Compensation and the Art of Negotiating

If you undernegotiate your salary, every subsequent raise will come from this lower base, adding up to significant dollars lost over the span of your career.

Salary surveys are available on the ACS website

Do not be misled by the gross salary figure—you’re likely to lose 30%–40% of that total to federal and state taxes. Add to that pretax deductions, such as your contributions to health insurance premiums. Also take into account your monthly living expenses. Figure out what you will have to spend in after-tax dollars, because that’s what you’ll have to live on

Before you formally accept a job offer, there is the issue of compensation. If you’re an entry-level candidate, the salary probably is not negotiable. If you are accepting a high-level position, however, you may have some room to bargain.

Salary Requirements

You’ll want to think about your salary requirements before the interview—considering what you’ve achieved, what you have to offer, and what you are worth to an employer. Keep in mind that many factors affect how much the organization might offer. If they’ve had a difficult time finding the right person, for example, chances are the perfect candidate could negotiate a higher salary than originally offered. However, if they know many other qualified candidates are available and willing to take the offered salary, the employer may not want to budge from a lower offer.

The importance of filling the position and how long it’s been vacant are other elements—as are the organization’s interest in you and your interest in the job. You also have to factor in the potential for personal/professional growth and promotion.

Before beginning any discussion about salary, estimate your minimum monthly financial requirements: rent or mortgage, utilities, car payments, gas, insurance, student loan payments, groceries, credit cards, etc. Subtract those amounts to derive your minimum pay. You do not have to discuss this amount with anyone, but it gives you a place to start. Also, find out what your skills are worth in the marketplace. The ACS Department of Career Services conducts annual salary surveys of members and annual starting salary surveys of new graduates in chemistry/chemical engineering. These surveys present data by highest degree, employer type, employer size, work function, and other demographic data. Once you identify your requirements and market value, you can come up with a figure that would make you happy. Don’t be outrageous; keep it within reality.

You should now have 3 amounts in front of you: the minimum you need to earn, an average based on the market, and your ideal figure. Negotiate down if necessary from your ideal, but not below your minimum.

You want to maintain the advantage and keep yourself in a strong negotiating position by getting the interviewer to provide salary information first.

Talking About Money

Salary questions are ordinarily raised once you’re under serious consideration; don’t knock yourself out of the running by revealing what amount you have in mind. For the same reason, never indicate your salary requirements on the application; write “open” or “negotiable.” If the question is raised early, postpone the topic until you have more facts and are sure the organization considers you a serious contender. Let the interviewer know you still have some questions about responsibilities of the job and that you’d prefer not to talk about pay until you have a full understanding.

An interviewer who asks about your salary history is looking for the frequency and percent of your raises—indicators of your performance as well as the relative value of their offer. Your goal is to negotiate a salary based on the job you’re applying for, not based on your previous salary. You could reply that because this is different from your current job, your existing pay wouldn’t be very useful in evaluating your worth for the new position.

Once the interviewer asks, “What are your salary requirements?” you have several ways to respond; here are a few options:

Itemize what you would be doing daily as well as the scope of your responsibilities, then ask the interviewer what figure they had in mind for someone with your experience or, better still, what salary range has been authorized for the position.
State that you’re certain the organization will make you a fair offer, because you believe your credentials demonstrate you are well qualified, then ask the interviewer about the range.
Let the interviewer know you expect a salary appropriate to your experience and ability to do the job well, then ask what range the interviewer had in mind.

Your objective, of course, is getting the interviewer to reveal the salary range first. Once you have that information, you can adjust your range so that the minimum overlaps the offered maximum. For example, if the interviewer’s range is $55,000–$60,000 a year, you can respond with $58,000–$62,000. Now you and the interviewer have something to talk about. If you ask for too much, you risk pricing yourself out of the job; if you ask for too little, you don’t know how much you are worth. The last thing you want to do is to give a specific dollar figure because then you have no room to negotiate.

Getting What You’re Worth

You like the job, you know you will be successful, you’re prepared to give it your best efforts, but the initial offer is lower than you expected—is there some room for negotiation? Most employers operate in one of these modes:

Take a win/win approach to the negotiations; your attitude can affect the outcome.

Take-it-or-leave-it deal: They say there’s no such thing as negotiation for this job.
Set salary range: They’ve set a predetermined range for the position, and placement is determined by your experience. The top of the range is rarely offered to a new hire, but is reached by a series of raises over the years. To increase the salary significantly, the job would have to be upgraded to the next range. (If the employer has underestimated the necessary skills to perform the job well, this could happen.)
Flexible salary: They have flexibility to adjust the salary. This is the best position for bargaining; however, if there are other candidates who are equally qualified, and the employer would be happy with any of them, your power to negotiate is reduced.

Another option is to agree to a performance review after 6 months that would include a salary adjustment. Lump-sum signing bonuses are nice, but that money isn’t added to your base salary or figured in for your review. Because future raises will be based on your actual salary, you want to come into the job with as high a salary as you can negotiate.

Once the salary question is settled, you will need to address the benefit package.

Benefit Packages

Although benefits vary widely across employers, larger organizations usually have more comprehensive packages. Think about what types of benefits you will need. Some organizations have flexible plans that allow you to select the benefits you value most.

Benefits are considered part of total compensation, adding a value of up

to 30%–40% to your salary.

Typical benefits include:

Health (medical, dental, vision, hearing, pharmacy, long-term care)
Life, disability, and accident coverage
Profit sharing
Stock options
Paid time off (sick leave, vacation, holidays, bereavement, jury duty)
Transportation benefits (parking, company cars, or subsidies)
Retirement (company paid, employee paid, or a combination of these)
Miscellaneous (childcare, tuition reimbursement, flexible hours, telecommuting).

Review Identifying Your Values (Chapter 1) as you work on your decision.

Evaluating an Offer

Once you have an offer in hand, you need to evaluate it. You don’t have to give an answer on the spot; ask for a reasonable period to think it over. Use the time to talk with your family and others whose advice you value. Be careful not to consult with too many people, though—if you ask 8 or 10 you’re likely to get just as many different viewpoints, making it difficult to weigh so much advice along with your own judgment.

Remember, money is only part of the evaluation process; salary cannot substitute for job satisfaction. Nothing is worse than waking up every Monday morning dreading the coming week. On the other hand, gratification from your daily work can be more valuable than the dollars.

Perhaps the best thing to do with your advice is to put it on paper. Draw a line down the middle of a page; label the left side “Pros” (reasons to accept the job) and the other side “Cons” (reasons to reject it). List your reasons in each column, then analyze your results. If you’re lucky, one column will be much longer than the other. If not, rank your reasons, giving more decision weight to the higher-priority items.

As you consider the offer, think about the base salary and salary potential, future career prospects, benefits, commuting time, the people you’ll be working with and reporting to, job responsibilities, and all the other intangible variables. Questions to ask yourself include:

Do I like the work?
Can I be trained in a reasonable time, giving me a realistic chance of success on the job?
Are my responsibilities likely to be challenging?
Is the opportunity for growth in the job compatible with my needs and desires?
Are the organization’s location, stability, and reputation in line with my needs?
Is the atmosphere or culture of the organization conducive to enjoying the work?
Can I get along with my new manager and immediate work group?
Are the salary offer and total compensation package the best I can get?

Accepting an Offer

You may accept an offer verbally on the condition that you receive it in writing. Make sure the offer covers salary, starting date, benefits, and any other details you have negotiated. If you are currently employed, make it clear you want to give your employer sufficient notice before starting the new job.

If you receive a counter offer when you notify your current employer, resist it—for these reasons:

The factors that prompted you to look for another position in the first place have not changed.
If you accept the counter offer, your current employer may doubt your loyalty.
The prospective employer may conclude you were trying to gain leverage with your current employer and were never a serious candidate, which could damage future opportunities.

Call other employers where you’ve had interviews and explain you have a firm offer with a certain period for a response. Ask about your status with them. If you are not their first-choice candidate, they will likely tell you; if you have the luxury of choosing offers, redo the Pros and Cons exercise to decide, then negotiate the best terms you can get.