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Negotiating a job offer
Old 12-18-2008, 10:00 AM   #1
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Negotiating a job offer

DH had an interview at a mega corp last week and he was contacted by their HR earlier this week to let him know an offer was on the way. My question is how do we negotiate once we receive the offer? DH has been a consultant for the past 13 years, so moving to the dark side of permanent employment is a newbie for us.

Things we do know from those on the inside is if you appear to eager, ie. call the HR person asking where your offer is, they take it you are desperate and will lower what they intend to give you.

We are in the position of not really caring either way, which we feel gives us control of the situation. The things we do know is there is a good chance that DH will get laid off from his current position in January and mega corp he currently works for is discreetly putting people off now. However, even though we don't really give a toss, we don't want to burn any bridges or be offensive. We particularly don't want to appear to be too greedy and grasping either, even though I am sure that the HR person will think we are as any offer is likely to be more than they earn. What kind of wording do you use when you ask for more? Do you have to give reasons and if so how would you phrase it?
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Old 12-18-2008, 10:11 AM   #2
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First compute what your salary would have been if he wasn't a contractor:
rate minus benefits
second - compare offer to that
third - work on counter offer on salary
fourth - think about other non salary money - car allowance, annual bonus, 6 month increase of x%

Fifth - phrase your offer properly - think as the HR rep as an intermediary not the final decision maker - such as - can management find it in there budget for X... not can "you" give me
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Old 12-18-2008, 10:53 AM   #3
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I haven't tried it but, unless hollywood has been lying to me, shouting"SHOW ME THE MONEY!" will get you whatever you want.
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Old 12-18-2008, 11:03 AM   #4
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Be patient. That is, consider the offer when it arrives.

Counteroffer for what is fair in this situation (consultant to salaried employee, consultant bringing additional value to the firm).

Be professional in your counteroffer (as you say you don't give a toss), and if the offer is too far from what you feel DH is worth, politely decline with that as the excuse. If they really want him, they might have other options to offer.

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Old 12-18-2008, 11:19 AM   #5
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Just a few things to remember.... First off... most (but not all) HR people are not terribly bright. Most that I have dealt with over the years respond really well to almost any form of flattery. Make them feel like they are important... that they are in control, etc. Most that I have seen would rather just not hire you if you try to seriously negotiate a salary. For some reason, people that like to be in control of others tend to gravitate to the HR field.

This is what I would do in terms of salary. They will of course want to know how much you are making now. You of course do not want to tell them that. It gives them a way unfair advantage in negotiating with you. They probably have a mandate about not going over X% more than you make now. If this is a contract position from a full time position, maybe 20% max. Give yourself an imaginary raise in your head (about 10%), and then tell them you are looking for around 10% above that. Why? Because then they feel like they are winning... getting you for a bargain... got one over on you etc. I have seen lots of HR departments that operate just that way.

Amd lastly... never EVER accept the first offer. I have never seen a situation where if you decline the fist offer and go for more... they would say... "Ok... have a nice day... and it is over". There will almost always be a counter offer, or at the least a "I am sorry that is the best we can do", and then you can accept or reject the offer. This is your life and your career. It is neither greedy, nor wrong for you to attampt to get the most money for your time possible. After all... our time is truely the most valueble thing that we own.
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Old 12-18-2008, 11:26 AM   #6
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A contractor typically receives twice what the same person on the payroll receives for the job. Base pay + employer taxes on payroll + benefits = contractor rate. Often an employer feels guilty offering half of what a person received as a contractor so the offer may be better than that.

Armor99, the HR person is the intermederiaty between the applicant and the hiring manager. Of course, be nice to the HR person because you want HR to advocate for you. The manager is the deciding official. Your approach is not what I would recommend in this market unless the applicant brings hard to replace skills.
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Old 12-18-2008, 11:40 AM   #7
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Ask for the salary range of the position. When I used to work for a major telcom company all positions were classified and had salary ranges (some rediculous like 55-100K). Then shoot for a firm midpoint in the range.
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Old 12-18-2008, 12:52 PM   #8
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First off, my gut tells me that his offer is going to be much less than what he makes as a contractor/consultant. Probably around 40% (that's what I heard costs the company to have a full time employee vs. a contractor). Paid vacation, medical, short term disability(I am not sure about other companies, but our company covers the difference), severance, 401K matching, pension, etc.

This is just in the IT field, but I've never heard of anyone countering their salary set in their offer letter. The only thing I've seen in the past (only during the boom.. I am in Silicon Valley) is that they raised the amount of sign-on bonus, or gave extra paid vacation and that was only after the applicants mentioned that they already had a job offer from another company with better pay. The reasoning behind it is that they could not give you more money for the position you were going for due to the previously established pay grades set by the company. The bigger the company, the less flexible, in this regard.

Unless I already have another job offer from another company with better pay, I wouldn't even try to get a better pay or any extras (since I have nothing to leverage with). And right now, with this economy, I wouldn't be surprised that HR (and more importantly your future boss) may feel a bit cocky since they may feel they could get qualified people fairly easily.

If your DH feels there is a very good chance that his position is going to be cut in January, I would probably just take the new job offer. If the pay is not great, I would keep on looking for a better paying job.

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Old 12-18-2008, 06:03 PM   #9
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Frankly it is unusual for a new hire to be paid at or above midpoint, most often offers are made at 25%. Salaries around the midpoint are those paid to fully qualified, experienced, folks for that job. Salaries are managed TO midpoint, % increases above midpoint are smaller.

I agree, negotiate extra paid time off if the employer processes permit that. PTO doesn't directly hit the manager's budget.

If there is any chance that the hiring company will run a rif in the next 6 months she should keep her job search contacts fresh. Don't be duplicitous (employers hate that) but she should send thank-you's to other employers who interviewed her. In this market friends are important.
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Old 12-18-2008, 06:26 PM   #10
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With respect to the retirement plan: New hires are often not eligible to contribute to the 401(k) until a certain amount of time has passed. In essence, you are penalized. So you need to make that up by getting a hiring bonus. For example, if you won't be eligible or get a company match until July, you can either (a) make sure you can max out $20,500 from July-Dec or (b) get a bonus to cover the extra taxes you would pay by not contributing to the 401(k) in the first half.
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Old 12-18-2008, 09:05 PM   #11
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My dad use to say 'if you get what you want for the price you want to pay, you got a good deal, no matter what someone else might pay'

Seems like the same thing applies here. Companies normally pay contractors more, because of benefits and no SSN. Seems like you all need to decide what would be a good deal for you. I have told employers, when the question of pay comes up 'You will offer me what I am worth, or someone else will". It has worked for me.
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Old 02-13-2009, 02:16 PM   #12
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An update to my post.

After a nearly 2 month wait DH did receive the offer which he has accepted. Given the market and the hiring freezes that seem to be prevalent at all tech companies, the offer was very generous and there was absolutely no need to ask for anything more. We are fortunate in that he is getting an excellent signing bonus as well as a salary which is likely at the top end of the range for his position. The company where he is currently a consultant made him an offer to roll over, however lesser salary, no signing bonus and all staff have been told no pay rises or bonus this year. In the end it was a no brainer as to which offer to accept, which worked out well as the new company was his preferred option.

So by the end of this month we are relocating to Silicon Valley after a quick trip to Australia to sort out our visas.

We are looking forward to the move, as having lived in SV we are probably exceptions in that we prefer that area to San Diego.
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Old 02-13-2009, 02:23 PM   #13
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Congrats!
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Old 02-13-2009, 04:19 PM   #14
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Congratulations indeed!
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Old 02-13-2009, 04:21 PM   #15
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Congratulations! Now rub some of the pixie dust on my wife.
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Old 02-13-2009, 04:31 PM   #16
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Congrats!

Sadly, we are going to start an Ex ER subheading. I know a lot of ERers that are looking for work.
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Old 02-13-2009, 05:05 PM   #17
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Congratulations! Now rub some of the pixie dust on my wife.
What's she look like?

I couldn't help that. It was too easy.
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Old 02-13-2009, 05:12 PM   #18
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Congrats!

Sadly, we are going to start an Ex ER subheading. I know a lot of ERers that are looking for work.
Where I'm at, we have 20% of my department on "overhead" which means not being billed to a client. That should make me worry but my boss seems to think things will pick up soon. He listed all sorts of jobs that are supposed to start in the next month at a department meeting this week.

The project I'm on just had over half of the process engineers moved back to the "overhead" column but I inherited all of their work. I'm going to be forced to work 50+ hour weeks for the indefinite future. I do get paid overtime so it doesn't seem to make any sense. The client, however, decided who they liked and asked for the others to be reassigned. I am the consumate wh*re when it comes to dealing with clients so they always like me.

I'm FI even with the market tank. I like to think the only reason I'm still working is my FIL but I may be one of those rats that like the treadmill.
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Old 02-13-2009, 05:21 PM   #19
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I'm FI even with the market tank. I like to think the only reason I'm still working is my FIL but I may be one of those rats that like the treadmill.
Ah. I thought you were just hanging on hoping for severance pay...
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

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Old 02-14-2009, 07:11 AM   #20
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Ah. I thought you were just hanging on hoping for severance pay...
Actually, I am hoping for the 6 months of severance pay provided by the State of Texas. It might even get extended before the recession is done. I think it's about $400/month. I can pretend to look for a j*b for that kind of money. My employer doesn't give out severance.

My comment from yesterday reflected my anguish and getting all the work from the engineers moved off the project. The work will still "stay on schedule" but I really doubt it.
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