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Salary Negotiation - I've never done it.
Old 02-10-2007, 11:57 PM   #1
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Salary Negotiation - I've never done it.

A contractor wants me on board for a contract they are bidding on. They believe having me as program manager on the contract will help them win it. I believe theyre right. But Ive been in the military my entire adult life and have never negotiated a salary. Obviously Id rather know their threshold than have them know mine. Any advice on either telling them straight up what I want in terms of compensation or on getting them to tell me what theyre willing to pay?

Heres some details of the situation: I wasnt looking. They got my resume from another outfit Id contacted a couple months ago. That company had some decent positions but nothing that would inspire me to retire right now. I like my present assignment and am in no hurry to leave until I have to. I also have decent potential for promotion a couple years ahead. But if I get a long deployment or bad assignment, having done plenty in the past and now having the choice to retire, I will retire and can do so instead of accepting another bad deal that will of course cease to be true for a couple years if I take a move and get bait-and-switched, or if I accept a promotion.

If I find the right position, its probably better to make the transition on my terms, vice being vulnerable to having events force my hand. I can meet my lifetime financial goals by spending the next four to five years in the military. To give me the same deal (since Id be giving up significant pension increases if I retire) a company would have to pay me a bit over three times what the actual average American joe makes and allow me to live in an area where that figure is over twice what I need to live my present LBYM lifestyle. If anyone offers over that amount, in a decent area, for a decent position, with a decent chance of having it continue for a few years, Im gone.

The company is correct to assume that having me as program manager will make their bid more attractive to the customer. Not only do I have experience in the customer organization but my work there won me a prestigious award. Its even possible that someone evaluating the bids will know me. I know too well that the position will come with many major headaches but the project itself is worthwhile and interesting to me. It would also require a move to an area that Id love to move to (they dont know that).

Last communication, they sent me the details of what the contract will require. Its big; ongoing operations at dozens of locations in the US and a few overseas, each involving from a small handful to a couple dozen people plus a requirement to respond to unplanned popup requirements that Im sure will be a challenge to handle in the timelines required due to the exotic nature of the skills needed.

Now the ball is in my court. Im to call back to say whether or not Im interested. I am.
But no ones mentioned compensation yet. This is embarrassing but I honestly dont know what is realistic in the military we dont negotiate our pay. Ive been told that the first party to mention money loses. They have requested that I not accept any other offer prior to talking it over with them. They want me on board and this thing is a natural extension of what Ive done my entire career. But they dont have the contract yet and Im not retired yet it may come down to chicken or egg cant take the job unless I put in to retire wont put in to retire unless I know Ill be taking the job.
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Re: Salary Negotiation - I've never done it.
Old 02-11-2007, 12:27 AM   #2
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Re: Salary Negotiation - I've never done it.

Average Joe...

You are in one of those pickles people talk about... is this a big company or not Are your skills 'unique'?? What is the average salary of your position.. (you should be able to find many sites with average salaries in different locations)...

It also sounds to me that if they do not get the contract, you are out quickly looking for some other place to work...

Its the one in the hand, two in the bush decision..
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Re: Salary Negotiation - I've never done it.
Old 02-11-2007, 12:42 AM   #3
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Re: Salary Negotiation - I've never done it.

Quote:
Originally Posted by Texas Proud
Average Joe...

You are in one of those pickles people talk about... is this a big company or not Are your skills 'unique'?? What is the average salary of your position.. (you should be able to find many sites with average salaries in different locations)...

It also sounds to me that if they do not get the contract, you are out quickly looking for some other place to work...

Its the one in the hand, two in the bush decision..
Texas,
Yep, one in hand, two in bush. But on the other hand the one in hand could fly off unpredictably too. It's not a big company, but it's connected to one.
Thanks for the suggestion on the avg salary - I sort of had tunnel vision in thinking of this because my skills are unique - the combination of my skills and experience is very unique - however this job is actually more about managing people who employ skills like some of mine for people who do things I have experience doing and managing the company's relationship with the customer - I know there's lot's of that going on - whether the skills involved are unique or not.
If they don't get the contract - my resume is uniquely suited enough for this that I'd bet whoever does get the contract would love to hire me - but then they'd already have a PM and I'd be looking at some lower level job.
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Re: Salary Negotiation - I've never done it.
Old 02-11-2007, 01:11 AM   #4
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Re: Salary Negotiation - I've never done it.

Is it really the case that you'd have to leave your current position before the company finds out if it's awarded the contract? Isn't there any way for you to sign a letter of intent that you will accept the employment contract if the firm is awarded the contract...but if they aren't awarded the contract, then there's no binding obligation for you to work for them (you can still negotiate a position after the project award decision is made).

Simply explain to the company that you "would be interested in considering this offer, but here's the situation I'm in: I don't want to leave my present job (job satisfaction, pension, other benefits, etc.) and then have you not be awarded the contract...so what about the option/letter of intent situation?" I'm sure they could understand your situation. AND, if they're so hot to trot to bring you on board that they'd plead with you to not accept any other offer without talking it over with them, then surely they should be able to sign the agreement that you'd only guarantee working for them (at this time) if they get the contract.

If they don't get the contract, then would you be looking for another job, or would they be able to place you in a job a little bit similar to the job they're hoping to create for you if they land the contract?

Under no circumstances would I let them know you would like living in the new area, nor that you were thinking of leaving your job anyway. Also, you are correct that, usually, "the first party that mentions salary loses". The company is in the driver's seat at the moment, because they know how much you are worth to them, but you have only a vague guess as to what they value your abilities at. If you mention a salary too high, they can easily counter with the 'realistic' salary (but you can't merely say $1 million and sound arrogant). On the other hand, mention a salary too low, and you're forever locked into the lower starting amount. If the company offers a number first, it will likely be somewhat close to what their max salary is that they'd pay you (probably within 25% or so, perhaps?)

So, since they were the ones that initiated contact, I'd simply ask them for a salary range and total benefits package they could offer you, since you have many comparisons to make to your present job versus what you'd have if you leave now (less pension vs new perks). They should at least give you a minimum starting salary or some sort of range, along with the benefits they'd throw at you. If possible, see if they can negotiate the benefits package to benefit both of you (less taxes for you, slightly less taxes for the company and happier employee morale)
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Re: Salary Negotiation - I've never done it.
Old 02-11-2007, 11:22 AM   #5
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Re: Salary Negotiation - I've never done it.

Whoever mentions money first loses. Get them to give you a range of what they expect to pay someone that can do what you do. Having them get you to throw out a number isnt terribly beneficial...they already know what they're going to offer up...its just a matter of seeing if you're expectations are 50% past that, or if you'll go for something less.

Theres always a 10% or more margin between their first offer and what you can get.

Dont just think about pure salary, look for other ways to get compensation. Bonuses, stock options, equity ownership in the company, profit sharing, etc. This stuff is often a lot looser than the paycheck.

And the oddball observation...every guy i've ever given an offer to has negotiated it higher. Not one woman i've offered a job to negotiated the salary. Only one person ever refused my offer...a guy that was playing me against another company and we both ended up turning him down after the second week of screwing around.
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Re: Salary Negotiation - I've never done it.
Old 02-11-2007, 03:59 PM   #6
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Re: Salary Negotiation - I've never done it.

Quote:
Originally Posted by Average Joe
But they dont have the contract yet and Im not retired yet it may come down to chicken or egg cant take the job unless I put in to retire wont put in to retire unless I know Ill be taking the job.
Well, it's finally happened. You have a reason to question why you're still on active duty, even if the grass over that fence does look mighty green. Hopefully it's not over a leaking septic tank.

Before you negotiate the salary, how about another question: Why do you still want to stay on active duty? This is where you'd list all the advantages of your current assignment, attempt to put a dollar figure on them, and figure out if you're willing to risk losing them for a job offer that won't materialize unless they win the contract. Your prospective employer doesn't need to know that your next promotion isn't a lock.

I'd think that the "worst case" would be retiring only to see your new employer lose the contract. You end up with a ~$45K COLA pension (is your pay boosted by the Apr 2007 40-year pay table?), cheap healthcare, and a lot of free time to spend with your family. Not such a bad situation to end up in. Would you have to move? What about the kid's schools? What's the backup plan for housing & family in case of this contingency? Your spouse would probably have a bunch of feedback for this situation.

Quote:
Originally Posted by MooreBonds
Is it really the case that you'd have to leave your current position before the company finds out if it's awarded the contract? Isn't there any way for you to sign a letter of intent that you will accept the employment contract if the firm is awarded the contract...but if they aren't awarded the contract, then there's no binding obligation for you to work for them (you can still negotiate a position after the project award decision is made).
Good suggestion that has to be discussed, but IMO a bad idea. This tells your new company that you're not willing to commit to sharing any of their risk, and it also tells the military that you're negotiating an employment offer with a contractor who's currently soliciting govt business in your area of expertise. You tell your new employer that you're not willing to risk anything while possibly giving off a whiff of complicity.

You might want to check into the ethics rules. If you're O-4 & above or in a "sensitive" position you might be subject to the DoD rules on post-retirement employment, which I believe is a minimum of six months in retirement before being able to accept the job. I'm not suggesting that you parse the regulations as much as I'm suggesting that a competing company that lost the contract could attempt to accuse your employer (and you) of violating the ethics regs. You want to hear from your prospective employer what they'll do if this happens-- or why it won't happen.

Quote:
Originally Posted by Average Joe
Any advice on either telling them straight up what I want in terms of compensation or on getting them to tell me what theyre willing to pay?
Quote:
Originally Posted by Average Joe
I can meet my lifetime financial goals by spending the next four to five years in the military. To give me the same deal (since Id be giving up significant pension increases if I retire) a company would have to pay me a bit over three times what the actual average American joe makes and allow me to live in an area where that figure is over twice what I need to live my present LBYM lifestyle. If anyone offers over that amount, in a decent area, for a decent position, with a decent chance of having it continue for a few years, Im gone.
Sounds like you already have the words to tell them what you want. I'd emphasize that you have very little financial incentive to take their offer because you don't hate your current job and you'll be pulling down a pension. (They already know this, you lose nothing by admitting it.) You want them to convince you that their work is exciting, fun, and worth the time it'll take you away from your family. You also want to know how they'll compensate you for the huge risk they're expecting you to take by leaving your job. Your next promotion alone is worth $xxx to your salary and your military retirement benefits, and you don't see how they can possibly match that without chewing up all the contract's profits and being unable to put in a competitive bid.

Which brings me to my next question-- let's turn this situation around and look at your prospective boss's logic. Who the heck are these people? Like Groucho Marx, do you really want to join this club if you're the best member they can find? If this contract is so important to them and if they're so likely to win it, then why do they have to pin all their hopes on persuading someone like you to retire? Where are all the other veterans with your skills? Why is this employer so desperate? How can they possibly afford to pay you what you're worth (let alone what you want) and still expect to remain financially competitive? How the heck can they follow through on all those acres of green grass that they're promising, or will you be the first to be asked to make some sort of sacrifice for the team?

Don't get me wrong-- this job offer is a good springboard to jump-start your thinking. I still believe that there are more bad things than good things that can happen to you by staying on active duty. I still think that you could start planning to retire at your rotation date and get your family thinking that way. But having to force the process by simultaneously leaving this assignment in a hurry to and getting what seems to be a dream job has too many questions and variables to have a good chance of working out.

When I retired I didn't put out any rsums or feelers and I still got a couple job offers. However the best offers, half a dozen of them, started rolling in on the first day after I'd been retired for six months. People had actually put my retirement date on their calendars, looked ahead six months, and added my phone number to their call list. Either they knew they'd have a need that far out, or they'd been scorched too many times by other contractors over the ethics rules.

Speaking of the transition process, what about networking the other guys in your community who retired last year? Are they already working for this contractor or could they help with questions about salary and the contractor's ability to get the contract?
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Re: Salary Negotiation - I've never done it.
Old 02-11-2007, 08:17 PM   #7
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Re: Salary Negotiation - I've never done it.

Given your lack of experience negotiating your salary. I think would be worth the $10-$15 and few hours of your time to purchase a negotiation book. There are several specific ones salary negotiation on Amazon, as well as the more general one. "Negotiating to Yes" is the one I read in association with a negotiation course I took at work many years ago.

IMO the advice is pretty generic, but they will at least prevent you from doing stupid things.
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Re: Salary Negotiation - I've never done it.
Old 02-12-2007, 12:55 AM   #8
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Re: Salary Negotiation - I've never done it.

Oh... I just want to add a thought since I read Nords post...

Anybody who thinks their skill set is so important that it can not be replaced is fooling themselves... there is not one person who can not be replaced with someone else that can do just as good of job or maybe a bit better... (and sometime a bit worse, but nobody cares... people don't remember that long...)

Look at all the generals who keep getting replaced... and the people saying 'he is the best man for the job', until 6 months later they get another general and say 'he is the best man for the job, he wrote the book on this'... until 6 months later they get another one.... you get the point...

I am not saying you don't have a skill set, just that there are others who can do the same job they are after you to do... don't think otherwise..
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Re: Salary Negotiation - I've never done it.
Old 02-12-2007, 10:03 AM   #9
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Re: Salary Negotiation - I've never done it.

A wise man I worked with used to say "Everyone matters...but not a lot". Or "not much" or "only a little".
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Re: Salary Negotiation - I've never done it.
Old 02-12-2007, 12:43 PM   #10
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Re: Salary Negotiation - I've never done it.


Dunno if this helps, but when I quit my full-time job on the way to RE'ing,
I intended (and still do) to contract for my former employer on an as-needed/
as-desired basis. Fortunately, for my field, there is a large and active professional
organization (IEEE) and I simply looked at their "salary survey" which also had
stats for contractors, broken down by state, specialty, etc. Found the median
number and asked for that. Probably sholulda asked for more, having 20yrs
experience and being really good (if I do say so), but it seemed like a LOT of
money for a per-hour wage, so I said what-the-hey ... Of course, the same
approach can be used for a annual salary.

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Re: Salary Negotiation - I've never done it.
Old 02-12-2007, 10:05 PM   #11
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Re: Salary Negotiation - I've never done it.

Everyone thanks for the advice.
Nords, as usual you ask all the tough and important questions and point out the issues. I explained my situation today without mentioning a dollar threshold. I got call not long afterward explaining that they were working on it, with a brief mention that I might throw out a threshold amount. I smoothly changed the subject smoothly only because the person I was talking too likely understood well that I was politely not going to mention a figure and they politely were not going to press me.

Im in unfamiliar position. On the one hand this could be higher paying than my best case active duty scenario. On the other, I dont need it. Mrs Average Joe is flexible. Shes more interested in my having a life than having a job. If I had to leave the military tomorrow, wed do OK. Id probably find something else to work at for a couple more years. I could actually make a decent, but lower salary at a much lower level of responsibility than the opportunity now in question (but I am of the opinion that lower levels of responsibility do not always mean lower levels of stress).

Nords, I do ask myself what am I still doing on active duty whenever signs of deployment loom as they do pretty regularly now. But I like my present position as much as I think its possible for me to like working for someone else. For now I retain the freedom to leave when I like and our funds grow. It is unsettling when things start looking like Ill have move or deploy - but Im learning to worry less about it as Mrs. Average Joe reminds me that weve got nothing to worry about in that regard. Shes flexible and says shes quite ready and willing to adjust to a new life. If I had to get out tomorrow and had no job lined up, it would not be an emergency, might not even be stressful; as you point out, it could even be a blessing more time for family more control over where we live. But while things are good, Im going to avoid doing anything rash. So this whole contract thing may not work out and I may not be willing to commit if the circumstances dont allow me to do so without risk that the possible payoff doesnt warrant.
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Re: Salary Negotiation - I've never done it.
Old 02-12-2007, 10:07 PM   #12
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Re: Salary Negotiation - I've never done it.

In this case I'd just keep muddling along in your current job until the pros & cons stack up overwhelmingly in one column.

You have not that much more to gain by action... but a lot of quality of life to lose!
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Re: Salary Negotiation - I've never done it.
Old 02-13-2007, 10:43 PM   #13
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Re: Salary Negotiation - I've never done it.

Quote:
Originally Posted by Nords
In this case I'd just keep muddling along in your current job until the pros & cons stack up overwhelmingly in one column.

You have not that much more to gain by action... but a lot of quality of life to lose!
Yea, I think you're right. The bird in the hand is good. It could turn rotten on short notice, but then I can handle that. This other thing will have to have the pros line up overwhelmingly in its favor - and become sure vice iffy to get me to go for it. It's funny; the more I think about it the more I have this sneaking hope they come back with an offer far below my threshhold so that I don't have to think about it too seriously.
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Re: Salary Negotiation - I've never done it.
Old 03-10-2007, 10:32 PM   #14
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Re: Salary Negotiation - I've never done it.

Thank you all for your thoughts on this matter. Heres how it turned out:
I was very noncommittal (because thats how I really felt) and it turns out the govt specified in the contract that the PM must have a degree in a certain field my BA and MA are not in that field. So the company rep called me to politely set this particular job aside for now but leave the door open for the future because they and I really might be a good fit for something sometime. All fine with me. It might even work out that way if they get the contract.

Not landing a big job out of this was good experience. I still wish the whole salary thing were more out in the open. But maybe Ill get the hang of this.

Ironically, Ill now be retired before the end of this year. Surprise assignment I turned it down and in doing so am required to retire. I do want to work a few more years so Ill start a job search as soon as the dust settles, which I hope is soon.
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Re: Salary Negotiation - I've never done it.
Old 03-11-2007, 08:41 PM   #15
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Re: Salary Negotiation - I've never done it.

Either way I think you blew out the game in the third quarter and you've been running up the score ever since.

Congratulations on your retirement!

Decided on a ceremony yet?

Called Lee Cohen @ Lucas Associates?
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