CAREERS NOW 06-22-08

Negotiating in a Recession: Should You?

DEAR JOYCE: An attorney, I'm in the third round of interviewing for a job I want. Problem: My research warns me that the position's salary barely meets my low-water mark. Question: Is negotiating appropriate in a recession? - D.E.

Yours is a question without absolutes. For an answer, I turn to two experts: Michael Allen, a principal at Lateral Link (laterallink.com), a full service, elite legal recruitment firm; and Jack Chapman, a principal of Lucrative Careers, a salary consulting firm(salarynegotiations.com) and author of "Negotiating Your Salary: How to Make $1,000 a Minute."

Allen's comments are directed to those in the legal field, while Chapman's are aimed at professionals in all industries. They agree that a recession is not a negotiation killer but differ on some aspects of the question.

Does recession mean don't negotiate?

Allen: The fact that we are in a recession does not mean candidates should avoid salary negotiations - just be more tactful. The worse case scenario is the status quo; applicants won't know what they can get if they don't ask for it.

Chapman: Good times or bad, it's never wrong to ask. If you ask for the moon, in good times you might get it; in tough times, you probably won't, but unless you ask, you won't get anything at all.

Ultimately your compensation is a proportion of the total value you make for the company. If your contribution is $100,000, your salary is a part of that; if you make the company $1,000,000, your share is all the larger. You're not negotiating with "the economy," you're negotiating with a human being who's trying to make a buck.

Curiously, you might be able to negotiate higher compensation in tough times. In profitable times, a company may be content with average talent with the thought that "if it ain't broke, don't fix it." But in harder times, the attitude may be "We gotta get more expensive talent if we're going to make it."

What if base salaries are fixed?

Chapman: To find out if parity (paying everyone the same starting rate) is an issue, probe. "Is there a parity concern here, or is the company agreeable to paying differently for different sets of skills and talents? Whichever way the answer flows, you'll know better how to negotiate.

Allen: For those working in a lockstep industry where companies pay the same salary to every employee at the same level, it would be ill-advised to negotiate base salary in any case, but candidates can consider negotiating their total compensation by focusing on bonuses and reimbursements. These can be disguised in the form of relocation reimbursements, signing bonuses, full-year-end bonuses and reimbursements for money left on the table at a previous employer.

Is sharing competing offers a good idea?

Allen: An offer in hand gives a candidate leverage, so he or she should inform future employers of competing offers so that there's an incentive to match. Additionally, consider future compensation and articulate expectations clearly so there are no surprises down the road whether times get better or worse. Finally, know when enough is enough; you do not want to start off on the wrong foot or appear insensitive.

Chapman: I usually suggest that candidates use the phrase "compass points." While not entirely accurate, it seems to work when you say, "I have two or three compass points I use to point to a competitive salary." Name them: current offers, hearsay from recruiters, objective research (Salary.com, Payscale.com, Indeed.com), projected income/value I'll generate, urgency of filling the position, and so forth. In 30 years of coaching, I've only experienced a bidding war once; it worked but I'm not comfortable with it in general. So disclosing other offers is just part of a bigger compensation-fixing strategy.

Thanks to compensation experts Jack Chapman and Michael Allen for their wise and battle-tested advice.

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