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How to Negotiate Your Salary Package

In this tight job market, it's easier to get a good deal. With demand for many employees high, the "standard package" for new hires goes out the window. Candidates increasingly are requesting and getting signing bonuses, work-at-home arrangements, extra vacation time and lots more.

But there's a catch. While it's easier to get a good deal, you may have to negotiate a spectacular one. Compensatory and merit raises are increasingly meager these days, as pay bands, salary caps and other bureaucratic mechanisms conspire to keep payrolls from exploding. So it takes some aggressive bargaining at the front end of an employment contract to make up for shortchanging down the road.

"If you don't ask for it, you won't get it."
Recruiting managers aren't paid to bestow fat salaries and perks on their new hires. "I don't volunteer anything," says Brian Krueger, a hiring manager for Wisconsin information-systems consulting firm. "But if someone I really want to hire asks for a concession, I'll always try to accommodate them."

Mr. Krueger says the most popular requests nowadays involve vacation time. Most companies have rigid vacation-accrual policies, which are especially onerous for new employees. His company offers the standard two weeks to new hires in their first year, he says, which was distasteful to one recent candidate, whose seniority at her former employer allowed her four weeks off.

"I can't change our company's vacation policy," Mr. Krueger says. But he could offer her two weeks of unpaid leave. And since her software-programming skills were in hot demand, he could also increase her salary to make up for the amount she'd lose in unpaid time off.

Also at the top of candidates' wish lists these days are work-at-home provisions. As with other benefits, companies don't volunteer these, but they'll provide them if prodded. "People are negotiating for more control of their schedules," says Joseph Bruccoleri, a vice president at outplacement consultant Drake Beam Morin Inc. in Paramus, N.J.

After receiving a job offer from a Long Island, N.Y., pharmaceutical firm, one of Mr. Bruccoleri's clients asked to work from his New Jersey home one day a week. Company officials were reluctant to allow a senior manager with daily supervisory responsibilities to work from home. But they gave in after he made a strong case that the hellish 55-mile commute required some relief. Which leads to the next key point:

"Know the facts."
Compensation consultants say the best way to get the pay package you want from a new employer is to provide ample justification that what you're asking for is fair and reasonable.

For salary negotiations, nothing beats clear evidence that your price is in line with the market or with that of other employees in similar jobs at the company. Many top executive-search firms keep databases of salary information, which they'll share if you ask. The boom in job hunting via the Internet also has created a growing array of comparative salary data, not to mention a way to ask others about going rates. Even want ads sometimes include compensation information. If they don't, call the companies advertising jobs similar to the one you're considering and ask about the salary range.

Finding company-specific information requires some extra sleuthing. The first place to look is the human-resources department, which will almost always give you a salary range for a given position. It's also worth talking to current and former employees. They may not want to reveal their own salaries, but they might be gossipy about what others earn. And they're often willing to share what they know about company benefits and typical perks.

Salaries of top-level executives, of course, are listed in the company's annual proxy statement, which also discloses the perks and other benefits they got the previous year.

"Don't give up."
If your research or interviews show that your compensation goals are out of line with the company's pay bands, there's still hope. Sign-on bonuses and so-called special grants are increasingly used to get around official compensation limits.

These are especially prevalent in the computer industry, where hot new technical skills often demand salaries that eclipse those of veteran employees in similar positions. For example, when a software vendor's base salary was 30% below one candidate's requirement, "the company gave him a three-year special grant equal to his annual salary," recalls Korn/Ferry's Mr. Wellman, who helped negotiate the deal. "That way, they met his price without breaking company policy." He notes, however, that such arrangements often are treated confidentially to prevent resentment from co-workers, so you won't hear about the deals from employers.

Another caveat: Companies know that people with hot skills have them over a barrel, and it doesn't help to rub their faces in it. You also run the risk of having your new manager resent that you took him for all you could at the outset. "It's tough enough starting a new job," says management consultant George Bailey, who recently made the jump to Watson Wyatt International from Price Waterhouse. "You certainly don't want to start it off on the wrong foot by making them resent you because you played hardball over salary."

4. "Tell the truth -- mostly."
It's never a good idea to lie to recruiters. But some compensation consultants offer one possible exception to this rule: If you were drastically underpaid at your previous job, it may not hurt to inflate your salary. An abnormally low previous salary "can send up a red flag with the employer," says Hal Netkin, a partner with executive recruiter NFS Associates in Van Nuys, Calif.

Mr. Netkin says he sometimes tells low-earning clients to overstate past salaries to bring them in line with the market. Since it's often impossible for hiring companies to extract salary information from lawsuit-wary past employers, he says the practice is fairly safe. And if the number is close to the market, employers rarely bother checking, anyway.

The tactic can backfire in a big way, however. For example, some companies will request a past pay stub as proof of your earnings. And, in other cases, fate can intervene. Mr. Netkin recalls one candidate for a position with an air-conditioning company who inflated his pay and lied about having a company car. "By coincidence, someone in human resources at his old company worked in HR" at the new company, says Mr. Netkin. "She blew the whistle on him, and he didn't get hired."

5. "Win their hearts first."

No matter what's on your wish list, compensation experts say the surest way to get it is to convince the company that you're worth every penny. Be prepared, for example, to demonstrate your willingness to go the distance during early stages of the interview process.

Take Willy Ma of Buffalo, N.Y., who recently interviewed for a senior-management job at an air-conditioner maker's Chinese subsidiary near Shanghai. The president called him right before the Labor Day weekend and invited him to fly to China over the holiday and tour the facility. "He dropped all his plans and went," says Mr. Netkin, who helped recruit Mr. Ma. He says Mr. Ma's can-do attitude "won [the president] over completely." It paid off. When offered the position, Mr. Ma asked that the company pay to base his family in Hong Kong so his daughter could attend better schools there. The president was so eager to hire Mr. Ma that he approved the costly arrangement. He even paid for Mr. Ma to make two monthly trips to visit his family.

The moral of the story, says Mr. Netkin: "Get them to fall in love with you, then spring your ridiculous requests on them."

6. "Timing is everything."
Successful negotiations require restraint, and nothing works against you more than giving your suitor the impression you're impatient or greedy. As such, it doesn't pay to raise specific compensation requests until the final interview stages. "The time to bring it up is when it's clear they're ready to make an offer," says Search Masters' Mr. Jensen. That said, it's important to get a general sense of the salary range at the outset. Most hiring managers are more than willing to provide such information in a good-faith effort to make sure everyone's on the same page.

It's also crucial to bring up any nonnegotiable points early on. For example, when Mr. Bailey, the management consultant, interviewed for a senior spot at Washington-based Watson Wyatt, "I was very clear that I didn't want to be located on the East Coast. I told them that immediately." The company not only accommodated him, it assured him that he would be given the autonomy to set up his own office and work schedule in San Francisco.

When the time finally comes to dicker over salary, you'll know whether there's room to move, in part, by who presents the offer. "If it's the hiring manager, there's usually more room than if the human-resources vice president makes the call," says Mr. Jensen. He says smaller companies without a sophisticated human-resources department also are more likely to negotiate after making an initial offer.

"You need to listen for leading questions," he says. "If they make an offer and then ask, 'How does that sound to you?' or 'Tell me how you feel about that,' you know there's some flexibility."

Hiring managers usually want a response right away. But compensation consultants warn that you should avoid such pressure. "One of the biggest mistakes people make is to accept an offer too quickly," says Drake Beam's Mr. Bruccoleri.

Sure, you want to show enthusiasm. But there's no need to be impetuous. A polite "Can I sleep on that?" is almost always an acceptable response to any job offer. Besides, a little bit of coyness never hurts, so long as you don't leave your suitor at the altar.