In these very tumultuous times, how do you avoid a big target on your back? Don’t over-negotiate your salary when landing your perfect job.
Glenmont Group places over 100 people a year, most of whom have very successful careers in their new gigs. Some (a very small percentage) do not work out and lose their positions in 6 months or less. More times than not, this can be attributed to one simple reason: You ended up in a position with an enormous target on your back and an entire organization was waiting for you to misstep so they could get rid of you. So how does one avoid having a 10-foot bulls-eye on a 2-foot back? DO NOT OVER-NEGOTIATE!
Now, you would think it is in Glenmont Group’s personal interest to have you over-negotiate. After all we are paid a very nice percentage of you base salary. Or, simply put, you get more money, we get more money. Now, we can all afford college for our kids. Truth be known, if we put you in a position to lose your job, we end up with a very upset client that is likely to ask for a refund or simply won’t use us again. It’s a losing scenario for all parties involved – you lose your job, our client is out time and money invested and embarrassed by what is viewed as a bad hire, and we lose our client. No repeat business - no long term growth; no long term growth - no college tuitions…you get the picture.
So why is over-negotiating so bad? Generally speaking, you effectively turn a “love fest” into a “questionable hire” in their eyes. How does this happen? Typically, this occurs at the end of a company’s interview process. A candidate suddenly deviates from their previous mindset, turning their attention to some key element they now think they need to “cash-in” on with the position or offer. Here is how this process basically break down:
At the start of the recruiting process, you become a part of an essential “formula”: You have been narrowed down from 100 resumes, which yeilds 25 submittals, which usually results in 10 candidates selected for interviews, which ultimately pares down to only 2-3 candidates for the final shootout. During this process you are building up good karma. Each successive step adds another good karma chip. By the time a company wants to make an offer of employment, they are absolutely in love with you (hence the “love fest”).
Now comes the negotiating time.
At the beginning of the search, we are often given a range that our client wants to hire in. For this example, let’s use $125k to $150k, depending on experience and current compensation. The standard rule of thumb is if someone is trying to recruit you from your current secure job you are entitled to a 5%-15% bump up in base (yes in some cases it will be more and if you are currently unemployed it will likely be equal to or less than what you were making at your last position). All good recruiters should not only tell you honestly what the range is without exaggeration, but also advise you as to what you might likely get if the clients do like you. However, a strange thing happens right at this all too critical point – all that good karma can give a candidate a false sense of what their value is and worse, how significant their leverage is. Now the candidate not only wants more than the 5-15% bump, but insist that, in order to get them, a company will have to pony up more money (i.e. guaranteed base or potential bonus, stock, or equity value), a higher title, and/or a more substantial benefits packages (i.e. extra PTO, expense reimbursement plan, higher company 401K/pension contributions, etc.).
Well once it goes past the pre-approved comp range, this new request almost invariably has to go to a compensation committee for approval of these new terms, all of which will cost the firm more money. Recruiter Michael tells HR Person Anne that this beloved candidate now wants more than the $150 that the position was pre-approved for. HR Person Anne goes to Boss David and says that we cannot get you the beloved person now unless it’s $165k and 2 extra weeks of PTO. After a few grumbles and several curse words, Boss David takes it to the committee where he now tries to put the best spin on this so he can get you, the aforementioned beloved candidate. He says, “I can’t get this really great candidate for $150k. It will at least take $175k.” He is negotiating up so he can get you the $165k. They say, “Seriously! Why do we have to pay this person so much?” The love is very quickly disappearing, practically pouring out of the room and straight into the gutter, and that dreaded target just showed up. Boss David now supersizes the target by saying, “Because he can move the heavens and mountains if we hire him AND can do it from day one!” Bingo – now the target is ENORMOUS on your back and you were not even part of any of the promises that Boss David has just made to this panel.
Boss David has made his incredibly compelling arguments, and the committee has granted his wish. You negotiated for the extras, you got your extras. So now you start the job and guess what…that ”honeymoon period” you experience when you start a new job at a new company is nowhere to be found. Nope, the pressure is on you right from the beginning to deliver Boss David’s promises that you were not even part of! How could the company expect so much in such a short amount of time? They over-extended themselves to meet your requests just to hire you, you better believe they expect nothing less than the same from you. One stumble, one questionable decision, one proposal not 100% to expectations, is one step closer to already being out the door and back searching for your next new job. Your up-front demands have invited more eyes to watch your every step than any one person should ever want. Next thing you know, you’re being called to the HR office and asked to “bring your laptop and corporate ID”.
SO my advice is – sell yourself accurately, make sure you know what the compensation range is up front, come to terms with that range in advance of the interview process and utilize the “love fest” to get an offer WITHIN the company’s stated compensation range. Then hold on to that “honeymoon period” and enjoy your new “secure” job!