What was your best moment when negotiating a salary?

What was your best moment when negotiating a salary?- StartupStorey Entrepreneurship Guide

We previously wrote an article on How to Ace Job Interviews like a Pro and we decided to elicit responses on the best moments people had when negotiating their salaries.

 

Jake – “Negotiation Theory worked the best for me.”

I smiled.

“Yes- I think that number is reasonable, given my skill set and what you need.”

The next one who speaks loses- and I didn’t say a word.

Andy, the CEO thought for a minute. He had asked me three times if I was willing to come off (come down) on my salary demand, and I wasn’t willing to.

There were a few reasons why:

High-risk position

The CEO was “creating a position for me”, which meant that I wasn’t replacing an existing job position. As I find out later, the CEO had come up with this new position idea after meeting me- which made it that much more risky.

There was a higher risk that this job might not work out, and I wanted to be paid for taking that risk.

 

Others in similar roles

I was interviewing in 1997 for a role selling a corporate retirement product to corporations. The product was complex and had a long sales cycle.

When I interviewed, I noticed that the people in similar roles were all older than me, and all well-qualified. If the firm had money to pay them, they ought to have the resources to pay me.

 

Willing to walk away

Most importantly, I had other options and was willing to walk away.

This attitude is critical for both salary negotiations and if you’re pricing work as a self-employed person (as I am now). Everyone needs to belief that they can find another job or another client. You need the willingness to say: “I appreciate it, but I can’t meet your needs.”

I’ve used that phrase a lot over the years- feels good to say it every once in awhile.

Ironically, my son has NO hesitation telling people no when the money isn’t right. He’s a recent college graduate and a freelance film and video producer.

That skill will serve him well as a self-employed person.

What was your best moment when negotiating a salary?- StartupStorey Entrepreneurship Guide

Using Negotiation Theory

I think everyone can benefit from an overview of negotiation theory. For starters, you need to keep in mind that, in a negotiation, both sides are giving consideration.

In your business law class, you learned that consideration refers to giving something up. In a job offer, the employer gives up salary and benefits, in exchange for the worker’s time and effort.

 

Here are some negotiation terms you should know:

Reserve price (reservation price)

The minimum dollar amount that a party is willing to accept.

Think about the owner of a painting at an auction who won’t take less than $10,000 for the artwork. In my salary negotiation, I had a minimum salary that I was willing to accept.

Small pie bias

Many people in salary negotiations underestimate the size of the bargaining zone– the range of salary that both parties are willing to accept. The concept is referred to a small pie bias. Is it a $5,000 range , or $15,000?

If you bring value to the firm, it’s probably

Zone of possible agreement (ZOPA)

What need to find is the zone of possible agreement, or the range within which a deal can be reached. Think about a company sale, for example. The seller says: “I can’t accept less than $15 million”, but buyer doesn’t want to pay more than $13 million. Maybe the parties can tweak the negotiation and come up with a price range between $14 and $14.5 million.

What was your best moment when negotiating a salary?- StartupStorey Entrepreneurship Guide

Mark – When I Nearly Tripled My Salary In 5 Minutes

Back in 2013 I was at a consulting firm as a junior consultant. Recently my boss, the creative director, had quit before a massive client presentation.

The company we were pitching to was a $100B+ corporation and because I worked so closely with my old boss, I had a ton of knowledge critical to closing the deal.

My managing director called me the night before to see if I could fill in as a creative director and lead the pitch and I agreed.

Once I secured the client, I had basically promoted myself about 4 positions to the director level. The company acknowledged this as well, however, there was one small thing we weren’t talking about during all this: money.

Everyone was happy about us closing this massive deal however, they forgot that I was still getting paid as a junior consultant even though I’d secured a massive revenue bump for the business and had a ton more responsibility (and much longer hours).

The following day I walked into my managing director’s office and asked if she had a few minutes. She asked me what was up, and after closing the door, I let her know that I would like an increase in salary due to the recent change in events.

She looked at me and said we don’t do that until December because we are on an annual review cycle.

We are at the end of January at this point, so I tell her I’m not going to lose essentially a whole year’s worth of income due to some stupid rule about salary cycles. I brought in a large cash inflow so I wanted my rightful share; I was asking for a fair amount!

So we go back and forth and she finally cracks and says she’ll give me $5k more. I laughed so hard I almost cried. It was insulting to get offered such a low amount.

I told her that if it was going to be so low, to not even bother. I gave her my number: Triple what I was making at the time. I knew it was a bit bold, but I wanted to test the waters and see what we can get.

Now just so you understand, I wasn’t being unreasonable. I was asking for slightly above market rate for what a creative director in the Chicago area makes. She told me I was insane and that never in a million years would they approve that.

I let her know that I’m putting in my two weeks right now if we can’t get this to work out. I’m willing to bend a little but I’m not making an unreasonable demand and this new work would basically require me to work about 75 hours a week.

I was giving up personal time, working long hours at a computer which was terrible for my health and putting the needs of the business far ahead of my own. A fair compensation was in order.

She asked me to come back to her at the end of the day. I left her room. I stayed late that day and once everyone else had left, knocked on her door. She waved me in and without saying a word slid a contract and a pen over in my direction.

I glanced over the terms of the contract and noticed I’d been offered a 2.92x increase in salary. As she notices me staring at the number, she bursts out and says that’s all I could get. I know it’s a bit less than what you wanted but it’s all I can get and we need you onboard.

Thankfully we signed the contract that evening and celebrated with a glass of wine. She told me she admired that I stood my ground and that she was worried earlier about placing me in tough negotiating situations with clients because I was so young, but now felt a little more comfortable that I was mature enough to handle these sorts of things.

I went on to create a ton more revenue for the business and what they paid me was a drop in the bucket for how much I brought in eventually. It all worked out at the end.

So that’s the story about how I basically nearly tripled my annual salary over a 5 minute negotiation.

What was your best moment when negotiating a salary?- StartupStorey Entrepreneurship Guide

Sullivan – Not me but a very close family friend in about 2003.

He was negotiating a salary for a new job in Germany. The salary was to be paid in Euros and he had to relocate there.

The exchange rate at the time was approximately £1 : €1.55.

He was chosen for the job and they really wanted him to join.

It got down to the salary discussions.

They made an offer of €100,000.

He told them that was ridiculous. He wanted at least €150,000, which was more or less £100,000 in the UK at the time.

He couldn’t understand why they were so surprised by his request as that was not hugely above the going rate for his type of role.

They discussed briefly between themselves and told him that they would accept his request.

He left and was happy. He got the salary he wanted and went back home.

They then sent him the final offer, in written form, to his house. When he opened the letter he was speechless.

The salary offer was £150,000.

They had both been discussing salaries in the other person’s currency during the interview process. He was referring to Euros and they were talking in Sterling.

Needless to say, he quickly replied telling them that he would accept his new role, he moved to Germany and stayed there for about 8 years if I remember correctly.

Best mistake one can make when negotiating!

Karen – “There’s something about hands.”

In 1996 the company I worked for was up for sale. This was disappointing for me because they were a great company to work for and I loved my job.

Just because my company was up for sale didn’t mean I would lose my job but it did create enough uncertainty for me to make sure I got myself prepared.

With this in mind I applied for some jobs, mainly for interview practice, not to seriously change jobs. The funny thing about doing this is just how relaxed you are during the whole process. There is absolutely no pressure to perform and this in turn helps you perform better. How ironic!

One job I applied for was with 3M through a recruitment firm. However I received from them a “Sorry, we have other more suited applicant’s” letter. Oh well, it was just for practice anyway.

But then I received a phone call asking me to attend an interview late one Friday afternoon at Brisbane airport, in a serviced office. Ok, so off I go to the airport.

I am kept waiting for 45 minutes and I seriously considered leaving, I was somewhat annoyed. Remember, I am only there for practice, not the real deal.

Finally I am summoned in for the interview. Before I sit down I tossed the letter, I had received, on the desk in front of the interviewer and said, “Obviously someone pulled out. You needed to fill your interview quota and I was the last one rejected.”

He stammered and stuttered and said there was some sort of mix up as I was always going to be interviewed. Yeah right.

I did well during the interview and was asked to go to 3M’s Brisbane office for a second interview with the General Manager and the State Manager. It was during this interview that things really got interesting.

Because I was so relaxed and because I have a sense of humour, I answered a question, I thought, as a bit funny. I was so very wrong. The GM held up the 3M product catalogue. Flicking through some pages he asked me, “What do you see?”

I would have thought that the correct answer would be a comment about consistent branding, or the label colours or the huge and diverse range of products.

But as I was having fun and because every product was held by someone’s hands. I simply said, “Hands”

The next 30 seconds are forever etched in my mind as bizarre and scary. I swear the GM was going to have a heart attack. He just kept loudly and excitedly repeating, “Yes, yes, yes! It’s all about hands! Hands! Yes, yes, yes!”

He went red in the face and just kept on going with yes, yes yes. I was dumbfounded. His reaction was way over the top.

He was very close to retirement age and I bet he’d asked that question at every interview he had done for 3M and I was the first one ever to say hands. His reaction is hard to accurately write about but just know it was over the top with excitement.

The rest of the interview I simply don’t remember. It’s gone. But I must have done well because the original recruitment guy phoned me and asked me how it went.

I said, “Ok I guess.”

“They loved you” was his reply.

Oh crap. It is at this point that I first realised I was going to be offered the job.

“Oh, that’s good I guess.” My underwhelming response was obvious.

“They want to offer you $xyz to work for them.”

“Really?” That was honestly all I said. But it was with very little enthusiasm. I am clearly an idiot because I had not thought about this possibility at all and I just didn’t know what to do or say. I was caught by surprise.

“I’ll call you back.” he said

When he rang back they had upped their offer.

Surprised and still in shock, I said, “Oh, ok.” Again with no enthusiasm.

“You don’t sound very excited.”

“I guess I wasn’t expecting to be successful.” Still very lackadaisical.

“I’ll call you back shortly.”

He came back with an even higher package. With this I told him I would think about it over the weekend.

I did take the job and it is still my most successful salary negotiation ever and I was not even trying!

By the way: Every interview I have done since, I have, at some point, answered with “hands”, and then sat back waiting for the same reaction. It has never elicited the same response though.

What was your best moment when negotiating a salary?- StartupStorey Entrepreneurship Guide

Elaine – “Security instead of Salary”

My best moment negotiating a salary had almost nothing to do with the salary. It had to do with security.

It was the mid-1990s and I was working a temp job essentially as a database administrator for a rapidly expanding company.

They were on a buying spree, purchasing smaller companies in the same business and the database I was working on was an attempt to integrate all of them together. The data was a mess, with no real rules for formatting or structure of the survey responses, so I spent a lot of time dealing with data quality.

But the other major time element was the sharing of the database information. The company wanted CDs produced periodically, and then mailed out to all of the facilities.

Within the first month in this temp job, I went into my supervisor’s office and explained to her that this project should be web-based. Then I explained to her what “the web” was, and why this information would be MUCH more useful if it was web based.

She seemed to understand, but she got back to me at the end of the week telling me that she had discussed it with corporate, and they’d decided that too many of the facilities were too remote to have reliable high-speed Internet access, so they were going to stick with the CDs.

Fast forward a few months, and my fiancée and I decided to relocate. I gave my boss notice and they went to the temp agency to find a replacement.

Two days before I was set to move, the boss called me into her office and said that they wanted me to keep working on the project, even after I moved.

The temp agency didn’t have an office where I was relocating, so they would just hire me directly, on a contract basis.

The contract offer they gave me was fair, in line monetarily with what I had been making via the temp agency, including the appropriate bump to cover the additional self-employment taxes.

BUT, I said that I would only agree to the contract if it was for six months AND I was guaranteed to be paid for a minimum of 35 hours per week, whether or not they had work for me to do. My boss didn’t even blink – she had the clause added to the contract and we both signed it.

I moved from Cincinnati to Kansas City over Thanksgiving weekend 1997. In January 1998, the corporate office canceled the database project I was working on, replacing it with the web-based database I’d been recommending all along.

Development was outsourced. So from January 15 – the end of May, I got paid for 35 hours of work per week, mostly spent planning my wedding.

 

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