What to Do When the Hiring Manager Says: “Name Your Terms!”
“What will it take to hire you?” These words may be music to your ears, but how you respond makes a big difference. Take your time, collect your thoughts, and follow these seven tips to make the most of the opportunity:
- Decide you want the job. Make sure you like what the organization does and that the people you would work with give energy and get energy from you. Make sure you like what the organization does and that the people you would work with give you energy and get energy from you. If you do not like and want the work, or if you do not look forward to spending time with the people every day, a job at any pay will turn into a grind. If not, politely let them know and move on…it is a waste of their time and yours to do otherwise. If you want the job ask for a day or two to discuss it with advisers before getting back to them.
- Know your worth. Research the web and ask around to learn the current market value for your basket of skills. If you think you might undersell yourself, do some digging to arm yourself with up-to-date information and boost your confidence. On the other hand, be honest with yourself to avoid an inflated sense of worth. Make sure your expectations are reasonable given your compensation history and relative to those with comparable scope and scale of responsibility, experience, and results in your location. Do not go just by job title. For example, a first-time manager of a six-person team is not worth the same compensation as a 15-year veteran who has successfully led a 30-person team over multiple years, even though both are called Project Managers.
- Buy, don’t sell. Most job seekers pitch to prospective employers hoping to get an offer they can accept or reject. A better approach is to interview potential employers for a place to do important and specific things over the next career interval (as described in The Alliance, by Reid Hoffman). The question is not whether you are good enough for them … it is whether the opportunity is right for you. Make clear what you seek and get them to convince you that they have it.
- Think in terms over time. When asked: “How much do you want to make?” most reply with what they want in an annual base salary and bonus. A better strategy is to make clear that you want a good chance to earn a specific larger sum over some number of years. Tell them how much you need to live on but you are OK with the rest being at risk based on personal and organization performance. For example, you might let them know you want a good shot at earning $500,000 over the next three years and, as long as at least $100,000 is in base and high-probability bonus, the rest can be in upside bonus potential and equity appreciation. The idea is to aim high but with a reasonable base and bonus given your history and the market for your skills, leaving them with the challenge to show how your bigger goals can be met.
Sample Heads of Agreement
- Put it in writing. The hiring organization may be inexperienced or unable to pull together and present a written offer. Make it easy for them and position yourself favorably by drafting your own terms. Consider using this Heads of Agreement format to lay out terms important to you in a way that are easy to understand, easy to assimilate, and easy to work with.
- Label it DRAFT so it is clear you are willing to negotiate but treat it as an entire package and do not negotiate line-item by line-item. For example, if the organization wants to pay you a lower base, and you can live with that, tell them so but also ask for a more (because cash is certain and bonus and equity or not) than offsetting increase in bonus potential and/or equity.
- Walk through it. Arrange a time to review your proposal on the phone or, even better, in person. Talk through the terms as you have laid them out and offer to share your it, after refining it based on the discussion for them to turn into a written offer.
- Be gracious. When you get written terms it is critical that you express appreciation, ask lots of clarifying questions to be sure you fully understand the offer, commit to nothing, and ask for time to review with your advisers. You will earn respect by asking for time to review it and leave the best impression possible by not haggling over any items on delivery.
Finally, get back to them with your suggested edits but do not get greedy. When you have what you want…take it!
How To Negotiate an Offer