After guiding thousands of clients through the salary negotiation process, I’ve noticed that when most people begin to negotiate a job offer, they focus on the base compensation and ways to improve it. While you may be able to improve the initial offer, you may not be successful getting to your “magic number” without being a bit more creative in how you approach the salary conversation. Compensation is made up of two types: fixed and variable.
Fixed compensation is the range of salaries the company has determined they can pay for a certain job. For large companies, in particular, these ranges are very structured and it can be difficult to negotiate outside of the salary range. Variable compensation represents other forms of financial rewards that companies can employ with more flexibility. The pool of variable compensation dollars can be leveraged to entice new recruits to the organization and engage the existing workforce.
By thinking more strategically about your approach to compensation and thinking creatively, you can craft a negotiation strategy that leaves less money on the table and more in your pocket. Below are four items to consider negotiating to improve the offer.
1. Sign-on bonus. A sign-on bonus is a one-time compensation incentive given to a candidate to improve the quality of a job offer without impacting the salary range. Generally, a sign-on bonus is given to a candidate who is giving up something; perhaps leaving a current employer and foregoing their merit increase, bonus, or vacation time. But candidates who are in transition can also try to negotiate a sign-on bonus and may attempt to do so as a way to improve an offer when the employer cannot offer a higher base salary.
2. Spot rewards. Spot rewards represent money given to an employee for achieving a specific goal or project milestone. They are used as a way to motivate and engage employees and provide monetary recognition in real-time of the event, rather than waiting until the employee’s annual review. But candidates may be able to negotiate a spot reward based on certain goals they believe they can achieve relatively quickly for an employer.
By the time you are negotiating your compensation package with the employer, you often have a good idea of what their main challenges are. If you can create a roadmap for addressing those challenges with a firm completion time, you may be able to secure a spot reward. Examples of situations that might warrant a spot reward include increasing sales, decreasing costs, revamping a product, or improving a process or system. If you can prove that you can make an impact early on, the employer may be willing to negotiate a spot reward contingent to your completion of the effort.
3. Termination benefits. It may seem odd to be negotiating for what you would be entitled to on the way out when you are still trying to secure a place in the organization. But due to the new reality of work and the fact that people aren’t staying at companies as long as they used to, negotiating these benefits up front makes perfect sense. Benefits that you can negotiate include additional severance or outplacement services in the event your job is eliminated due to a business reason. You can let the employer know that you expect to have a long and fruitful career with them, but given the volatility of the industry, economic factors, your experience going through your last transition, etc., you would like to explore options for negotiating your termination benefits up front.
4. Additional vacation time. If you had long-term tenure with your previous employer, it’s possible that the amount of vacation time the new employer offers will fall short compared to what you are accustomed to. Negotiating additional paid vacation time may be a consolation to you when you can’t improve the salary. And if having the additional time is what’s most important to you, you can also try to negotiate additional unpaid time to help support the work/life balance that you may value.
At the point where you are negotiating your compensation package, you have leverage. The employer has decided they want you to fill the role, and they want you to be happy with the offer. Salary negotiation is a very collaborative process. You may not be able to negotiate for everything you ask for, but by being open to exploring different options, you are more likely to reach your compensation goals.
This post was first published on Forbes.
