When negotiating compensation, timing is key.

Are you intimidated about talking money? Even people who have years of experience in their field, and feel comfortable networking in any setting, may experience more than a little discomfort when it comes to the challenges of negotiating compensation. When do I start mentioning money? Should I be the first to mention it? Should I start high, or be realistic in my demands?

A Poker Game . . . or a Courtship?

Let’s be clear on a couple of things here. First, there are no hard and fast “rules” about negotiating compensation. Different companies and executives have their own style and you are on their playing field. And then there is the economy and business climate around the company and the competition for people in your field. There are, however, some pretty well-established “guidelines” that should give you a good chance for a better outcome.

Second, this is not unlike a poker game with courtship-like overtones. You want to appear open, cooperative and interested without being too eager or showing your hand prematurely. Just as you are putting your best foot forward and using the power of your Accomplishments Library to enhance your image and perceived value, the company’s representative will be extolling the company’s virtues.

As with the other components of this training, we believe there is a process you should follow when negotiating compensation. Most important to the process: patience! You must wait until the time is right to begin the conversation. And, know your numbers . . . not just the base salary, but the real value to you of every aspect of the compensation package. (We’ll get to the second point later.)

The Hiring Process Has Its Own Tempo.

We spend a lot of time in the Marketing Tool Kit section on the Sales Sequence of the Executive Job Search. Each step has its own purpose, and its own tools that help move the process to the next step. If you begin discussing or try negotiating compensation at the wrong time, you can sabotage your entire effort!

The First Phase, the Prospecting Phase, may take a week to ten days to complete, and involves a number of letter and telephone contacts. It may take longer or it can get you to the Interview Phase more quickly, largely dependent on how skillfully you use your Success Stories. (Yes, that’s right, we’re back to the importance of the Accomplishments!) Since you may be dealing with junior people during this phase, negotiating compensation or even mentioning it is typically out of the question.

The Second Phase of the job search, the Qualifying Phase, may last considerably longer, and is all about letting your accomplishments establish your desirability and demonstrate your value. Here’s where your letter-writing skills and your various written tools (resumes and of course, Accomplishments!) make an appearance – and make a big difference.

Again, you should avoid discussions of salary or compensation. If you are asked what you are expecting, the answer might be along the lines of, “I believe the range for this job might be something like $80,000 - $120,000.” Citing a broad range shows you understand the marketplace, but doesn’t commit you to a place within that range.

(If asked, “Where do you see yourself fitting into that range?” . . . A good answer might be, “I’ll be better able to comment on this when I fully understand the company’s needs and how I might fit in.”)

Knowing Your True Value is Critical.

Once you reach the third phase, the Interviewing Stage, you will be face-to-face with potential co-workers and, ultimately, the person making the hiring decision. Throughout this phase, you should again avoid discussions of compensation, particularly your past compensation. Hopefully, you still have some as-yet-unused Case Histories to pull on (yes, that’s right, Accomplishments!) If you always have a good story to tell that is (or that you can make) relevant to the conversation, it will make your Executive Job Interview process and negotiating compensation go more in your favor.

Remember, you will be making a contribution to this new company – perhaps even playing a key role in rescuing it! – so your value should be based on that contribution and what it is worth the marketplace. (Be sure to review the “Value Comparison Matrix” in this section.) If you are again faced with question like, “How much do you think you are worth?” you can once again, simply put off an answer by saying, “That’s a key question and one I’m working on. It will help me answer it better if we first get clear on the requirements of the job, and more precisely how well I would fit.”

It is only at the very end of this phase that negotiating compensation should take place – and then, only after the person making the hiring decision has already decided that he or she wants you aboard.

How do I know when they want me?

As an experienced executive, you can trust your instincts. You’ll instinctively recognize the signs that they want you. But as a review, here are a few things you can watch for:

The interviewer starts using assumptive terms like “we” instead of “you” and the body language changes from an interrogative stance to more of a sales posture.
The interviewer starts talking more in terms of “when you come aboard” instead of “if” or “should you come aboard.”
The conversation includes questions about when you can start, how you will commute, etc. (/li>
The interviewer starts talking about current company projects in more specific detail, and stops asking about your past work or projects.
The interviewer starts “selling” the position: fringe benefits, potential additional perks, advantages of the neighborhood, prestige of the clients, etc.
You get introductions to key people in the organization, and potential co-workers.
You get invitations to lunch or dinner.

Once you know they want you, and you’ve actually even heard the words, “You’ve got the job,” is no time to celebrate or fully relax. In fact, you want to control your emotions – because now, if you intend to negotiate, they have to convince you to join them!

Setting Up a Separate Interview for Negotiating Compensation.

Compensation is always negotiable. But it has to be discussed! If possible, you will be well advised to request a separate interview for negotiating compensation, so you can prepare. And, if you’ve taken careful notes in the preceding conversations, you should have a pretty good idea what will be expected of you and how much you could be worth to the company.

At the executive level, a number of items fall within the negotiations. They include, of course, money. But before you start discussing salary, be sure that you confirm the answers to the following questions. You should already have a good understanding based on your earlier interviews and research of the company. But start by getting the “official” answer.

What is the scope of the position? What will be my job responsibilities? Who will be reporting to me?
What is the purpose of the position? Will I be simply filling a vacancy or actually creating a new position where new skills and new solutions are required?
What does the company’s organization chart mean to my opportunities for promotion?

Preparing for the Interview.

Today’s market realities are such that this job may be paying less than what it used to – or what you used to receive. Or, if you are changing careers, you may have to accept a less senior position and thus a step back in salary. The point is, the market dictates the salary.

If you have done your research, in the industry and in the area where your new position is located, you will have a good idea of what salary ranges to expect. It is up to you to assume you will be at the higher end of the range, and to come from that psychological position in negotiating compensation.

Setting your Personal Limits.

Naturally, you will have personal limits as to the lowest number you can take. If you have responded to an earlier question about your requirements with a statement about “a fair range for this position,” then the low number of that range should be the lowest number you will accept.

Likewise, you should have an idea of what other aspects of the compensation package could be “deal killers.” For example, if the job as described requires travel, but you find that means over 100 trips a year, that may be unacceptable to you. (But perhaps you can negotiate a different mix of job responsibilities?) In any case, in preparing for the negotiation you should have a clear idea of what you CANNOT accept. You may be surprised at how many things this leaves for negotiation!

Preparing a Negotiations Worksheet.

The closer you get to the negotiations interview, the better idea you will have of what items can go into your compensation package. However, it is difficult to keep them all clearly in mind without a systematic reference mechanism. We recommend a worksheet that you complete in advance and take with you to the meeting.

The JobSearchMarketingMachine Negotiations Checklist lists a number of items that may come up in negotiating compensation for executive positions. Not all may apply to your situation or a particular company you are interviewing with. In some cases, you may be able to add more.

Keeping Your Negotiations Balanced and On Track for Success.

Generally, the items fall into three categories: salary (base salary, stock options and bonuses, etc.), company benefits (health, insurance, automobile, etc.), and personal benefits like flex time, child care, vacations, etc.. Naturally, negotiations around salary may seem the most challenging, but often it is the negotiations about benefits that keeps the process moving and interesting, and allows you to “create” the job you really want.

Example: When you get to an impasse on one subject, switch topics . . . “Well, let’s talk about the flex time and come back to the salary issues later.” Or, phrase a question, such as: “Does that mean that we can have a review in ninety or 120 days for a possible merit increase?”

In fact, as we have pointed out repeatedly, use questions to guide the conversation and frame them in such a way that the hiring manager’s posture isn’t threatened. You can guide the conversation while letting the other person remain in control.

We recommend you print out several copies of the worksheet and complete one in advance for each job you are considering. They become part of your body of personal market research and will provide substantiation for requests you may make or support for not conceding to demands the prospective new employer may make. And keep in mind that your worksheet – like your expectations – may well need to be modified or updated along the way so staying flexible is important.

Remember, You Are Negotiating For a Win-Win Result!

The purpose of negotiation is to reach an agreement that works for both parties. It is NOT a battle with a winner and loser. Remember that the ultimate goal is a satisfying working relationship. You don’t want any lingering misgivings or resentments about having driven too hard of a bargain.

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SBI!