But, if you can tolerate a small degree of risk, research says you’ll do better if you go first.
This makes it doubly important that you wait until you’re sure they’re ready to make an offer. If they’re still window-shopping and you start negotiations with a high number you can bump yourself out of the contest. Salary-Making Rule #1 tells you to avoid serious money talk until they’re making you an offer. Ask them, “Are we ready to explore compensation, or is there still some other consideration about hiring me we need to handle?”
Whether you go first or second, use Salary-Making Rule #3 to reply to the employer’s offer. Rule #3 is “repeat the number or the top of the range, and be quiet.”
In the moments of silence that ensue, think and compare the offer with your own trio of numbers you brought with you: Ideal, Satisfactory, and No-go.
I = Ideal. The biggest package you can imagine that still passes the “laugh test.”
S = Satisfactory. A salary that would have you feeling okay and satisfied about going to work.
N = No-go. Any offer below this is unacceptable; you’ll go back to the drawing board to see if there’s other compensation that can make up the difference.
Read The Book To Learn
• Principles behind good Salary Negotiations
• What’s true and what’s not about “The one who goes first loses”
• The full overview of negotiations regarding who goes first
• Fuller explanation of the benefits of going first
• Fuller explanation of the dangers of going first
• An example of “You Go First”
• An example of “You Go Second”
• Unique nature of Salary Negotiation vs. ordinary negotiations
• How “anchoring” functions in negotiations
Lightning Round III
Salary-Making Rule 3
When you hear the figure or range, follow Salary-Making Rule #3: repeat the figure or top of the range, and then be quiet.
Whether the hiring decision maker is going second and responding to your “Ideal,” or whether he’s speaking first to enter into hiring negotiations, your action is the same: repeat the figure or the top of the range and be quiet.
What Happens When You’re Quiet
Sometimes you’ll get an explanation of why the budget allows only that much. “Times are rough, competition’s tough.” Sometimes you’ll get a raise in those seconds of silence.
Don’t compare the offer with your most recent salary. Instead, use the thirty seconds to compare their offer with your number trio, based on the formula below.
Formula
The numbers for the market value range for you are your own trio of numbers. Ideal, Satisfactory, and No-go, or ISN, Market Values. Here is how to determine this crucial trio: Your Ideal, Satisfactory, and No-go Market Value.
A market value is a picture made up of several pieces: your Objectively Researched Value (ORV$), your extra Individual Value (IV$), what I’ll call your Risk-factor Dollars (Rf$), and benefits and perquisites.
Think of it as a formula in which your personal market value equals the sum of four other values:
ISN Market Values = ORV$ + IV$ + Rf$ + Bennies/Perks.
To fully understand these factors, you need some definitions.
ORV$ (Objectively Researched Value). Objectively researched information from current published data about the going rate; this year’s average earning range for people doing the kind of work you’re considering.
IV$ (Individual Value). A subjective assessment of the strength of your past track record as it applies to this new job or promotion. It puts you somewhere on a scale from entry level to seasoned professional, possibly with a unique competitive advantage. IV$ measures how you stack up individually above or below the competition.
Rf$ (Risk-Factor Dollars). Compensation you are willing to make contingent on your future success, or performance-based compensation.
Benefits and Perks can round out the package.
Calculating the Three Factors (Objectively Researched Value)
Find out in what range people get paid for work similar to yours by consulting published surveys. Make sure you’re comparing apples to apples, that the salary you find matches the responsibilities of the job you expect to be paid for.
You may have a hard time matching your job to a job title. You’ll need to pick one—or two, perhaps—that seem close. Where there are actual job descriptions along with the titles, that can help you select a title most closely related to the level of responsibility.
Once you’re on track with a title and perhaps a job description, begin collecting pay-comparison-analysis information that will coalesce into your objectively researched value (ORV$). The four online “preferred providers” for competitive salary information are
Calculating the Three Factors (Individual Value)
IV$ refers to your assessment of how well (or poorly) you can do the work compared with other candidates’ ability. Are you a cut above average? Well known? Have a special expertise? If so, your added value can add dollars to put your salary in the above-average range.
Calculating the Three Factors, PART III: Rf$
Objectively Researched Value determines a range, and Individual Value a place within that range. Rf$ can take the salary off the chart! Whenever you are willing to negotiate compensation contingent on performance, you add what I call Risk-factor Dollars (Rf$).
Employers’ basic principle in hiring (and conversely, firing) is the Make Me a Buck principle. They bring you aboard because they think your contribution will pay back more money than you cost. Are you willing to bet on it?
