It is more challenging to negotiate a salary and total compensation during an economic downturn.
When the economy and job market are hot, employees have the upper hand. During the Great Resignation, companies struggled to find top talent and were willing to offer lush compensation packages to recruit, onboard and retain workers.
With that in mind, be prepared for a tougher salary negotiation during a white-collar recession. Workers in tech, Wall Street, real estate and other sectors were hit hard by inflation, high interest rates and subsequent layoffs. With more than 125,000 tech workers laid off, according to Layoffs.fyi, it’s reasonable to expect that there will be intense competition to get a job offer. If you push too hard in the negotiation process, it is easy for the company to move on to the next applicant who is more flexible regarding their pay package.
To prepare for the pressure of haggling over compensation, do a lot of homework about what’s happening in your field. Ask questions about the corporate title, vacation days, health benefits and work styles. Prioritize what’s important, and don’t take anything personally.
Do A Lot Of Research
If you haven’t searched for a new job and gone through the interview process in a while, take time to find out what’s going on. If some of your colleagues recently switched jobs, ask them about the process and what salary ranges were discussed.
In addition to pay, you want to learn about the health benefit packages, the appropriate corporate title, projected bonus, 401(k) plans and stock options. As there is a push by many companies to return to the office, check to see what their predominant work style is. Look at sites that offer compensation for various roles; however, be skeptical. In my experience as a recruiter, the numbers are not always accurate. People who self-report tend to exaggerate how much they earn, and some pay packages are guesstimates.
It’s Going To Be Awkward
If you use the services of a recruiter, they can help make the process much easier. Headhunters specializing in a few select sectors tend to know the companies, human resources personnel and hiring managers. They also have long-standing relationships with the hiring managers. The recruiters with insider knowledge have a solid understanding of the title breakdown and pay structures. Instead of having to haggle your own salary negotiations, your recruiter can do it for you—making your life easier and less stressful.
If you are going it alone, it can be awkward and uncomfortable. You’ll be negotiating against the people with whom you will be working with. The challenge is that you’ll be worried about pushing too hard and turning them off. On the other hand, if you don’t assert yourself, you’ll leave money on the table.
Both Sides Win
In a difficult market, taking a strong-arm position may backfire. Family, friends and co-workers will tell you to push for everything. It’s easy for them to say, as it’s not their livelihood. In brokering thousands of placements, I’ve learned that you have to make both sides feel somewhat happy. Most people think they must beat the other side and get everything they want. That generally doesn’t happen. Usually, the result is that you get around 70% to 80% of what you want. The same holds true for the company. The best negotiations are when everyone walks away feeling satisfied.
Here’s A Negotiating Hack
Not all companies handle salary negotiations the same way. Some companies will bypass the bargaining and say, “Here’s our best offer.” Other firms may make a lowball offer to test you. It is sad to say that these companies prey on your vulnerability and try to get you aboard with less than you deserve. With the new pay transparency laws, many job descriptions share the salary bands, making it a little easier to know if you’re getting cheated.
Don’t immediately ask for a number that is wildly out of range, as it will backfire. A more effective method is asking for about 20% more than you really want, so there is room for negotiations. You need to have evidence to support your demands. Additionally, you should continue to sell yourself by reminding the company why you are the best candidate, including your standout attributes, skills, education and relevant experience. It’s acceptable practice to negotiate and make a counteroffer. If you can’t get the compensation you desire, you can ask for more vacation time, remote work, stock options or a lofty corporate title. Avoid taking anything personally, which is easier said than done. You should put aside your emotions and focus on getting what you deserve.
Todd Dybas, an editor at LinkedIn, warns job seekers about over-negotiating. Dybas wrote in a LinkedIn post, “The line between negotiating for a better package and overdoing it is thin.” He added, “Job seekers want to maximize offers while not stoking irritation in their prospective employer.”
Dybas pointed to Salary Negotiator founder Brandon Bramley’s advice on the three negotiation tactics that “may backfire,” which include “starting too high with your request, being too forceful with a take-it-or-leave-it approach and shifting out of a friendly tone.”
What To Do After Accepting The Offer
After negotiations are over, there are a couple of things left to do. Carefully review the offer letter. You want to ensure that everything you’ve discussed is in writing. Double-check the salary, bonuses and stock options, personal time off, vacation days, corporate titles and the hybrid, in-office or remote work schedule. Look for any potential deal-breakers, such as a non-compete clause, garden leave or requirement to pay back upfront bonuses.
It will be unpleasant, but you must tell your current boss that you’re resigning. To cushion the blow, leave on a positive note. Tell them, “I greatly appreciate everything you’ve done for me. I have learned so much under your tutelage and regard you as a mentor and friend.” Be polite by offering to help pitch in with the extra work during your notice period. Also, let your supervisor and team know that you’ll be available to answer any questions and help even though you’ve moved on.