Tag Archives: salary negotiation

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?”

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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?

How much do we have to pay you? – The correct answer

It’s your first interview.  Things are going well.  The wall clock says you’ve been here 45 minutes.  That’s good.  Then the hirer sits back in his chair and asks, “How much do we have to pay you?”

This can be a disaster.  If you come up with too big of a number, they won’t hire you.  If the number is too small you won’t earn as much as you could.  Is there any way to win?

Your answer needs to show a great attitude.  It can’t sound like you are greedy.  It must leave the door open for negotiations.  It has to get you a job offer so you can really start negotiating. Try this:

 “I really like the opportunity you have described to me.  This is a great company.  I would love to come to work for you.  In my last job I earned (amount), I certainly wouldn’t want to work for less.  What I would like… is to be able to entertain your best offer.”

Show them your attitude first.  Let them know you like the company and the job.  Give them the historical fact of what you last earned.  Then defuse the question by saying you want to see their best offer.

This line works.  Most of the time they’ll stop asking you for a number. If they ask you again, repeat the line. Eventually you’ll be negotiating wages, but try to put it off until they really want to make you an offer.

Use the money question to show your attitude.  You’ll get more job offers. You’ll also make more money.

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Something To Do Today

Put this question and answer down in your interview preparation notes.  Practice saying it five times before every phone interview or in-person interview.

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Later:             My last job stunk

Fired!

Salary negotiation and gender judo for women (and men)

Women have to be careful how they ask for a raise.  Sorry, there are just some prejudices that can cause trouble.

In this article they give several salary negotiation tips that work great for women, and also great for men.

What to do the first time salary is mentioned

“Will you work for minimum wage?”

Not a winning question when negotiating salary with an engineer.

“Give me all your money!”

Probably not a wise gambit for any job interview.

At some point in your job exploration the question of money has to come up.  Asking a recruiter what the job pays is fine.  Asking what your pay will be in a phone or first interview is a mistake.  They may have been given strict instructions to only mention $50,000, but have been told that they can go to $60,000 for the right candidate.  That happens all the time.

When THEY ask you how much you must make to switch jobs, THEY are nervous.  So are you.  Here is an answer that works.  It doesn’t get you eliminated for asking for too much.  You won’t get paid too little for being too meek.  It leaves room for negotiating.  It gives them the information they need to make you a good offer.

The answer has 3 steps:

  1. the compliment
  2. the money
  3. the rules.

First the compliment.  This job and your company interest me.  I’d like to go to work for you.

Now the money.  Last year I earned a total of $70,000 and just had a raise to $73,000.

Finally the rules.  I certainly wouldn’t want to earn less.  I would like to be able to entertain your best offer.

This works for minimum wage jobs and CEO salaries.  If they ask a second time, tell them the same thing.  Let them know that you feel it is the company’s job to make an offer, not yours.  You just tell them the facts about what you are earning.  That’s all.  You can negotiate AFTER they have decided to make you an offer.  Then you will have some leverage.

How to think about salary – do this.

Write down three numbers.

First, what are you earning now?  Obviously you would take your current job for that much money.  You did.

Second, what do you really think you would be paid in a good but realistic situation if you switched jobs next month?  It should be a raise.

Third, if the ideal job came along, with you doing, learning and being exactly what you really want, with a great company and future, what is the least you would take to go there?  Is it a drop in pay?

You now have three different numbers you would work for.  So why should you demand to know what a job will pay before you find out which of the three possibilities it is?

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Tomorrow:     Negotiating a salary at a new job – really negotiating

Later:              All I want is more money, vacation and benefits

A crippled ace

An ace who learned