs a good employee more than he or she needs the money.
Make sure you hear all aspects of the offer before you start negotiating. Write this down so you can see them in front of you.
Don't negotiate over the phone or by e-mail unless you absolutely have to. Face to face is always best.
Once you have done all of these things, repeat back to the hiring authority what you understand. Then take each item you think you would like to discuss and talk about it with him or her. As you go through each item, it doesn't hurt to ask, "Is that the best you can do?" Now, some things like life insurance or health insurance benefits are cast in stone. They can't be changed for each individual in the company. However, things like base salary, salary reviews, etc., may be greatly variable. I recently instructed a young candidate who was changing jobs for the first time to automatically ask this question when he got a verbal offer. He was making $65,000 and was offered $68,000. The young fellow simply asked, "Is that the best you can do?" The hiring authority told him that he would call him back in an hour. The hiring authority called back and offered $71,000 with a $2,000 signing bonus. The candidate was elated. He got a $5,000 raise before he even started simply because he asked.
Even if you ask this question and discuss each money item in an offer, you may not get any more money. The offer might be the same when you sat down to discuss it. Don't worry about that. It still may be a good offer. But, at least you will be respected for trying.
Remember that in the coming economy your job with any one firm is likely to last only 2.5 to 3 years. You may, for a number of reasons, be willing to take a little less than what you think you or the job might be worth in order to gain experience that you can leverage in the next job.
How This Affects You
Be aware of every aspect of an offer, especially the monetary part. Give good answers and ask good questions. Treat "money" with grace and ease, like any other part of the interviewing process.
Practice, practice, practice. Go through a number of role-playing sessions and mock negotiation situations with your spouse, friend, or coach. This kind of thing does not come naturally to most people. Get use to having to do it: Every three years or so is more often than you expected!