Financial Literacy - Careers
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How to negotiate a compensation package

Imagine that a hiring manager offers you a job.

Do you lunge at the opportunity? Before signing an acceptance letter, take time to finesse a sweet compensation package from your prospective employer.

The problem for many job seekers, though, is they would rather go to the dentist than talk about salary and benefits.

They may be afraid that if they ask too many questions, they won't get the job. Or they may not understand the benefits package because some can be fairly complex, says Michael Zwell, author of "Six-Figure Salary Negotiation."

Zwell, a human capital consultant who heads Zwell International in Glenview, Ill., says job seekers who don't negotiate or ask questions are likely shortchanging themselves, especially if they don't know the salary range of the job position or the value of the benefits package.

The reality: Both may be malleable, which is why negotiating a good compensation package is the culmination of a successful job search process.

Follow these tips for negotiating the best deal possible.

Get the best deal
  • Delay talking salary
  • Know your true value
  • Start at the midrange
  • Negotiate the perks
  • Take time to evaluate the offer
  • Get your offer in writing

Delay talking salary

Most people work for the almighty paycheck, and while there's nothing wrong with that, some experts contend it could turn off potential employers if you broach the topic of salary too early.

"The general rule is that you don't want to talk about compensation until very late in the process," Zwell says. "If you talk about money too soon, it raises a red flag to me that you're not interested for the right reasons."

That doesn't necessarily prevent hiring managers from asking job candidates to name their price during the initial interview.

Avoid the temptation to commit to a salary during your first meeting because if you come in too high, the employer may shift focus away from all your skills and focus solely on salary, says Joe Kilmartin, managing director of compensation consulting for Salary.com.

"That puts severe limitations on you because you might be a complete superstar, but they're not focusing on that anymore," says Kilmartin. "They're focusing on whether you're worth $100,000."

The initial interview is a time for employers to find out as much as possible about you, and you should likewise use that time to find out as much as you can about the corporate culture and working conditions before you commit to working there.

Know your true value

The best way to prepare for the inevitable salary question is to do your homework and know what you are worth in a given job market.

"Most people, not just job seekers, but currently employed people don't have a good understanding of how valuable their benefits are," says Julie Stich, a senior information and research specialist with The International Foundation of Employee Benefit Plans in Brookfield, Wis.

She says the cost of benefits, including the money the employer contributes for Social Security, unemployment insurance, worker's compensation, health care and pension added together can be 30 percent or more of the payroll.

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