Salary Negotiations: Avoid This $100K Mistake

Neglect this item when you negotiate salary, and you could lose a pile of cash. Yet, a lot of people never even bring this up during salary negotiations. Learn from what happened to a client we’ll call Michael–and don’t let this happen to you!

Michael gets an amazing offer

Michael jumped when offered an opportunity with a rapidly-growing Chicago firm. In a heartbeat, he left a job that was lucrative and secure and moved halfway across the country to get equity in this company. He had, of course, done his due diligence and found the company to be solid. He pulled the kids out of their circle of friends and headed for Illinois. The new job was fabulous, and Michael immersed himself in the work.

Then things went wrong

For the ten months, the company lived up to his expectations. But things quickly went south. When a competitor’s unethical business practices hit the news, his company was tarred with the same brush, though they’d done nothing wrong. The explosive growth stopped, and soon they were losing money.

Michael gets laid off

One day, Michael was summoned to a conference room and informed that the company was laying off several people—including him. Michael got a grand total of three weeks severance—after moving over 1300 miles to take the job. The company also provided “outplacement” that consisted of a lecture on how to write a resume. Looking back on the experience, Michael says he should have asked for more, but he was in a state of shock.

A long job search

Michael was so devoted to the job and the company, that he hadn’t thought about taking steps to build a network in Chicago. Building a network from scratch was very time consuming, and it took another eight months to land another job. This extended period of unemployment cost Michael well over $100,000 and nearly depleted their savings.

Salary Negotiations Lesson?

Be sure to put severance on the table during salary negotiations. Many people don’t feel comfortable asking about severance, but the alternative is to end up in the same sinking boat that Michael found himself in.

How to negotiate severance?

Here’s the coaching we gave Michael on how to have this conversation when he got the next offer. Michael:  I’m really impressed with this company. It looks like you are in great shape and getting better. The Boss:  Absolutely. We are an outstanding company. It’s a great place for you to build a future.
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Michael:  It seems that way to me too, and I’m sure I’ll do a great job for you. But I do have a concern. I don’t imagine that you anticipate a merger, buyout or some other change that might endanger my position, do you? The Boss:  No way. There is nothing like that being discussed. Don’t even think about that. Michael:  I thought as much. So I imagine you won’t object to a severance agreement that would protect me if something unanticipated like that were to actually happen. With our help, Michael got a compensation package that protected his interests: several months of severance, a good outplacement package, and an extension of his medical benefits.

What Should You Ask for During Salary negotiations?

Typically, companies will pay one or two weeks severance for each year of service, outplacement, payment for accrued vacation, and an extension of medical coverage. However, a top executive might negotiate several months severance, particularly when there are special circumstances like Michael’s where he moved a great distance to accept the position.

Finish off Salary Negotiations by Getting It in Writing

Any time salary negotiations extend beyond salary and a standard benefits package, it’s a good idea to protect yourself by getting a written agreement. Should the company official object, tell them something like this, “It often happens that people in the same conversation come away with a different understanding of what was discussed. I’m excited about working here, and it would be a shame to start off badly because we’re not clear about exactly what we’ve agreed to.” Should the boss still refuse, you can the boss a letter summarize your agreement. This letter can be enforced as though it were a contract.

Don’t worry that you’ll sound ungrateful or even desperate

Getting an agreement about severance is smart—and it can save you many thousands of dollars if things change at the company. Want to discuss your career or your negotiations? Contact us today.

Free Career Services: How Wendy Blew Thousands of Dollars

Free career services. Like many things that seem almost too good to be true–they often are. There are a lot of free and low-cost services available. Universities have them for alma mater. Many church and community groups offer them as well. But beware.

[To be fair, the quality of services varies considerably. Some universities and community groups do great work. We tend to hear from people who had bad experiences].

Wendy loses a job offer  

After setting a meeting with us, Wendy found that a neighborhood nonprofit offered services free of charge. She promptly cancelled our meeting, especially since people advised her to never pay someone to help find a job.

Mostly, the organization offered workshops on topics like networking, LinkedIn profiles, and job interviews. She learned a few things. So far so good.

She also was assigned a volunteer coach. He examined her resume and had a few suggestions. But she found her coach wasn’t helpful when her networking broke down. For some reason, no one was referring her to others.

 

Mostly, they offered workshops on various job search topics 

Later, when she wondered if she was going in the right direction in her search, the coach wasn’t sure.

When she finally got an offer, she remembered how one of the presenters had encouraged women to demand fair pay. Wendy made a clumsy push for what she thought was fair compensation. Unfortunately, she priced herself too high. The boss told her she was arrogant and retracted the job offer. Ouch!

It took her six expensive weeks to get another offer.

David attends a church-based career ministry

I overheard David, an astute executive from Kenilworth, talking to some other executives at a job support group. He said, “If you can afford it, I recommend hiring a personal coach. It was worth every penny.”

I asked David about this, and he raved about his coach (a colleague with another company). He said before he hired her, he had gone to a church-sponsored career ministry. An extremely-low fee entitled him to meet with a coach for one hour a week. It seemed like a no-brainer, so he paid the money and soon met with his first coach.

David was impressed. The coach understood David and his issues and they had a great rapport. Since the meeting was limited to an hour, they didn’t get a lot done, but David was excited about this coach.

Unfortunately, when he asked about setting another appointment, this coach said he was very part-time —and a popular coach—so he wouldn’t be able to meet again for four weeks.

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David frowned. That seemed like an awfully long time, but he made the appointment.

David gets passed from coach to coach

While waiting for that meeting, David scheduled a meeting with a second coach. He spent most of the hour repeating what he’d said to the first coach. The advice he got seemed formulaic and irrelevant to his situation. David decided to try a third coach for the following week.

Again, most of the first meeting was spent covering the same ground. That was frustrating, but he thought this third coach was reasonably good, and scheduled a second meeting. But a freeway accident held up traffic and he arrived almost 30 minutes late for this meeting. Consequently, he only got a half hour meeting.

Finally—the First Coach Again

David was looking forward to meeting with the first coach again. Sure enough, the coach delivered. He found the time extremely helpful.

But then, the coach let him know that because of vacation and a heavy workload at his regular job, he wouldn’t have time to meet for six weeks. Not only that, but David found there was no coach available to meet with him the next week.

David calculates his losses
David sat down to evaluate what he was doing. Yes, he saved a few thousand dollars. On the other hand, he had been making very good money—well over the six-figure mark. Every week he was out of work cost him more than $2,500.

He decided to forego the church ministry services and hired a coach to help him.

Here’s what David said about the benefits of hiring a coach:

  1. Access. The coach was available to meet with me on a regular basis and didn’t limit meetings to one hour. Together with this coach, I got my job campaign moving.
  2. Customized advice. Instead of formulaic advice, I got customized and pertinent advice.
  3. Continuity. Instead of revolving-door coaching, I consistently met with a woman who understood me and my needs.
  4. Expertise. My coach wasn’t just a well-meaning volunteer. She was a professional who kept me on track and assisted me with some difficult issues.

In summary, a less-than-stellar job campaign can damage your self-esteem, professional credibility, lead to immense frustration, and cost you a lot of money to boot.

If you want to talk about coaching, contact us today. Ask about our Career Action Plan Meeting—a 2-hour, low-cost meeting to examine your career as a whole and your immediate situation and develop a plan.  847-673-0339

 

[author] [author_image timthumb=’on’][/author_image] [author_info]Steve Frederick and Jack Chapman of Lucrative Careers have helped thousands of professionals to find work they love with great compensation. [/author_info] [/author]