Tag Archives: negotiating

You have to prove you are worth more than you are being paid

“I am earning $115,000 per year. But I don’t want to be a food scientist anymore. I want to be a Java programmer. I’d like to earn about the same salary, but I’d consider less. Maybe $80,000 per year. I also want to move to Pennsylvania. I don’t like Texas. I almost got a PhD degree so I am sure someone will want me. Can you find me a job?”

This image has an empty alt attribute; its file name is vzZmKckcoj_eidQS9_xsdcG713VbYAaNiildV0rjcVKH7BmR9VMbpinqwFiddEJ1pJ2zMNGgWOorxGWm3brBV-9HlDR4BiqRgtKw_2aSLoMHYpIzaOYm_hNlpGGwc3Oa5wqzEZSP

At that time Java programmers with 2 years experience were earning $60,000 per year. They had no Java experience. They were studying it. Their goal was to get certified and then move to their new career. Their degree was unrelated to programming. Dropping from $115,000 per year to $80,000 per year seemed to them to be a sure way to interest an employer. I had to let them know that they weren’t worth anywhere near that as a programmer. 

Their problem was that they wanted to be hired at top dollar before they had a track record. And, yes, he did get hired. Just not at those terms. They realized the reality of the situation.

No employer can stay in business when they overpaid their employees. If their expenses are high, they have to charge more. Then their competitors take all their customers away. No customers, no business, no jobs. 

In order to be hired you have to be the best bargain of all the people who apply. You need to have proof that you will do more excellent work for less money than anyone else. That doesn’t mean you have to be the lowest paid. You have to be the best bargain.

A great salesperson will be paid three times what a mediocre one is. Yet, everyone wants a great salesperson and will pay for them. You may pay them three times as much, but they bring in 10 times the profit. That’s because high volume cuts your overhead costs. Great salesmen are worth a lot more. Did you notice the ugly fact that great salesmen are worth 10 times more, but are only paid 3 times more?

What about network technicians? If you can improve computer response time by ½ second per entry by 1000 clerks, you can save $100,000 per year for your company. If you can keep the computers of 1000 clerks from going down for 10 minutes each week, you are saving the company 166 man hours per week. That will allow them to save the wages of 4 clerks. A great network technician is worth much more than the one who allows network problems to continue. The ugly fact is that a great network technician is only paid 2 or 3 times what a barely acceptable one is paid, yet his contribution is 10 times greater.

You need to document what makes you great. Present it to your boss when you do it. When you are looking for a job, put dollars produced and saved in your resume. If you prove you are worth more than you are being paid, there will be less resistance to paying you more. Prove you are worth ten times more, then accept wages two or three times higher. It’s ugly, but that’s the way it works. 

Something To Do Today

Think about what work you have done over the last week or two. What are a few things that can make you worth 10 times more?

$250,000 too proud

bus wreck

Over negotiating can be a wreck. Watch out.

How hard do you negotiate? If you are critical to a project’s success, shouldn’t you be really well paid? The job market is hot.  A lot of employers are not finding the right person.

Here’s an example I was part of:

Mike’s expertise selling into FEMA was critical.  Their product was more than an idea, but not a proven solution.  Mike was already calling on FEMA contacts even though he wasn’t officially on payroll.  The feds wanted their product.  This would be a big win for everyone.

Mike had been unemployed for 8 months and was running out of money.  This was juicy.  If Mike quit or was fired the day after he started, he’d still get $250,000.  The commissions would double that. Still, he was worried he wouldn’t get everything he deserved.  The contract wasn’t tight enough.  What about bonuses in year 4?  He brought in the best lawyer he could find.  The company balked at his demands, his lack of flexibility.

Then the lawyers and the dragging negotiations wounded Mike’s pride.  A venture capitalist said the wrong thing.  The CEO didn’t want to completely get rid of the non-compete agreement since there was a one year severance guarantee.

Mike quit the negotiations. The product was cancelled.  The company was closed.

A cynic is not merely one who reads bitter lessons from the past, he is one who is prematurely disappointed in the future.  (Harris)

What hurt the most was that it took Mike six more months to get a different job.  That job paid half as much with no commissions or bonuses.  He had to clean out his savings accounts and sell his cars to survive.  Mike told me, “My pride cost me $250,000.   That was the best offer I ever had. What was I thinking?”

This was an extreme case.  The problem was pride.  When you know you are essential to a project, you want to be treated with respect.  Sometimes that respect kindles the flame of overarching pride.

The job market is really heating up.  I am seeing more examples of this destructive pride.  A manager once told me his policy is, “If two people are absolutely critical to a project and they disagree violently and refuse to compromise or go down one of the two paths, FIRE THEM BOTH.”

Don’t forget, even if you are irreplaceable, the project can be cancelled.  There are always alternatives for an employer.

Don’t let destructive pride make you expendable.

Something To Do Today

Have you ever withdrawn from a job or promotion pool because it took too long to get a decision?  Realistically look back.  What did you gain?

————————–

Later:      How fast?

Daydream

Audible

Down by 20 at halftime

Ten percent more in your next job – part one

You have interviewed with five people at the company.  Your references have been checked.  The background and drug checks came in clean.  Your recruiter has more negotiating skills in his little toe than the whole management chain in that company put together.  Now to see how much money you will be paid for the job.

There is an upper limit you won’t get past.  It may be the first offer you hear.  It may be reached after a week of haggling.  There absolutely is an upper limit.  The best negotiator cannot get you more money than that limit. That limit was 50% more than the salary range for one position I’ve seen. But there is a limit.

What are the factors that set the limit?

  • The company’s finances
  • The other people available for the job
  • Your resume
  • Your interview

That’s it.  The first two are very complex, but you can’t do anything about them.  The last two are closely related.  Your resume and your interview work together to show possibilities.  They show how you might affect company finances. They allow you to be compared to those other people.

The next two blog posts will deal with what information you need to get to your future bosses, and how to radically increase your interview effectiveness. They are about how to get that 10% more.

Something to do today

Make a list of the topics covered in your last job interview.  Tomorrow we’ll see if you covered the most important information.

————————–

Later:              Get 10% more at your next job, 2 more parts

He lost a $100,000 job with this question

I don’t have a bank account because I don’t know my mother’s maiden name. (Poundstone)

True story: He was interviewing for a $100,000/year job.  The interview had lasted an hour.  The hiring manager loved the candidate.  There was no one else interviewing.  The hirer had made up his mind that this guy was going to work for him.  The manager asked, “Do you have any questions?”  The candidate said, “Yes, how much time off do I get and when can I start taking vacation time?”  Five minutes later the candidate was out of the office.  He had no clue why the interview was terminated so abruptly. He was not hired.

Attitude is everything in an interview.  A hiring manager is looking for someone who will work hard.  He wants a team builder who will inspire others.  He wants someone who will take some of his burden away. 

Don’t ever ask the “What’s in it for me?” questions in your first interview.  The correct time to ask is when they bring it up first, or when they make you a job offer. 

Here’s a list of some of those questions you should NOT ask until later:

                   How much time off and vacation do I get?

                   What is your sick leave policy?

                   Can I come in late or leave early sometimes?

                   Do I have to work late?

                   What will my pay be?

None of the above questions is asking anything evil.  You need the answers to all of them.  You’ll get all the answers before you accept the job.  Just wait a bit.

The correct questions to ask are about the company’s direction, your role, potential job growth, your teammates, etc.  Ask questions that show you want to work hard. Your questions should show you want to help. 

Attitude really is everything in an interview.  What you are most interested in asking about will show your interviewer what your real attitude is.