How Not to Move Back in With Your Parents
Employment & Internships Podcast Episodes
Job Offers & Negotiations
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Pete and Alex tell you all you need to know about job negotiations.
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This week's tip is written by featured contributor Chris Klein, Assistant Director of the Career Development Center and Arts & Sciences Career Services, Indiana University Bloomington
Getting a job can be a stressful process, so we often focus too much on the job search and getting the job offer. It’s easy to forget that you need to prepare for possible negotiation as well. Like any other skill, negotiation does not come naturally for many people. It takes practice, patience, and a fair amount of knowledge.
So where do we begin? Start by taking a hard look at your current lifestyle as a student and the kind of lifestyle you want to have as a working professional. Where do you want to live – in an apartment with roommates or by yourself? Perhaps in a small house with your partner? Also, what cities hold the best opportunities for you? Doing your research is always the first step in making any major decision; so let’s talk about what your research should involve, beginning with your budget.
Creating a budget is crucial for living within your means. To create a budget, you have to consider the following: net income, savings, expenses, and debt. Your net income includes your salary and other investments. Your savings includes money you set aside out of every paycheck toward your short-term savings (and long-term savings, if you can afford it). Expenses are broken down by fixed expenses (including: rent, utilities, transportation (fuel/parking), internet, phone, student loan repayment, etc.) and variable expenses (entertainment, eating out, clothes, gifts, hobbies, crafts, gym membership, laundry/dry cleaning, personal care, pets, etc.). Debt includes credit cards, mortgages, student loans, car payments, and any other major debts you owe. Once you have a comprehensive list of what’s coming in and what’s going out, you can determine your amount of disposable income, which is the amount of money you can spend on fun OR you can stash away for a rainy day. (Choose wisely!)
Once you know your budget limitations, you can calculate your projected salary needs and begin to prepare for negotiation. Your budget needs will be your baseline, and you want to prepare to negotiate ONLY AFTER you have received the job offer BUT BEFORE you have officially accepted the job offer. Once you have received a written explanation of the full salary and benefits package from the human resources person, think about your negotiation strategy. This includes researching the industry and the range for entry-level salaries. Determine how much your education, unique skills, work experience, and other qualifications are worth to the employer. Know what you want in advance of the negotiation, and be prepared to explain how you came to that conclusion (based on your research and proposed budget). You should know your bottom line and be prepared to walk away from the offer if need be. Keep in mind, though, that professionals do talk to each other; so be diplomatic with your acceptance or refusal of the offer.
Here is a list of items that are typically negotiable:
- Start date
- Relocation/Moving expenses
- Flex/Vacation time
- Training/education expenses
- Early reviews for bonuses
- Sign-on/Performance bonuses
- Geographic location
- Company car
- Compensation – salary, benefits (health and other kinds of insurance), company car, etc.
- Stock options (take partial ownership of the company)
- Professional development (conference, training, graduate/professional school courses)
Health care plans and retirement plans are generally NOT negotiable; so be prepared to discuss alternatives from the list above. When you are ready to negotiate, follow these steps: (1) Express appreciation for the offer provided by the employer. (2) Explain your reasons for your counter offer. (3) Talk about the length and quality of experience you bring to the table. (4) Describe how your education has specifically prepared you for the job. (5) Summarize your main points and, again, express your appreciation for their consideration of your offer. After submitting your counter offer, wait patiently for their reply.
Ready to put your skills to the test? Set up an appointment with your career services office to conduct mock interviews with your career advisor. In the appointment, be sure to express interest in discussing salary negotiation and discuss your strategy (if you have one prepared). It can certainly be intimidating your first time through. Be sure to practice at least three times so you become comfortable with the process and your reasons for negotiation.
To learn more about salary negotiation, refer to the following sites or speak with your career advisor for industry-specific information and to practice in a mock interview setting.
Links and resources available online:
- Career Development Center
- MoneySmarts Salary & Paycheck Estimator
- Salary.com – Salary info by profession/location; Cost of living wizard
- Occupational Employment Statistics from the Bureau of Labor Statistics
- Sperling’s Best Places
- Home Fair - Compare the cost of living in hundreds of U.S. cities
- CNN Money