This is a guest article by Michael Brooks.
The final piece to landing the job of your dreams is to learn how to ask for – and get – the kind of salary or compensation package you really deserve. And what we’re talking about here is learning how to negotiate how you are compensated. What is so interesting about this phase of the interview process is that most people don’t even know (or attempt) to negotiate their comp plans. Instead, they think that what they are offered is what they have to accept. And that is not always the case.
The reason for this is because it is very hard for companies to find good people to hire. Just think about how many resumes the Hiring Manager receives (hundreds for a sales position), and think about how many of those are no good (for one or many reasons). Again, 80 – 90% of the resumes a company receives are not qualified for the position.
Next, think about all the interviews a hiring manager has to deal with. First, anywhere between 20 to 30% of interviews don’t even show up! No calls of explanation – just a no-show. Next, of the people that do show up, many of them are disqualified in person for one reason or another.
And then think about how excited the hiring manager is to finally meet you. First, your cover letter and resume put you at the top of the list. Assuming that you have taken some time to write out sample cover letters, and have invested the time to customize your resume to the job(s) you want, you have no doubt landed interviews with the kinds of companies that can further your career. If you have interviewed well – in other words, if you carefully listened to each question the hiring manager asked, and then responded succinctly and on point (without over talking), and you were upbeat and confident – then you probably have several offers from competing companies.
The hiring manager is praying that you are even half as good as your resume, and if you are, then you are going to get an offer. And after you do, the hiring manager will be praying again that you accept it. This will save her/him all the time of searching through and screening unqualified applicants again.
So once the hiring manager has met with you, and you aced the interview, this is your best chance to begin negotiating for either a higher salary, a better comp plan, or both – or more! There are several areas you can negotiate and they are listed below. Be confident, recognize that you hold all the cards here and that all they can say is no. In fact, in many cases, they will make you a counter offer which means you still win!
#1: As for a sign-on bonus. According to the Society for Human Resource Management, more than two-thirds of companies have trouble recruiting full time talent. And because companies have trouble finding qualified candidates, once they find one, they will often go out of their way to land them. In fact, according to WorldatWork, 76% of all companies now offer sign-on bonuses. And they are not just for CEO’s or other executives either.
The way to ask for a sign-on bonus is pretty straight forward. After the hiring manager has laid out the compensation package, if no sign-on bonus is offered, you simply ask (in an assumptive way):
“And what type of sign-on bonus do you offer?” And then sit quietly and let them talk.
As you noticed, I said to ask for it in an assumptive way, not ask: “Do you offer a sign-on bonus?” This is important. Asking in an assumptive way tells them this is something you expect or perhaps might have been offered from other companies.
If they say there isn’t a sign-on bonus, then you can calmly come back with,
“I see. Well there are other opportunities I’m meeting with (or have met with), and if all things are equal, one of the deciding factors for me will be a sign on bonus. So let me get back with you after I’ve completed my interviews.”
If they still aren’t willing to at least see if there is a bonus, then just leave cheerfully and tell them you will be in touch with them. Believe me, if you made as good of an impression as your resume and cover letter did, then that hiring manger is going to go to the powers that be and talk about what they can offer you as a sign-on bonus.
If you decide – even if they don’t offer you a bonus – to take a job with that company, then you will have set them up for the next discussion which is to receive more pay.
#2: Ask for regular salary adjustments. This is an area where that sales reps (and other employees) seldom think about, but it can make a huge difference in your overall earning ability. For example, a Salary Adjustment (or raise) of just $10,000 a year by the time you are 45 years old, can mean an additional $232,000 in life time earnings. That’s big and can count a lot towards your retirement egg.
There are two ways to go about this. One is to ask for an annual salary review and the other is to ask for a salary increase based on performance – good for sales compensation packages such as commission sales. Let’s take them one at a time:
Asking for a salary adjustment can be based on either how you are compensated in proportion to others who have similar positions in similar companies, or a salary adjustment can be tied to an annual performance review. Either way, you should be prepared for the review by knowing what other positions are currently paying or/and by having a documented list of achievements or contributions you have made throughout the year.
During these annual reviews (or you can negotiate a semi-annual review), make sure you are able to justify why you deserve a salary adjustment, and help them realize your value. Be prepared to quantify your contributions and show how you performed in a department or on a project, in terms of time line, budget and overall effectiveness. Also, see if you can show how your contribution impacted the bottom line.
If you are in sales (and confident in your sales ability), then tie your salary adjustment to an increase in monthly commission payout. Make this a tiered increase so that the more you sell, the more you are compensated. One tip here is to always make your next level payouts retro-active on your total sales for the month. An example would be if you earn 10% on sales volume up to $100,000, then ask for 13% (or more!) once you hit $101,000. But make it so that you earn that 13% on the entire sales volume, not just the amount over.
By the way, if you are asking for an increase in sales commission based on performance, you can also request a salary adjustment as well. The two are not mutually exclusive!
#3: The other way to earn more money when you sign on with a new company is to ask for a more senior position. This is something people rarely do, but this is a great way to instantly elevate your career. I can’t tell you how many times I’ve heard people tell me they went for a job as a member of a sales team and ended up in a supervisory role. I’ve also heard people go in for a marketing support role and were hired on as the marketing manager.
The reason for this is the same as before: Good help is hard to find! If you think hiring a sales rep is hard, you should hear how hard it is for companies to find good managers. And if you’ve been in sales a while (or any other field), then you probably have been managed and know a lot about the job description already. Also if you’ve been helping out in your department as you should be, then you probably already have some of the skills an employer is looking for.
You now have three different ways of earning more money with a company than you are probably used to getting. Don’t be shy about asking for it; remember: nothing ventured, nothing gained. If they say no, you haven’t lost anything, but if they say yes, you’ll have gained a lot!