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careers

Negotiating a Salary

DUSP Careers and MIT Career Services offer several tools and resources for students and alumni that will help them negotiate a salary. Please see the following links for such resources.



Advice on Negotiating Your Salary


If you are unable to see the video, please click the following link: Larry Susskind on the Job Negotiation

Most professionals dread having to negotiate their salary. They are unsure of how to proceed and they are afraid that they might alienate their (potential) employer, especially when a first job out of school is involved. Thankfully, the field of negotiation has developed to the point where we can cull a half dozen important prescriptive ideas that will make all salary negotiations easier.

1. Focus on all your interests, not just on a dollar amount. Once you are clear about all the things that are important to you (i.e. when do I start, what time off do I get, what kind of office will I be assigned, what travel budget will I have, what moving costs do you cover, what are the health and retirement benefits you offer employees, what kind of equipment will I be given, what choice of work assignments will I have, what kind of supervision will be available to me, what additional training will you provide, etc.), it may be that increasing your starting salary is a less important than getting a bundle of other items from this list locked in. Sometimes, an employer may be absolutely immovable on starting salary, but willing to cover moving costs, provide access to low interest mortgage assistance, or subsidize annual commuting costs if you use public transportation. In the end, it is the overall "value" of the "package" they offer that is most important. Figure out what is really going to make your job enjoyable and allow you to be most productive.

2. Don't take the advertised salary level as the last word on the subject. A prospective employee who assumes that the advertised salary represents the absolute limit, will surely not be able to do better than that. However, a prospective employee who knows how to inquire about the "factors" that determine salary can often exceed the advertised salary. For example, if you ask, "What is the salary you propose for this position?" You will get the advertised amount. If you ask, "What can you do for me relative to salary, given all the experience I bring and my extensive educational background I offer?" You might get something like, "Well, we have to start you at $45,000, but we can do a six month review. Most of the time, those reviews lead to a 10% bump in salary if everything is going well." Or, instead of asking what they propose to pay, ask, "What is highest salary someone with my background and skill is currently getting in your organization?" They may not want to answer that question, but it is a good question to ask. Don't ask them for a number, instead, talk about the kinds of considerations that can help you go beyond the advertised number.

3. Try to make explicit the ways in which the organization judges and rewards performance. Be sure to ask about the considerations that will get the most weight in annual performance reviews. Do this before you go to work at a place and do it again (each year!) once you are employed somewhere. Then, have several conversations during the year with anyone who will be reviewing your performance to make sure they know exactly what you have been doing and why you think your performance has been exemplary. You don't want to negotiate the criteria for salary increases during a performance review. Get this in writing well ahead of time.

4. Explore contingent commitments. Sometimes it is possible (even when talking about an entry-level position) to get the person doing the hiring to offer a contingent commitment. "We can only offer you a starting salary of $45,000, but if you can bring in additional clients or find a way to help us solve a particular problem, that would certainly make it easier for us to bump up your salary by $5,000!" You should always explore contingent commitments by asking, "What kinds of special problems is the organization wrestling with? If I could make a contribution to solving one of those problems, would that make it more likely that you could reward me financially?"

5. Turn low offers into opportunities to generate other kinds of benefits. If a salary offer is lower than you would like, you should make it clear that's how you feel. You should also ask whether you can have an extra week off in the summer, or be allowed to use your office laptop for personal business, or keep the bonus miles you accumulate at work for personal use. There are situations where these "benefits" cost the employer nothing, but are worth a lot of money to the employee.

The biggest mistake new entries to the job market make is to underestimate their value to a potential employer. If asked by a prospective employer, "What is it you need to earn to take this job? Or, what is the salary you are looking for?" The correct answer is, "The most you would possibly pay someone with my background and skill who will do an excellent job for you!" If you say a specific number, it could well be lower than what the employer is actually willing to pay (but you'll never know).

Don't undersell your abilities!

Professor Larry Susskind

 

• 2013-07-16 12:08:14 •