Negotiating Offers MIT Fall 2011

Today Katie Somers –Career Assistant, MIT Global Education & Career Development Tom Hendrix –Senior Consultant, Stroud 1 hour. Interactive. Thought provoking. –Questions and discussion encouraged

How many of you…. …are planning on working after MIT? …are currently in a job search? …are currently considering offer(s)?

Would you accept this job offer? NOW HIRING Working with the best people in the world 13 hours/week (or more if you want) Live wherever you want –And there are no taxes there –Travel as much or as little as you like 14 weeks vacation/year $350,000 /year and 50% bonus Expected raises of 25% each year Full benefits Free parking and there’s never any traffic on the commute Call _________ Me Too!

Key point for today: get the career combination that will be happiest for you Key thoughts on negotiating: 1.Know what you want 2.Get the facts 3.Seal the Deal

1. Know What You Want What is going to make you feel successful in your job and in life? What are the most important elements that I want from my career?

Determine what are you willing to live with and without Decide which issues are important to you and why A job offer involves more than just salary Assign weights to each issue Think about your alternatives Know What You Want

1. Know what you want Recruiting processes are about more than just finding a job Make your search process about finding a career that you truly enjoy –And an organization in which to pursue it This is especially true for you: talented graduates who will be sought after and who could take any number of paths

Consider the whole package The Career Package The Work The People Other Title, prestige Commute Growth Base Salary Starting Future Bonus Salary Vacation Allotted Actual Benefits Medical, etc. Cost of Living Hours Week Weekend Key Points: Know what matters to you – build your own wheel Look beyond just the salary number Avoid the “comparison trap”

The Comparison Trap I want….. HoursPersonal Growth SalaryVacationFameDiscovery Factor Public Service Teacher XX Investment Banker X Researcher XX Consultant XX Tom Brady XX Judge X Dentist NO!

Questions to Consider What is going to make me feel successful? What are the most important elements that I want from my career? What exactly will my day to day responsibilities be? Is the day to day work going to challenge and excite me? How will my value to the company and the market change over time? What opportunities will I have to develop? Who will I be interacting with? Will I enjoy working with my colleagues? What is “the package” and how does it stack up to what I want?

GECD Graduating Survey Look at what’s #14 You don’t have to agree with this order Consider the whole picture, though

2. Get the Facts Just focusing on salary for a minute: Which is better: $50K to start with 15% annual raises, or $60K to start with 3% raises?

Even just focusing on salary for a minute… What affects starting salary and growth rate of salaries?

2. Get the Facts BEYOND just money …and find out why something has to be true –An example: Developing the company’s people The best way: Ask questions of your prospective employer …even if you’re afraid they might make you look bad Ex: Weekend working required/expected? –“No – weekends are yours.” Great! –“Yes.” Better to find out now than a few months into the job.

How much (in dollars) would you trade for an extra week of vacation? Suppose you make $52,000 per year. Now suppose you make $104,000 How much would you spend on flights, hotels, entertainment etc. on that vacation?

Case Study ● Base salary - $70,000 ● Parking ● $70 per month ● $840 per year ● Medical & Dental benefits ● $100 per month ● $1,200 per year ● No vision insurance ● $200 per year on eye care ● No bonus opportunity ● No 401k match ● Base salary - $68,000 ● Parking – free ● Medical, Dental & Vision ● $80 per month ● $960 per year ● Bonus opportunity ● Average of $6,800 per year ● 401k match ● 2% of salary ● $1,360 per year

Case Study $70,000 – base – parking - 1,200 – medical & dental – vision Equals $67,760 net annual base $68,000 – base – med, dent & vision + 6,800 – bonus + 1,360 – 401k match Equals $75,200 net annual base

Other factors And consider the size and quality of what you get for that rent… Source: Rentbits.com October 2011

Other Sources For Facts People you know in the company or industry –Teammates, classmates, family & friends… Other current employees (besides the one interviewing you) –Just ask for contact info of someone in the position you’re interviewing for or similar level –You can tell a lot just by talking to them Career services offices The web can be useful, and can be misleading –Proceed with caution

3. Seal the Deal How many of you… …think that you should always negotiate a job offer? …think that you should never negotiate a job offer? Most employers expect negotiations But... Only about 25% of job applicants actually negotiate Copied with permission from “The Art and Science of Negotiation” Rebecca Bryant, PhD, Graduate College, University of Illinois

3. Seal the Deal: Advice on Negotiating Decide whether or not to negotiate –Is something else out there really better? –What’s the gain for you? For the Employer? Treat it as a conversation to find out more, rather than a me vs. you competition –Seek to understand the reasoning. Companies don’t make offers arbitrarily. Also: –Consider your definition of success. Would it be met with a “Yes” or “No” from this conversation? –Bring your facts, and remember that the other person has facts too

What Stroud considers when making offers: Competitiveness in the market for talent –What others are offering The career package that suits our culture Fiscal responsibility, long term health of our company We have a lot to gain and a lot to risk in any hiring decision –You might be our best consultant ever and we want to grow our business –Bad hires are personally and professionally difficult

Negotiating: Engaging openings I would engage in this conversation: –“I’m considering several offers and I want to make the best choice for me.” –“These are the factors I’m considering.” –“I like what you’re offering me on ___, ___, and ____. –“I want to know if we could change ___.” I wouldn’t be as happy to engage in these conversations: –“Can’t you do better than that?” –“So-and-so is offering me $4k more. Can you match?”

Points to Remember Choose the offer that best meets your career goals and lifestyle values Assess your skill value in the marketplace Focus on the compensation aspect most important to you Look at the “big picture” and the future value of an offer

Questions / Comments / Feedback More information and background reading on negotiating: GECD: *****Katie’s contact info ***** Contact Stroud – –Tom: Happy to talk after the session See my profile on LinkedIn Business cards at the back

Outline Key point: get the combination that will be happiest for you About Tom and About Stroud Poll the audience: seniors/grads/underclassmen, currently searching/not, have offers they’re considering? Negotiating: 1.Know what you want (as best you can): –Questions to consider for the right career (engage the group here) See list on slide, below About Salary: think of the initial offer, think of the long term –Look at the drivers in the company Eg: hire for 2 year employees: less incentive to actually develop them 2.Get the facts –Ask direct questions in the interview, even if you are worried might make you look bad (eg weekends) –Salary facts can be had and… Employers have them too Reporting can be flawed (ex employees, small sample sizes…) 3.Sealing the Deal –What Stroud considers when making and negotiating offers –Opening statements I’d happily engage in –Tips for negotiating