Salary Negotiations

[JTO]

Hi All,
I need some guidance before engaging in salary negotiations for a new job.
First, a little background. A recent reorg has most people pretty nervous at my plant. I escaped but am board with my current assignment and may not be secure in the long run. Three years ago I was recruited away from the company that is looking to hire me. Secondly, the hiring company is an important customer of my current employer. I am a shoe-in for the job because of my tenure there. I am universally respected by the staff and they want me on board.

The question I really need help with is whether it is always appropriate to expect financial advancement, even when switching industries. In other words, should I hold out for no less than a 10% increase in salary? Is it ever OK to make a horizontal move? I think the trouble in my mind is that the prospective employer in general does not compensate as well as the current.

I know this is an odd question and probably confusing. I am getting a lot of pressure to only accept the new job if its a positive step financially. I have a feeling that their offer will be lower than my current pay. Opinions and philosophies welcome.
Troy

[PRE-H20]

troy,

i am a financial recruiter specializing in finance and accounting. a few things come to mind in reading your post.

1. forget about the outside influences, its your job/career, you are the only one that is gonna get up to work everymorning.

2. if there is a re-org and your role may be compromised, having a source to generate income should carry some weight to you, if you pass up a role AND get laid-off then?

3. if you were "recruited" 3 years ago, why didnt you make the move then? if they were intrested then, you may be more valuable now with 3 more years experience. or they may know you are looking due to the instability at your current role and offer less$ now.

4. as far as salary, it is important for you to acess what is your bottom line BEFORE you get into the negociation stage, that way you know where to draw the line and walk away from the role. now the things you should keep in mind, are

- the role/advancement
- benefits (med, den, vision, 401k and compnay match, bonus, exempt or non-exempt, hours expected to work weekly, tuition re-imbursement, section 125 plan, vacation days or pto, employee contribution in insurance premiums, when due benefits kick-in, and this is just to start)
- commute
- industry
- SALARY

as far as the new company not paying as well, as you can see so many other aspects come into the picture, you need to acess what is most important to you and where are flexible and where you are not, this can be a very difficult time but if you take inventory on what important to you before you are ina decision situation it can be very easy.

if you get laid off,.... you have nothing to keep your p-car going........ i have a 74 911 coupe,.....

i hope this helps.

[jrdavid68]

alexander911 - What is a section 125 plan?

[PRE-H20]

its a type of "shelter" where you dont have to pay taxes on $ deducted from you check for a specfic item

med bills
transportation costs
den costs

etc etc etc....... you choose where that $ gets applied to, you then can submitt receipts and be re-imbursed at 100%, hence no taxes.

[Superman]

Relax. Prepare, but don't over-analyze. They may ask you for your salary requirements. Or they may tell you "we're prepared to pay $xxxx." If they ask you for a figure, give them one. Personally, I'd add something like 10% to my current salary and give that to them. See what they say. Whatever is said, you thank them graciously and advise them that you will consider their offer. Then, you basically decide whether the offer is something you want to accept.

But if you're asking whether there is some stigma associated with a lateral move, I would think there is. If they offer you a perfect lateral (no salary change) move, or even a move downward in pay, there are plenty of reasons why that might be a legitimate offer.

[JTO]

Thanks Alexander and Super,
I have done the homework in terms of what it will cost to live in the new area. Housing is roughly 10% more expensive. That is the figure I am using to calculate a horizontal move. In other words, to maintain my current standard, it will cost roughly 10% more money. On top of this I have added 10% increase. This puts me well outside of historical pay levels for this position at this facility. So, knowing this, I feel a bit defeated before negotiations have even started.
Now, what would you do? Knowing that things may be tenuous at my current employer (but maybe not!)...

Thanks for the input. It is really appreciated,
Troy

[PRE-H20]

i would respectfully disagree with superman, in dealing with top-tier cfo's, vp's of finance, directors of fp&a's, etc etc etc "thinking about" can/ will eliminate you as a candidate at certain levels of employment.

i WOULD 100% agree in the idea of being PREPARED. and part of that is preparation is knowing where you minimums are in several differnt areas.

couple of examples,.... if you have gone through the interview process and have met the folks invloved, asked all you questions, feel good about the role, had all you concerns addressed, all your red flags settled, then you get an offer and you have to "think about it" then what EXACTLY do you have to think about if you have gone through your due diligence? this method leaves a leaves a sense of not being thorough and unsure of what you want. if you are clear on what is acceptable to you, then the offer stage should a no-brainer based on your "process"

2ndly "adding something like 10% to my current salary" what if the company was thinking a 20% bump? will they pay the 20% or the 10% you requested? in dealing heavily in high level negociations "clarity and confidence" will get you more that leaving yourself at their mercy,..... there are so many variables involved with negociations that "being prepared is essential,..... you can "relax" after you have secured a role,.... being well prepared will pay-off in the end.

[Superman]

My advice is very much still the same. Go in there will what you consider reasonable. Your observations about living costs are relevant. But, it sounds like you may also be just using that as a starting point. In other words, going in there with a "this is my bottom line" positon is very very different from "I think this is a fair rate of pay" position. If they cannot afford your suggestion, then perhaps that makes the decision tougher for you, but the relationship is still healthy until someone gets mad and closes discussion. This is all fair game. It's like in those wrestling matches where the contestants are crouched, moving sideways, planning a takedown, but they're not touching each other yet.

And with your current postion expected to dry up (BTW, your prospective new employer may not know about this fear of yours), you may be willing to take a pay cut. Again, your call. But here's one thing for sure: You don't get what you don't ask for. Many many times, people have entered these discussion afraid to ask for the really attractive salary. In many of those cases, the candidate could have gotten the attractive salary, had he or she asked. In fact, in many cases, the employer comes away wishing the candidate had bargained for a higher salary.

What was that one story? Candidate is sheepish about salary and says "I'd ask for thirty," thinking $30K per year. The employer says
"fine," and begins the worker at an hourly pay rate of $30 per hour. (that equates to $60k per year)

[JTO]

I guess there's no simple answer. Its not just about the money or benefits. Its also looking into the future and trying to decide what course of action is best for me and my family. That's difficult. Being a scientist I like things concrete. I like salary figures because I can run a calculation and relate it to intangibles like "happiness" (if happiness can be derived from a nice house with a big yard, vacations, etc.).
Thanks,
Troy

[PRE-H20]

you shouldnt feel defeated at all,..... this is what a company would look for, a well thought, well constructed approach, this mind-set can directly apply to the way you approach your job/role, thorough and complete, you already mentioned they tried to recruit you 3 years ago, so immediately you know you are ahead of the people that are trying to get in, THEY SOUGHT YOU, 2ndly you are well known and respected by the people in their own company, since you are familiar with the product, line of business, industry, and personnel, are you worth an xtra 10% or more? you have answered you own question, 85% of the time a company will always give themselves some wiggle room for the right person... your own words were i am a "shoe-in" for the role..... all these things should give you confidence and not a feeling of being defeated... you already know you have what they want,........ dont be afraid to know you worth....... just my HUMBLE opinion.

[PRE-H20]

superman, i think we both are on the same page, different verbage..... we should start our consulting business......

good job,....

jto,... go get your job.

[JTO]

Thanks Super. I think you are right. I will ask for what I want with the hope of getting it. I'll negotiate to the best of my ability in a cordial fashion. These people are my friends and we know each other pretty well. Hopefully it will go well and regardless of the outcome, we will remain friends.
Thanks,
Troy

[JTO]

Thanks to both of you. I'll let you know how it goes.
Troy

[Superman]

I'm not sure Alexander really is in disagreement with me, and I'm not feeling in disagreement with Alexander. But, it sounds like Alexander is expecting the 'hardball' sort of 'think fast' tactic on the part of the employer. I deal in labor negotiations daily, and while I am prepared to lay it on the line at any moment in terms of "bottom line" issues that someone ultimately will need to accept or move on, I rarely place that information before them in such a primitive fashion. That might be fun for amateurs, but in my world the players determine, rather than dictate, the pace. Sometimes, again in my world, time is of the essense. The workers are at work, and the longer the issue festers, the more liability accumulates. Again, the players determine the pace, and they notice that something needs to be decided quickly. How quickly....is still up to them. Playing hardball in the sense of needing a decision immediately, right now....well.....if there is no actual reason for this time frame other than high-pressure tactics and someone entertaining themselves at the emotional expense of the candidate, then I take that as an indication of what it would be like to work there.

But then, I have come to understand that there is a GREAT difference between "human resources" and "labor relations." I once wanted a job in Human Resources. That was a long time ago.

[Superman]

Alexander is right on again. Elements in your story are in your favor. You are the "bird in the hand," the known quantity and quality. There is a WIDE range of qualities and quantities, and chosing the wrong person is enormously expensive. If I were this company, and I wanted to hire you, and I knew your work and your personality, and you'd be perfect for the job, I'd offer you a futuristic salary. Not astronomic, just futuristic.

Have fun with it. It's nerve wracking, I know, but can be a BLAST. Also, I'm glad to see that you are watching the big picture. Quality of life. Peace. Happiness. It's a "whole package" thing. Sometimes I can hardly believe they pay me for having the fun I have at work. Conversely, there are jobs too terrible to perform, regardless of how much money they offer.

[JTO]

Thanks again Mr. Super. It'll be intersting watching this unfold.
Troy