Episode #41 – The Right Way for Candidates to Negotiate Money
Sharita: Welcome to “The Animal Health Employment Insider,” brought to you by The VET Recruiter. In this podcast, search consultant Stacy Pursell, founder and CEO of The VET Recruiter, provides insight and practical advice for both companies and job seekers in the Animal Health industry and Veterinary profession. The VET Recruiter’s mission is to help Animal Health and Veterinary organizations acquire top talent, while helping professionals attain career-enhancing opportunities that increase their quality of life.
In today’s podcast, we’ll be talking about the right way to negotiate money during the hiring process Welcome, Stacy. Thank you for joining us.
Stacy: Hello, Sharita. I’m glad to be here today.
Sharita: Stacy, we’re going to talk about a subject that job seekers and candidates find very interesting. That subject is how to negotiate money during the hiring process. Does this subject come up a lot in your interaction with candidates?
Stacy: It does, and unfortunately, not many candidates are aware of the best way to approach the subject of compensation. They don’t know how to negotiate money, and as a result, they put themselves at a disadvantage.
Sharita: How is that?
Stacy: The biggest mistake that people make when negotiating compensation is that they negotiate backwards.
Sharita: What does that mean? Can you elaborate?
Stacy: I certainly can. I’ll illustrate this with an example. This is something that happens on a regular basis. I’ll reach out to a candidate about an opportunity at one of my clients. The candidate is interested, but they don’t want to move forward in the process until they know what the compensation is going to be. Unfortunately, I don’t know the answer to that question because I can’t travel forward in time. I’m not trying to be funny, but in a way I am.
When I place that call to a candidate, all I know is a certain range that my client is willing to pay. I certainly do not know the final figure. And in fact, it’s a little ironic that the candidate is asking me what the final compensation figure will be.
Sharita: Why is that?
Stacy: Because they have more control over that than I do!
The amount of money that my client is ultimately willing to offer the candidate is largely dependent upon how well that candidate interviews. It depends on how impressive the candidate is. It would be like the candidate asking me, “Can you guess how impressive your client thinks I’m going to be?” I can’t answer that question, and there would be no point in me trying to answer it.
Sharita: Stacy, we may have talked about this before, but isn’t everything about the face-to-face interview tied to value?
Stacy: Yes, that’s right and value definitely plays a role here. The offer of employment that an organization extends to a candidate is based upon the amount of value that the company believes the candidate will bring to the organization. The more value that the company believes the candidate has, the more attractive the offer of employment will be.
Sharita: But some of that value is tied to what’s on the candidates’ resume, is that correct?
Stacy: Yes, that is true. However, not all of a candidate’s value is contained in their resume. If that was the case, then there would be no need for the interview process. Just about everybody can make themselves look good and sound good on paper. The interview process is necessary so that employers can evaluate the candidate to a further degree, including how the candidate will fit into the company culture.
Sharita: So what do you say to candidates who ask what the position will pay?
Stacy: I say, “It depends on how well you interview!” Some candidates don’t realize that the interview is an opportunity for them to “sell” themselves to an employer. They can have a direct impact on how much the employer is willing to offer. If they have a fantastic interview and the hiring manager is thoroughly impressed, then they can expect an attractive offer. There are two major problems associated with trying to negotiate money backwards like this.
Sharita: What are those problems?
Stacy: First, as we’ve just discussed, it’s pretty much impossible. You can’t ask an employer to negotiate before you’ve even interviewed because they don’t know anything about you. If you haven’t interviewed, you technically aren’t even worthy of being made an offer. You have to prove that you’re worthy of one before the employer will make one to you. Second, you put yourself at risk for losing leverage.
Sharita: Losing leverage? How’s that?
Stacy: Let’s say, for the sake of argument, a candidate wants to know what their starting salary would be. Also for the sake of argument, let’s say that the hiring manager provides a figure, one that’s “middle of the road.” It’s not low, but it’s not that high, either. So the candidate interviews, and they interview well. The hiring manager is impressed and wants to make an offer to the candidate.
The problem is that it doesn’t matter how well the candidate interviewed. They’re going to receive the offer that was given to them before the interview. The hiring manager might have been willing and able to offer $5,000 to $10,000 more based on the interview and how well the candidate “sold” themselves. But the hiring manager is not going to offer that much now, since they pretty much agreed to a figure already.
Sharita: I see what you’re saying. Even if the candidate was able to successfully negotiate money backwards, they would actually be doing themselves a disservice.
Stacy: That’s right, they would. One of the most important aspects of negotiation is leverage. You don’t want to lose leverage. When you lose your leverage, you lose your power to affect the outcome of the situation. In this case, by attempting to negotiate salary backwards, the candidate is trying to give away their leverage early in the process. But when it comes to negotiating salary and compensation, you want to keep your leverage all the way through the process, up until the very end.
Sharita: And the interview can help with that?
Stacy: It does. The interview can give a candidate even more leverage, so they have power to affect the final outcome at the end of the process. All candidates should understand this, and they should act accordingly.
Sharita: Okay, let’s talk this through to the end of the process. Let’s say that the candidate does things the right way and doesn’t give away their leverage. Will the subject of money and compensation come up during the interview?
Stacy: Yes, if the candidate is impressive enough, the hiring manager might eventually ask about compensation toward the end of the interview.
Sharita: What should the candidate do?
Stacy: Well, there are three main things they should do. First, don’t bring money or compensation up first in the conversation. Remember, as a candidate, your main job is to illustrate the value that you possess. It’s not to talk about money. After all, if you talk about money first during the interview, the hiring manager will be inclined to believe your major motivator is money. If they believe that, then they might also believe you’re at risk for accepting a counter-offer from your current employer. And if they believe that, then they’ll be less likely to extend an offer to you in the first place.
Second, if the hiring manager broaches the subject of money and compensation, do not give them a set number. Once again, this locks you in and you lose leverage. Instead, say something like this:
“Obviously, I am looking for your best offer, but career opportunity will weigh heavily on my decision. You have a range in mind that you are planning to pay the person in this position. I’d like to be somewhere within your range based upon my qualifications and what I bring to the table.”
Sharita: Won’t that look like the candidate is trying to sidestep the question?
Stacy: They are answering the question. They’re just not giving a specific number. If the candidate gives a number and the number is too low, then they’re losing leverage and possibly leaving money on the table. If they give a number and that number is too high, then they’re pricing themselves out of range. There’s no good reason to provide a specific number in this situation.
Sharita: What’s the third thing?
Stacy: The third thing is NOT accept the first salary offer that’s made unless you’re working with a recruiter.
Typically, an employer will not make their very best offer right away. That’s because company officials are under the assumption that there will be some negotiation involved in the offer stage of the process. In other words, they know they might have to increase their initial offer, so they want to provide “wiggle room” for themselves.
On the other hand, if you’re working with a recruiter, the recruiter should know what your expectations are and what the employer’s range is and will be able to negotiate a fair compensation package for both parties. I have an analogy that might help.
Working with a good recruiter is similar to working with a good real estate agent. If you were buying or selling a home, would you prefer to negotiate the deal directly with the other party? Probably not. Salary negotiations can get highly emotional, and the agent can take emotion out of the equation.
You don’t want to have an emotional discussion with the person who is about to be your new boss. This is part of the value that a recruiter can provide. So don’t negotiate money backwards. Don’t lose your leverage during the hiring process. And make sure that you interview well and communicate your value to the employer so that you receive the best offer possible.
Sharita: Stacy, thanks so much for all of this great information today. I’m sure our listeners found it to be very informative.
Stacy: Thank you, Sharita. I look forward to our next podcast!