Commandments for Smart Negotiating
Be Lee Miller
The job market is the best it's been in 20 years. The
Commerce Department estimates that U.S. businesses will need
to hire one million new computer scientists, engineers,
systems analysts and computer programmers by 2005.
Yet graduates with degrees in computer science are being
produced at a fraction of the rate needed. The Information
Technology Association of America reports 190,000 current
job openings for web experts and other
information-technology specialists, and similar shortages
are cropping up in other industries as well.
These market conditions provide a great opportunity to
negotiate an excellent compensation package, but only if you
There are 11 basic commandments to help you negotiate the
best possible deal when changing jobs, whether internally or
with a new company. They are:
Be prepared. The more information you have about your market
value and the prospective employer, the greater your
likelihood of success. This is the first commandment because
it's the most important. There's a wealth of information
available on the Internet, at the public library and through
professional associations and networking groups. Time spent
learning how to negotiate and preparing for negotiations may
be the best investment you'll ever make.
Recognize that employment negotiations are different. When
the negotiations are over, you'll have to work with the
person with whom you're negotiating. Moreover, your future
success may depend on that person. So, while you want to
negotiate the best possible deal, you need to do so in a way
that doesn't damage your image. At the same time, the
employer's primary concern isn't negotiating the least
expensive compensation package it can get away with. Rather,
their focus will be on getting you to accept the job.
Understand your needs and those of the employer. To be
successful in this type of negotiation, you need to examine
your priorities. What do you really want? Are you
comfortable with a low salary and a large equity stake? Are
you able to handle dramatic swings in income from year to
year? Understanding your needs will also help you determine
the type of company you want to work for. For example, a
family-owned company may be able to offer a competitive
salary and a large bonus based on results, but may not be
willing to offer significant equity to a non-family member.
A start-up company, on the other hand, may not be able to
offer market salary, but will typically offer stock options.
By recognizing what an employer can and can't do, you'll be
able to determine what issues you should press.
Understand the dynamics of the particular negotiations.
Sometimes you'll have skills that are in great demand. And
sometimes, you may be one of several qualified candidates
the company would be happy to hire. Sizing up the situation
and understanding the relative position of each party will
help you determine when to press your advantage and when to
Never lie, but use the truth to your advantage. It's not
only wrong to lie, but in employment negotiations, it's
ineffective. If you lie during negotiations, sooner or later
you're likely to be caught. Once you are, even if you don't
lose the offer, you'll be at a tremendous disadvantage, and
your credibility will always be suspect. On the other hand,
total candor won't be rewarded. You're under no obligation
to blurt out everything you know. You can determine what you
want to say and how you want to say it, and try to put
everything in its most positive light. One key element of
your preparation should be to recognize areas of concern so
you can rehearse how to handle them when they inevitably
Understand the role fairness plays in the process. The
guiding principle for most employers when negotiating is
fairness. Within the constraints of their budget and
organizational structure, employers usually will agree to
anything that's fair and reasonable to hire someone they
want. Appeals to fairness are your most powerful weapon.
Thus, you should be able to justify every request you make
in terms of fairness. For example, if other computer
programmers in similar companies are being given sign-on
bonuses, you should expect to be treated no differently.
Your prospective employer will want you to accept its offer
and feel that you've been treated fairly. Understanding the
importance of fairness as a negotiating principle can make
the difference between success and failure.
Use uncertainty to your advantage. The more information you
convey to a potential employer about your bottom line, the
more likely it will limit what you get. Before making an
offer, a company typically tries to determine what it will
take for you to accept the position. With that information,
the prospective employer will be able to determine the
minimum package it needs to offer. While they may not offer
you as little as they can get away with, if you've divulged
too much information, they likely won't offer you as much as
they might have otherwise. By not disclosing exactly what
your current compensation is or exactly what it would take
to get you to leave your job, you'll force a potential
employer to make its best offer.
Be creative. Consider the value of the total package. Look
for different ways to achieve your objectives. Be willing to
make tradeoffs to increase the total value of the deal. If
you're creative, you can package what you want in ways that
will be acceptable to the company. You'll also be able to
find creative "trades" that allow you to withdraw requests
that might be problematic to the company in return for
improvements in areas where the company has more
flexibility. That way, you can maximize the value of the
package you negotiate.
Focus on your goals, not on winning. Too often in
negotiations, the act of winning becomes more important than
achieving your goals. And it's also important not to make
your future boss feel as if he's lost in the negotiations.
You'll have gained little by negotiating a good deal if you
alienate your future boss in the process.
Know when to quit bargaining. The one sure way to lose
everything you've obtained is to be greedy. There comes a
point in every negotiation when you've achieved everything
you could have reasonably expected to gain. While most
companies will want to treat you fairly and make you happy,
few companies want a to hire a prima donna. Being perceived
as greedy or unreasonable may cause the deal to fall apart.
Even if it doesn't, you'll have done immeasurable harm to
your career. This brings us to the 11th and most important
Never forget that employment is an ongoing relationship. Job
negotiations are the starting point for your career with a
company. Get too little and you're disadvantaged throughout
your career there; push too hard and you can sour the
relationship before it begins.
Understanding these principles will allow you to effectively
negotiate the terms of your new job. Then do your job well
and continually seek out new challenges. As you take on
added responsibilities and learn new skills, there will be
opportunities to negotiate further improvements.
Mr. Miller is a consultant in New York for Advanced Human
Resources Group Inc., and teaches at Seton Hall University.
He's a Harvard educated lawyer and the former senior vice
president of human resources for Barneys NY. This article is
adapted from his book, "Get More Money On Your Next Job: 25
Proven Strategies For Getting More Money, Better Benefits
and Greater Job Security" (McGraw-Hill, 1998)
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