NEGOTIATING A JOB OFFER Elizabeth Umphress Ph D

NEGOTIATING A JOB OFFER Elizabeth Umphress, Ph. D

Today’s Agenda • Basic Negotiation Concepts • Creating a Points Schedule • Negotiating a Job Offer

The Choice to Negotiate Among top tier MBA graduates, starting salaries of men are 7. 6% higher than those of women. % of men who negotiate? 57% % of women who negotiate? 7% Average salary increase that results from negotiation? 7. 4%

The cost of not negotiating By age 65 = $3. 2 M 780 By age 65 = $1. 9 M In starting salary, 680 that’s 32 years more work – By I age 65 = $728, 356 580 hope you like your job!! 480 380 1% raise differential? If an additional. 5% raise is $190, 000 negotiated annually? Cumulative difference of one time decision not to negotiate? $149, 000 $107, 972 280 180 80 $100 K $107. 6 K 30 40 65

BATNA Best Alternative To Negotiated Agreement What was your BATNA? Why is BATNA so important? • BATNA = POWER • Planning BATNA TIPS Never reveal— signal. Don’t lie. Constant improvement is key. What is your opponent’s BATNA?

What are my alternatives? Buying a car • My current car • Taking the bus • Best deal at another dealership Salary Negotiation • My current salary • Best offer from another company • Retirement Supplier Relationships • Status quo deal • Best deal from another supplier • Change to manufacturing process

Best Alternative = BATNA Buying a car • My current car • Taking the bus • Best deal at another dealership Salary Negotiation • My current salary • Best offer from another company • Retirement BATNA Supplier Relationships • Status quo deal • Best deal from another supplier • Change to manufacturing process

BANTA determines Reservation Point Buying a car • My current car • Taking the bus • Best deal at another dealership Salary Negotiation • My current salary • Best offer from another company • Retirement Walk away if you can’t beat this. Supplier Relationships • Status quo deal • Best deal from another supplier • Change to manufacturing process

What’s your target? “As high as you can go without embarrassing yourself in front of a respected third party” -Fisher Ury and Patton TARGET TIPS -Do your research and refer to it. -Set aggressive goals, don’t act aggressively. -Set specific goals. -Realistic (high but not embarrassing)

Creating a Points Schedule • List all of the issues included in an outcome • e. g. , everything included in a job • Order the list according to what’s most and least important • Remove anything you don’t care about at all • Assign percentage values to each issue based on your interests • Location (30%), type of work (20%), salary (15%)… • Allocate points based on those percentages 10

Sample Points Schedule 11 Issue Points Possible Texas A&M Points City 300 250 Colleagues 200 Commute 170 0 Research Support 150 Distance 100 from Family 80 Salary 80 80 1000 Reservation Point = 760

Negotiating a Job Offer: During the Interview • Think about the best way to present yourself • Frame disadvantages as advantages • Don’t start negotiating until you have received the offer • Don’t talk bad about current company/ UW • Ask them specific questions about their company

Negotiating a Job Offer: Getting the Offer • Do not immediately agree to the offer • Thank you! I will take some time to review it. • Get the offer in writing • Be enthusiastic and gracious

Negotiating a Job Offer: Preparation • Do your homework • Determine BATNA, RP & Target • Research employer’s BATNA • Wage structure, standard package, insurance, recent problems and needs, what they want in a candidate

Negotiating a Job Offer: You Get the Offer Assume that their offer is negotiable, don’t ask • Assess their ability to negotiate • I have some questions…who should I speak to about… • 8 of 10 recruiters willing to negotiate; 1/3 of applicants feel comfortable negotiating

Negotiating a Job Offer: During the Negotiation • Imagine that you are negotiating for someone else • Tell them exactly what needs to be done for you to agree • Be sure to use fairness justification • Prepare responses to various situations, PRACTICE • • Employer agrees immediately Employer makes a low-ball offer Employer makes one small concession Employer makes a reasonable offer

Negotiating a Job Offer: Post-Offer: Now what? • Don’t negotiate if not interested • Exploding offer • Consider it & inform other companies about it • Don’t create a bidding war • Know when to stop (2 times back and forth) • The other side is not responsive • Reciprocal concessions are becoming miniscule • They say ENOUGH • Choose your offer!

Contact me with questions: eu 4@uw. edu THANK YOU!