Negotiating in a Tough Economy: 6 Lines That Work

Last Updated Dec 14, 2010 9:10 AM EST

Friends have been recounting horror stories about salary negotiations lately. Seems that in this competitive job market, there's not much give from employers. Same goes for freelance work. The line from the company is, "This is the fee we can pay. Take it or leave it."

Ouch. Feels like no one wants to rock the boat when times are tough. So what can you say to get a good deal for yourself in a bad economy? I asked Professor Laura Kray, Ph.D. (below), who teaches negotiation at U.C. Berkeley's Haas School of Business, for tips on negotiating your pay.

Q: When people have been out of work for a while and they finally land an offer, they don't feel like they can be too aggressive about their salary. Can you always ask for more?
A: Obviously it's important to be realistic, pragmatic, and put yourself into your future employer's shoes, so you understand the situation from their point of view. That said, think broadly about what it is you're negotiating for, beyond, "Can you pay me an extra X number of dollars?" In a sense, you're negotiating for how you're going to maximize your chances of success in meeting your employer's expectations. So you can negotiate for mentorship, for when you go up for our first review, for deadlines.

Q: But what if a salary offer comes in lower than you want. What do you say?

A: You could say, "I'm really excited about this offer." Always start off with the enthusiasm, stressing that. "I'm really delighted at the prospect of coming on board and working with you here. That said I'm a little concerned or surprised about the size of the initial offer." With that, you are expressing an expectation that the offer is in fact negotiable. I don't think you want to go in and say, "Can this be negotiated?" Instead, express that "I have this concern, based on my analysis of the market."

Make sure before you have the conversation that you're aware of the market - and you can express your unique value-added. "Based on X years in the industry, I was hoping for X additional dollars."

What's important here is to have an aspirational value - what your goal or target is - and base it on objective criteria. It's important to express your goal. If they're giving you an offer, you're already at the point where they want you. It's about reminding them and highlighting, "This is a great opportunity for both of us here." Make commitments about what you expect to do, maybe how you'll be helping their division's bottom line, or other ways you're going to be contributing.

Q: So much work these days is project-based. If you're talking about a job and you're hearing, "This is the work, here is the fee," are the negotiating rules different?

A: The same holds true that it's important to do your homework. Half of the work in a negotiation takes place before you get to the bargaining table, which means finding out what market rates are. There will be multiple reference points in the marketplace. What you want to do is focus on the optimistic, yet realistic, numbers. Be prepared to have a conversation. "Is there any room for movement on this? I'd really like to take this job, however my understanding of the going rate is that it's X."

When you're doing your homework, there's lots of information in professional organizations and on the Internet. But also from back channels and your social network. That's why it's important to develop a diverse network of people to get information from.

It's important not to be arrogant or demanding, but to stand up for yourself and have the conversation. If they say, "This is all we can offer you," and if you're prepared to accept it, you might want to think about setting expectations down the road. "OK, I understand the constraints you're under and that this is a freelance opportunity. Perhaps after I demonstrate my ability to deliver extremely high quality work to you, we can revisit this down the road in six months." So you're laying the groundwork for future negotiation.

Q: So given the economy, you have to be extra prepared?

A: You need to be more on your toes, and you need to think about it more deliberately, broadly and flexibly. What are your accomplishments, what responsibilities have you assumed in the past? What are the valuable attributes you bring to the table?

There's a lot of psychology in negotiating. You always have to put yourself into the shoes of other people. Make it so they want to say yes to you. And give yourself the pep talk; remind yourself what it is you're asking for. Practice, in front of the mirror or with a friend, so you can ask confidently and you can work out the right way of saying what you want to say.

Q: Many people worry about sounding too demanding. How can you avoid this?

A: One strategy for striking that balance between assertive and demanding is to create a menu of options. When you're discussing the terms, imagine one scenario where there's a signing bonus. In another, you get a salary increase. In another, there's going to be a resource dedicated to your ongoing education and training. So it's not only what you're taking home in your paycheck today, but also how you're setting the stage for an upward career trajectory.

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