When planning on negotiating a job offer it is important to consider the full compensation package and not only the base salary.
When planning your negotiation compute the dollar value of obvious benefits such as medical insurance and add this figure to the salary for a more accurate picture of the job offer. You also need to consider hidden benefits such as salary progression and training to properly evaluate the value of the job offer.
Key to developing your negotiation strategy is to look at all the elements of the job offer. Decide what it will take to turn an unacceptable offer into an acceptable offer and which items you can negotiate.
Evaluate the Benefits
Negotiating a job offer includes discussing the benefits. Benefits can add up to 30 percent of the total compensation. At December 2007, benefit costs as a percentage of total compensation costs were 30.2 percent (Employee Benefit Research Institute).
Assess the value of these commonly offered benefits to you personally when evaluating your job offer. Medical Insurance - consider these statistics from the Employee Benefits Research Institute when evaluating this benefit. In 2007 employer health insurance premiums increased by 6.1%, twice the rate of inflation. The annual premium that a health insurer charged an employer for a health plan for a family of four averaged $12,100 of which the company contributed $8,800 and the employee $3,300. The annual premium for single coverage averaged about $4,400 of which the employer paid on average $3,700.Dental Insurance and Optical Insurance - often not part of a medical plan, so if this coverage is offered it is a bonus.
Life Insurance - many companies provide a basic coverage which can be added to.
Disability Insurance - both short-term and long-term.
Pension Plans - assess the value of the employer contributions and the plan as a whole.
Profit sharing/bonuses - find out the amount of the last three or so payouts relevant to your percentage/position etc. This helps you to put a $ value to this benefit. Consider company and industry conditions to anticipate future payouts.
Stock options - consider how the stock has performed and how it is likely to perform in the future.
Tuition reimbursement - what further education and training will be of real value to you and what will any reimbursement offer be worth. Always consider benefits like these with your own personal goals and circumstances in mind. Tuition reimbursement is of little value if your circumstances don't allow you to take on any extra tuition.
Child care - what is the value of this benefit to you. Consider both the $ value and intangibles such as convenience, peace-of mind and time-saving. When negotiating a job offer you need to evaluate each benefit on it's merits and determine how those perks will benefit you. If you don't plan on having children for a while or if your children are grown, it's not that important whether on-site child care is offered.
Employee Assistance Programs and Wellness Programs - counseling can be of great value to employees depending on their circumstances. Consider other aspects of these programs like health club membership and free medicals.
Overtime - while salaried employees are usually not paid overtime, some companies do compensate for time above an expected standard number of hours. This can take the form of overtime pay or bonus pay.
Parking - this often overlooked benefit can amount to a large amount over time, especially if you will be working in one of the high-cost parking cities.
Expense reimbursement - factor in business related costs that you will be reimbursed for including phone, computer(laptop), car, entertainment etc. Know what expenses will be covered and to what extent.
Also consider benefits that provide personal satisfaction such as the number of leave days provided. When preparing for negotiating a job offer evaluate the benefits that don't have a specific $ value at this point. Apart from compensation what else does this job offer include? Consider these aspects before you begin negotiating a job offer.
What kind of promotional opportunities can be expected over the next 5 years. Along with this, what kind of salary progression can be anticipated during this time? How often do salary reviews take place?What training will you receive on the job? What will this training translate into in terms of the value of your skills and experience, your goals and your overall job satisfaction.
After considering the entire compensation package you are in a position to decide what is important to you and what benefits you want to negotiate in addition to the salary. You can now put together your negotiation proposal.
Put a Direct $ value on the following:
Salary (Use the Salary Requirements Calculator to establish your acceptable salary range)Bonuses
Profit sharing
Stock options
Overtime
Insurance benefits
Direct expense coverage such as car/transport,tuition, phone etc
Company services that have a specific $ value to you such as child care, wellness programs etc
Factor in aspects that have an indirect or potential $ value such as training, promotional opportunities and anticipated salary increases.
Prioritize your interests and decide where you are willing to trade one thing of value for something else. Is the performance bonus more important than the salary?
Negotiating a job offer requires two major steps. The planning which involves research and information gathering to develop an effective negotiation strategy and then communicating effectively with the employer to get the offer you want.
Prepare by knowing your competitive market value and company-value.
Use the salary negotiation tips to get the job offer you want.
Return from Negotiating a Job Offer to Best Job Interview
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