Negotiating salary

Dear Bob …

I’ve been temping as a developer for six month. The company wants me to sign up as a full-time employee.

I’m the salary negotiation stage. Have any tips or words of wisdom?

– Haggling

Dear Haggling …

My single most important piece of advice about negotiating is to know what you want and be happy if you get it. The biggest mistake I know of is worrying that you might have been able to get more.

The second most important piece of advice is to work very hard to get the company to name the first number. Whoever names the first number is in a weaker position, because they’ve closed off their upside, while the other side hasn’t.

If the company insists that you go first, explain that you’re already billing them as a contractor so they know your contracting rate. You’re looking for an offer that makes it worth your while to convert to employment.

Which means you can’t agree that being an employee is, in your eyes, better. Make it clear that in some respects you consider it to be worse for you.

The third most important piece of advice is to do everything you can to keep the negotiations multidimensional as long as you possibly can. By that I mean keeping more than one compensation parameter in play at the same time, so you’re in a position to give up something in order to get something.

Among the factors that could be part of a compensation negotiation are: Base salary, “variable compensation” (bonus), number of vacation days and signing bonus. You probably can’t negotiate benefits, but be fair to your prospective employer in looking at these – from their perspective, benefits cost the same kind of money that salary does.

Decide in advance how hard you’re willing to negotiate. The general rule is that whoever is more willing to walk away from the deal will do the best.

If you’re happy where you are and the company is driving this deal you’re in much better shape than if you really, really want to become a full-time employee. If you’re happy where you are, it makes perfect sense to tell that to the person on the other side of the table. “I’m happy where I am, billing you as a contractor. And it lets me keep my options open, where becoming an employee takes me out of the marketplace. The deal I’m asking for is what I need for converting to an employee to make financial sense for me.”

Another point: Good negotiations require patience. Don’t be driven to reach a conclusion – let that be the other side’s worry as well. “You’ve heard my request and I’ve heard your offer. Why don’t we both sleep on this and get back in touch tomorrow,” is entirely valid.

Sometimes, a prospective employer will offer less than you want while promising a substantial increase should you pass some sort of milestone – successful completion of a project, end of a probationary period or something. If that’s the case, it’s okay to accept it, but make it clear you’ll expect to see it described in your offer letter.

Also … when you get a promise instead of money, make sure it’s attached to completely objective criteria for success. Even if you completely trust your opposite number, he or she could be gone when you achieve the milestone.

All of this does, of course, beg the question of figuring out what you should be asking for in the first place. The salary database sites such as salary.com are the best free resource I know of for this.

Don’t take them too seriously, of course. They’ll provide general guidance. Once you look at them, remember point #2: The odds are low that you’ll get more than you ask for. Don’t ask for anything that’s completely out of bounds, of course. Start with the richest deal that seems to be within reason and take it from there.

And of course, if you get it, I want 10%!

– Bob

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