Salary negotiation is something at which hiring managers are usually a lot more proficient than the people they hire. In the interest of leveling the playing field, here is a method for salary negotiation that has worked for me and many others.
Noel Smith-Wenkle is a headhunter, and he taught me this method in about 1982. Headhunters' fees are proportional to the salary that their clients get, so it is in their interest to get as much as possible.
Disclaimer: This method was tuned for the hiring climate for sought-after software developers in Silicon Valley in the early 80s, so it may not work for any given situation. However, I think the principles have general applicability. Your mileage may vary.
Salaries depend mainly on two things: the work and the geographical area. Most companies share salary data with each other: the typical big-company personnel department will have detailed breakdowns on the distribution of salaries for their types of work and locales. So they will generally know within a pretty narrow range what your job is worth.
To save labor costs, almost all companies play a nasty little game. They ask you how much you want. Sometimes there's a slot on your application named something innocent like "desired salary range." Most people automatically fill in all blanks on a form, so they'll put down a figure.
Unfortunately, many people underestimate their worth, so they'll put down a low figure, less than the company was prepared to pay. It's a rare company who will offer you what you're worth in this situation. Some companies will even bargain down your already undervalued amount.
You're happy because you got what you asked for (or nearly so), and they're happy because they're underpaying you and you're not likely to realize it.
So, the bottom line is: Don't tell them how much you'll take.
Before you begin negotiating, you must have a minimum salary figure in mind. If at all possible, you should talk to several people who are doing similar work in an area with similar living costs. Watch out! People from rural New Mexico, for example, have no idea how ungodly expensive it is to live in the Bay Area or Boston.
Remember the bottom line, though: have a minimum figure in your head, but don't tell them.
The purpose of the method is to get the company to be the first party to name a number. If it's above your minimum, you accept. If it's too low, you tell them it's too low, but you do not say by how much. They will either break off negotiations or come back with a higher offer. Your only responses are either "okay" or "higher", never "X amount higher."
If they try to get you to name a figure on the application, leave it blank. You want them to ask for a number verbally.
Step 1. The first time they ask you how much you'll take, reply:
I am much more interested in doing (type of work) here at (name of company) than I am in the size of the initial offer.This sentence is constructed with great care. You may want to memorize it. It does several things for you. It's great public relations. The vast majority of people answer their question with a number. Because you have focused on the job and not on the compensation, you have instantly distinguished yourself from the thundering herd. You have also dodged their question.
Noel said that about 40% of the time this is all you need, and the hiring manager will go off and look up your numbers and make you a fair offer. However, over half the time, they will ask you again.
Step 2. The second time they ask, reply:
I will consider any reasonable offer.This is basically a stalling tactic. The word ``consider'' has a lot of leeway in it. Add to this the large amount of slop in the word ``reasonable,'' and obviously the sentence has no meaning at all. But you've been polite, and once more you've refused to name the first figure.
Noel said that in only about 30% of the cases was it necessary to go to step 3.
You are in a much better position to know how much I'm worth to you than I am.Once again, you have been polite, and again you have refused to name a number. You have also told them, in so many words, that you are onto their little game. If they ask a fourth or even a fifth time how much you'll take (Noel said it rarely happens), repeat step 3.
This is the end of Noel's method. An anonymous contributor suggests this fourth step for cases where repeating step 3 does not work: “Is there a reason that (company) would not be able to make a competitive offer?” (Warning: I have not heard any results from trying this.)