Article #5 From the "What If ..." Library on Salary Negotiation

What If ...

It's an Employers Market
Remember when contemplating a job change that results and the strategies to achieve those results will be largely dependent on whether it's an employer's or candidate's market in your industry. In an employer's market, where the field of candidates can get crowded, prepare yourself for the fact that you won't have the leverage to negotiate the same lucrative offers and salary/benefit packages that may have been easy just a short time ago. Just like the real estate market, timing is everything in the boom and bust cycle of highly volatile job markets like IT so be prepared for those tougher talks on pay and benefits in leaner times.
In recessionary times top level execs may, for example, emphasis their previous negotiated benefit package and bonus incentives rather than what was actually paid out. It's not uncommon, in fact, for senior executives to outsource some of the trickier areas of negotiations to coaches, lawyers and accountants improving the odds that they don't fall prey to the complexities of an offer only to find themselves losing ground.
There are several steps you can take, however, if you're going it alone:
  • Prepare yourself by researching trends you pick up in general business news, periodicals and particularly trade journals. Plot an easy to compare chart or spreadsheet to keep track of where you're at, where you want to go, and where the latest offer fits. Believe it or not, it's not as easy as it seems to put a hard number on your existing package. See below.
  • Pay particular attention to bonus cash items since this is the first place top corporations tend to trim. Companies, in an effort to conserve cash in leaner times, may pay out only a fraction of target bonus numbers and some will just drop them altogether.
  • Stock options is another area where it's easy to lose ground. It's the exception when a company can hold its market value in a leaner economy and since you're betting on a race that you're running in, you're going to lose value as well. Search out opportunities to boost supplemental stock grants during these times or leave room to have existing grants re-priced. This is especially important when considering the traditional three to five years you already have in the job just to become vested in these programs.
  • To strike the best deal you have to know what your current salary and benefit package is worth. In addition to your salary which should include the value of any and all regularly scheduled increases, be sure to put a dollar value on stock options (remembering that, as a rule of thumb, your perspective employer will consider them worth no more than a third of their value on the date the grant took place). Put a value on everything - that means all medical, dental, eyeglass, and disability insurance, both short and long term. It means your company car, the athletic club, yacht club or country club membership, all of it. Spend an entire afternoon if that's what it takes, but know what your current package is worth in hard dollars, and know it cold. Only then will you be in a position to make meaningful comparisons on each element of a competitive offer. Remember too that the further into the future a benefit is placed, the less value it has.
  • Know where you're at relative to others in your field. Professional associations as well as the Internet have a slew of information on compensation data available by industry, job title, even zip code for your location which would take into account available cost of living data. Check out, for example, the salary tables and pay surveys available at
  • Don't forget the intangibles. Issues like the general work environment, the amount of autonomy and control on the job, trust levels, all the items that are nearly impossible to put a dollar value on still can make all the difference to your effectiveness and sense of fulfillment on the job. How does this organization's values and ways of doing things match your own? These are items with value that need to be factored in.
In the end there can be a fine line between a desirable candidate who knows what he or she wants and someone whose perceived by their potential employer as a lone wolf and not a team player. Trust your gut. You know that you're going to want more and they're going to want to offer less, that's a given so don't let it become confrontational. If you are a desired candidate, the new employer has no vested interest in bringing you into the organization on a down note or unhappy. Try to keep it from becoming a contest by keeping your tone and demeanor always conversational and professional rather than combative.