Most of your job hunting should be a win-win process - you are seeking a good employer in your chosen field, while recruiters are seeking good candidates who will fulfill functions within their organisations. A good match benefits both.
This is not true when it comes to negotiating salaries. Salary negotiation is where your goals conflict directly - your goal should be to get the best salary possible, one that captures a fair proportion of the value you can deliver. The recruiter's goal is to recruit you as cheaply as possible without you feeling exploited.
You can just 'roll over' and accept what you are offered or a small increment on what you are already being paid. If you do this, then you lose. For example, if you do not negotiate you may lose $5,000 a year for 5 years - think of what you could do with $25,000!
By doing a little research and playing the negotiation game, you may find that you can substantially increase the salary you are paid.
Putting Yourself in the Best Position
An important part of the negotiation occurs before the negotiation starts.
Firstly, it is useful to have other recruiters interested in you - this gives you the power to walk away if the recruiter's offer is too low. If you have been active and organised in your job hunt, you should have plenty of interviews arranged - if you do, then make sure that the recruiter you are negotiating with knows. This will put pressure on him or her to make a good offer.
Remember also that recruitment is an uncertain and judgment-based activity. Companies often do not know whether they have made the correct decision until the new recruit has been doing the job for several months. Where potential recruiters can see that other people are interested in you, this gives them confidence that you must be a good candidate (and that you are therefore worth more).
Secondly, make sure that you research the sort of salaries that are on offer in the industry. Look at the employment section of magazines and visit sites like JobSearch - these help you to understand the salary ranges that are offered for the job, and help you to understand what good and bad offers are. If you can, research the salaries of people at the next level above you and at the next level below you. It will cause you and the employer real problems if you are paid more than your boss. Similarly, you will not be pleased if you find that you are paid less than people working for you!
Thirdly, think through how rare your skills are, and how many people have the skills the recruiter's needs - the more uniquely you meet these needs, the more power you have in the negotiation.
Finally, know your BATNA before you go in - BATNA is a negotiator's term for Best Alternative To a Negotiated Agreement. Think through what your alternatives are. You could, for example, stay in your current job if appropriate. You could accept another offer. You could keep on looking for another job. Knowing your BATNA means you know what the minimum amount that you are prepared to accept.
If you discuss salary before the recruiter knows what you can offer his or her organisation, then you have lost the negotiation - all you will get is either the standard rate for the job or what you got at your last job. The best time to talk about salary is once you know that the recruiter wants you, and once you have a good idea of what you can do for the recruiter.
When you start to discuss salary, try to get the recruiter to quote a figure first - it may be higher than you expect, in which case you can try to move it even higher. If the offer is too low, then use the leverage of your research into industry salaries, your knowledge of your capabilities and your knowledge of your worth to the organisation to move it higher. Remember that experienced recruiters know that this is a game.
While doing this, bear in mind the upper limits you have researched for the job. You will be very fortunate if you negotiate beyond these and will be vulnerable to being laid off in hard times if you are not a truly exceptional performer. The recruiter will lose interest in you if you price yourself too high.
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