Sunday, October 13, 2013

If You Don't Negotiate . . . . . You Lose! The Initial Loss - Part 1

If you don't negotiate, you lose.  While not true in every case every time . . . . . most of the time it is! 
In most cases, when you choose not to negotiate, you leave $$$ and benefits on the table that could have been yours.  And the long-term problem is that you can't make up the loss! 

It's your choice --  to negotiate or not to negotiate
Upon receiving an offer for employment, you can negotiate the offer or just say OK and accept it.  It's your choice.  But know that when you don't negotiate you run the risk of not getting the $$ or benefits that could have enhanced the offer. Why is this?

A Mystery Solved:  Many of my clients are mystified by the idea that they lose when they don't negotiate.  They are OK with the offer, maybe even pleased.  Here's what they don't know:

Let's look at the issue of pay from an employer's vantage point.  Companies (especially true of mid - to large-sized employers) need to ensure an equitable rate and range of pay for its employees.  Consider that if they had 2 employees with the same basic qualifications doing the same job, and paid them significantly different amounts of money --  and word got out -- Human Resources and management would have 2 very disgruntled employees.  Multiply this discrepancy by 20 or 100 or 1000, and the firm would have anarchy.

To prevent this inequity and the subsequent fall-out, companies employ the following strategies, generally administered by the Human Resources Department: 
  • Strategy 1:  Pay ranges - To ensure anarchy does not happen, firms establish pay ranges for positions.  They take into account the different types or categories of positions they employ.  Within the range, they distinguish between amounts of experience.  Each "pay range" has a range of pay deemed suitable for the amount of experience an employee has, and the amount of responsibility they will have in that particular position.  Employees with little experience receive a lower rate of pay than those with more experience and greater qualifications, such as education, certifications, languages, and work achievements.
  • Strategy 2:  Pay increases - Firms also prevent anarchy by setting a schedule for increasing employees' pay.  This is generally done on an annual basis - the Annual Review.  Firms increase an employee's pay by established percentages if the employee has performed their job well or to an acceptable standard.
Most people agree that promotion = pay increase.  An employee who is promoted will be functioning at increased levels of responsibility.  But not everyone can be promoted - there just aren't that many promotion opportunities; as employees move up the ladder into the chain of management, the number of these positions becomes fewer and fewer.  Yet companies want to reward good performance with a pay increase.  So, they do the obvious:  they hire employees into the firm at the lower end of the pay range.  From the bottom end to the top of a pay range could be a difference of $1000.oos.  This difference = your negotiation opportunity.

So, knowing that a firm is going to probably offer you a salary that is not at the top of the pay range for your position means that you have wiggle room.  Here is your "room" with which to negotiate a higher salary for yourself.  Not doing so leaves valuable $$ lying on the table.

To negotiate or not to negotiate - that is your question and your choice.  Understanding how companies arrive at the offer they hand you can help you make a more informed decision.

For additional information on marketing yourself and your capabilities, please refer to the many articles found under the Articles tabs of the AJC–Career Strategy website.
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