Offer Negotiations

So I love to turn to my Wakeworld brethren for advice!

Scenario:
You've been working contract-to-hire for an organization for 2 months. They want to convert you to full-time and present you with an offer. The offer could be considered fair but is under your expectation and what you consider your worth to the company.

Options:
1. Accept offer as is.
2. Counter with a new base salary.
3. Counter with a new bonus percentage.
4. Quit!

What say you? I always feel it's a fine line between negotiating to better your compensation and showing your appreciation with the offer presented and not pissing off your potential employer. This is in Finance.

I think the style of communication that works best is just be honest and forth-wright with them: "I'll be honest, while I am very excited to work here full time, I was a little bit disappointed with the offer." Counter with the number you were thinking of (or even a bit higher to allow settling). My point being, I think you can ask in a way that isn't offending at all. You're just trying to do the best for yourself. Everyone understands that. You don't ask, you don't get.

Be wary of bonuses that are discretionary. Promises about what the bonus will be depending on how the company does are often disappointments when they really happen. Formula driven bonuses are based on hard numbers and leave discretion out of it. Of course, I'm in sales, hence am happy to live with the formula.

Andy - GREAT thoughts. I appreciate it. My bonus would be somewhat both. It is a formula but it's a formula built both on company and personal performance.

I'm tempted to just counter as I know now is my chance to negotiate. That being said, I want to be realistic and fair with my asking as well. I guess my only real concern is them denying my offer and sticking to their original offer. I do not have another offer on the table as of today so it's likely that I would say yes either way, but them saying no could bread discontentment.

They are going to offer to meet you in the middle for wherever you counter (if they do negotiate). Make sure you aim extra high.

I agree with Jarrod. Now is the time to negotiate and if they think highly enough of you to make you the offer, they will work with you I'd imagine. Even if they don't, the worst they can say is no and the offer is still on the table. It's like going for a hot chick, you'll never know if you could've landed her if you never tried.

My wife and I are actually right in the middle of relocating to California. She's staying with her company, just relocating, and it's been an interesting process negotiating with them. It's an extremely complicated move package being that we're going from a cheap place like TX to CA. From the time that she found out she got the promotion to the time they actually gave us the official move package, we came up with minimum numbers in different areas of it that we needed to get. The offer actually came in higher in every category so we had decided we were going. We countered in a few different areas of the package and asked for some of the "that shouldn't be a problem's" to be put in writing. Ultimately, they accepted every part of our counter but refused a very slight adjustment in the base salary. They kind of shot themselves in the foot with it too as the one thing they wouldn't budge on, really was the least costly to them when they gave in to everything else.

Anyways, sometimes with companies, there are so many people involved that they can't see the forest for the trees. You only get this one shot to negotiate so take full advantage. I'd counter with salary, stock, free hotdogs, parking, a new car, gas allowance, whatever. You might be surprised what you get.

As an executive recruiter for the last 15 years I do this on a regular basis. The most important thing is understanding your environment - only you really know the dynamics of that culture. I will disagree with JRod (maybe for the first time since joining Wakeworld) but that is not true. Depending on the complexity of the organization there are many other factors to weigh than expecting a low ball (although that does often happen).

The one piece of advice that I give all of my candidates is........wait for it........its gonna be shocking......make it personal.

By that I mean - tell them that based on your expenses or on your investment goals or on your financial planning to start a family or whatever - give them a reason for that number that they can't prove wrong. Salary survey's and what Bob makes in the cube next door is not going to help. Those can be dismissed by anyone. If you make it personal - they can't take that away from you and tell you it isn't important.

Is this a large corporation? Usually there are pay grades. If you know the ranges of the pay grades, it will help you considerably. Just realize that these companies have budgets, and payroll is part of the budget. If they really want you, they'll give you what you want. Aim high, know what the industry average is (aka.. do your research), and shoot for above that. Negotiating on a salary is just like any other negotiation... if you're educated, you'll come out ahead. When they offer you $X, tell them you're looking for something about 10k more than what they offer (or even higher). Usually pay grades range between 10-15k per grade from the lower end to the upper echelon of the pay scale. You want to be on the high side of things.

UPDATE: Thanks for all the feedback. It's a long story but I had been (by choice) out of the work force for the past year. I was worried about that affecting my earning potential going foward. So I was supposed to be on a 3 month contract with my current employer with which I am 6 weeks in. I had pushed for a faster conversion to full-time but they kept telling me they had to wait until the end of the contract period and reevaluate. Well, my boss found out I just had my 3rd interview at another organization on Wednesday. That resulted in an offer letter on my desk Thursday morning. haha

So I had the negotiation conversation today. And I did ask for and get a $10K bump on top of what was a pretty generous salary. My only other request was a title adjustment but it doesn't look like they are going to move there. Some of the reason is this is a small organization and I don't believe my requested position actually exists. I know they could create it but aren't willing to do that right now. At the end of the day though, I am very satisfied with leaving a job, taking a year off, and then being hired on full-time with another company and receiving a 25% compensation increase.

Thanks again for the thoughts. I do not enjoy negotiations by nature which is why I'm in Finance and not in Sales!