Negotiating for Financial Success

A discussion among graduating seniors and AIChE young professionals at the recent 2013 Southern Regional Student Conference turned to questions about negotiating job offers. The compensation you first receive often dictates your future growth at a firm, so it's important to play your cards right. Here are some things to think about when negotiating your first job offer.

The company is not hiring you as a favor

The price for any market good (i.e., your education, experience, and potential) is the intersection of what the customer (the company) is willing to pay and what the supplier (you) are willing to accept. Many jobseekers are eager to take any offer because they think any job is better than no job. Remember, though, that this is a business transaction, not a favor. Your goal is to get as much as the employer is willing to give. And just like any other negotiated transaction (consider an eBay auction), the maximum possible price is not offered as the opening bid.

Don't go in blind

Would you be willing to play a hand of poker where your opponent could see all of the cards and you could see none of them? That is how most job offers start - the employer has years of experience in negotiating and the employee has none. Read up on salaries in the industry. A key resource is AIChE's Employment and Salary Survey (see the latest information from the AIChE's Salary Survey in the ChEnected series and in the June 2013 issue of CEP magazine), which reports on base salaries in the U.S., as well as correlations of salary with work experience, location, industry, and more. Also, find out what the company pays its employees. How much is a normal raise, and how does it vary based on performance? Are there bonuses, and how much do they vary based on company performance? Web searches and networking through AIChE will help you gather this information.

Cover your hand

It's important to show enthusiasm for a prospective job because employers want employees who are eager to join the organization. At the same time, the best candidates are in demand by other companies as well. Don't indicate that this is the only company you are interviewing with. Instead, show that you are eager to join this firm but would also be happy in other places. If this company wants you, it's going to have to fight for you.

Don't let the company force your hand

Take time to review the offer thoroughly and ask clarifying questions. If the company wants an immediate response, it may be trying to keep you from seeing some red flags. If the company is vague when describing its retirement plan or other parts of your compensation package, ask for specifics before making a decision.

Consider alternative offers

When negotiating for a better offer, you may hear that all engineers of a certain level receive the same salary. Such levels may exist, but even if base salary is not negotiable, other parts of your compensation package may be. You might ask for a signing bonus, or a moving stipend, or a review after six months with a predefined potential for a raise. These are effectively salary increases and may allow the company to maintain its system of salary levels while still satisfying your request.

What matters more to you?

Even if the company cannot offer a larger salary, it may be able to provide higher compensation in other meaningful ways. Do you want a higher salary so that you can take more extravagant vacations? Perhaps you'd be happy with an extra week of vacation instead. Do you want more money to save up for grad school? Maybe the company will pay a portion of your tuition when the time comes. Do you strongly believe in the potential of a small company? Perhaps you can earn equity even if cash is tight.

Rejection is not the end

Some job candidates are concerned about what a prospective employer will think of them if they ask for more money. They may be afraid that the employer will perceive them as greedy or arrogant. But think about any other product on the market: if a car costs more, we think it might be a better car; if a house costs more, we think it might be in a good neighborhood. Why should selling your services be any different? The worst that can happen is the employer will say no and stay with the original offer; the employer will not rescind the offer altogether because you asked for higher compensation. When you do come to an agreement, however, be gracious and express gratitude that you were able to compromise. That sentiment will stick with your employer.

Regardless of what you negotiate, be sure to follow through as though you were buying a car or a house. Make sure every part of the offer is in writing, ask that it be signed, and keep a copy for yourself. The company should be proud of the compensation it can offer to you and you should be proud to accept it.

What are your tips/experiences in negotiating job offers?