Why package negotiation is like playing Tetris

Wednesday, June 1st, 2011 - salary negotiation

Why package negotiation is like playing Tetris

Tetris Buttons @ Maker Faire 2011
When I speak to job seekers or job applicants, and explain that although now they are the preferred candidate, the hardest work starts, they seem confused. The problem is that you are not employed in a new job until you have signed the contract of employment, and that means package negotiation.

I was talking recently to a friend who is in a career transition, and she was getting confused by all the options that she had in front of her. We talked through a few choices, but she either dismissed them or was reluctant to take them. When I asked her why, she felt that these requests would never be acceptable.

It was then that I explained to her that package negotiation is like the computer game Tetris. While you and the hiring manager both know what the end game is, the odd shaped pieces you are working with need to be fitted together in team work, to be able to reach a mutually acceptable outcome.

What’s an acceptable package?

The first question any job seeker should be able to answer, is what’s an acceptable outcome in terms of an employment package? There are four key areas:

  1. Money: what’s the minimum that you can live on (include travel costs!). What’s the market paying presently for that skill set?
  2. Geography: where is the job, how accessible is it/will you need to move?
  3. Skills: what additional skills or qualifications will this job give you, that will hence advance your career?
  4. Title: amazingly, many job seekers place this high in their list of priorities. In reality, its should be the lowest priority for all bar those who want bragging rights in their local pub

Before starting any job search, you should have answers to all four of these questions. If you don’t, then how do you know which is the right job for you?

What does the company offer?

It amazes me how often job seekers do not do their research on companies that they are applying to. Often I speak to job seekers who have always dreamt of working for CompanyX, and then with a little research find that CompanyX doesn’t work internally quite the way their brand portrays them to their customers externally.

Culturally, its hard to be one thing internally, and another externally, unless the company is itself going through a period of transition or fast change. If they are, that should be a sign to stay away, as its often means that the company is in trouble.
However, big brands can often afford to pay less, because they have numerous customer fans who want to become employees. In the fast food industry, the number of those who buy a burger, and then are happy to flip burgers and ask “do you want fries with that,” are wholly proportional. Hence often, the best financially paying packages are available from strongly growing mid-market companies, over the brand leaders.

However, the one thing big brands have over others in their market is brand power, that works not only on their customers but also on their competitors. For instance, British Airways is one such brand that employers in the airline industry like to see on a job applicants Professional CV, as is Marks & Spencer or Tesco in retail, HSBC in banking, etc. Although these employers may not offer the best package on a financial level, their training and systems can propel your career for a number of years after you have left them.

The soft and hard edges of negotiation

When entering a package negotiation, you have to remember that certain thins are hard, and others are negotiable.

Firstly, if you have set any precedents in your job application up to that point – for instance that you live in the local area, and that commuting is not a problem – to suddenly turn around and ask for a relocation package is not possible! Think about what you were asked and said about package issues.

Secondly, pay levels in corporates will be hard and centrally controlled by HR, while other issues will be soft and easy to gain. The bigger an organisation the more controlled packages will be at certain levels, but only on financially measured levels. Hence pay needs to be in a range between X and Y. You should have tested these levels during your job interview, by outlining your package requirements, and getting the employer to confirm that should you be offered the job, that they can match these requirements.

So that leaves the negotiables, which is pretty much – everything else! Easy things to win include bonus multipliers, pension contributions and training budgets. Training is one of those budgets in a corporate which is hard to get hold of at the start of the fiscal year, and being chucked at everyone at the end, often because this years “big plan” made way for operational reasons.

Finally, don’t forget transitioning. Time scales and costs of such – not relocation, but costs of loss of income from a bonus, or admin charges around pensions transfer if the new employer insists on such – are all easy win negotiables.

Fitting it all together: Tetris!

At this point, I wish that there were a nice set of definable rules as to how you gain your required outcome, but simply the set of priorities is as close as anyone can get. Secondly, when we are talking about human beings, then emotions get involved, and if your domestic partner says “just sign the contract,” most often as the job applicant you will.

The key is, to test the options. While always remaining realistic in your requests and stating that you do want to work for that company, when you are in package negotiation, job application goes from a “you chasing them” to a “them chasing you” phase. So always test the options, and test the shape of the pieces you have been given/they are offering.

As I said at the start of this piece, although as a job applicant you may be the preferred candidate, there is still a way to progress to employment, and your first day in your new job. However, if you keep the end game result that both you and the employer want, and think about this phase as a game Tetris in your mind, all should be well.

Good Luck!


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