Getting your prospective employer to exceed their budget when hiring you is a challenge, but not impossible. In his book, “Negotiating Your Salary: How to Make $1000 a Minute”, Jack Chapman outlines a strategy for accomplishing this.
This article is part of my “Salary Negotiation Literature Review” series, where I review and discuss the key points of the best books on salary negotiation.
To break the budget, talk value first, and price second.
Jack’s #1 rule for salary negotiations is: “Don’t discuss salary until you have been offered the job.” His philosophy is based on the sales principle of discussing value first, and price second.
When a customer (the employer) makes a large purchase (hiring you), they go through three stages: budget, fudgeit, and judgit. In the budget stage they unemotionally stick to their prescribed budget and hire a candidate that fits in that range. In the fudgeit stage, they are willing to fudge their budget a little bit (move things around) in order to hire the right candidate. And in the judgeit stage they are willing to break their budget entirely and hire someone they cannot afford, because they know that they only way they can afford them is by hiring them (they know the new employee will make or save them $x, thus giving them a positive return on investment).
The goal is to avoid getting hired at the budget stage, and to move the employer along through the fudgeit and judgeit stages.
This is done by discussing value first, and price second. If you talk price upfront, you will either be hired within their budgeted range or be screened out for requesting too much. Avoid discussing salary until after you have been offered a job, you have the opportunity to get the employer to become emotionally invested in hiring you to the point where they are willing to fudge, or break, the budget to hire you.
Remember the Gucci family’s slogan: “Quality is remembered long after the price is forgotten.” You are a unique, high-quality product that will bring continued value to your employer. There is no fixed price for your services. So when selling yourself, discuss value first and price second.
What about breaking the budget for a raise?
Negotiating a raise is different – and usually harder – than negotiating a starting salary because it often requires a greater burden of proof to demonstrate that you have actually produced results. But the philosophy is the same: discuss your value before you ever talk money. The key to getting your boss to recognize your value is to document your results and then have your boss acknowledge them.
Jack recommends using a job journal as a way to document your results and plan your request for a raise. It should contain your thoughts on the following topics:
1. Achievements: What work have you done? What problems have you solved? What new techniques you have developed? Any hard data (statistics) is helpful.
2. Observations from studying superiors, colleagues, subordinates, and customers: What are their strongest talents? What matters to them? What puts more money in their paychecks? What will they be able to parlay into their own raise or promotion? What do they care deeply about?
By studying your colleagues and identifying their strengths (not their weaknesses), you will develop a respect for them, improve your relationships with them, and understand how best to approach them for your requests.
3. Ideas for progress: any epiphanies you have had on improving your work.
4. New items about your career field: What is your take on the latest developments in your industry? Putting your thoughts down in writing will help you solidify them and force you to think about and stay abreast with the news in your industry.
When it is time for your performance review, your job journal will provide you will ample evidence of your accomplishments, ideas for future job improvements, and insights into what your boss really cares about. After your boss acknowledges your excellent work, then it is time to begin discussing money, not before.