Ebenezer Scrooge
Ebenezer Scrooge
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 2010 HALLMARK { SCROOGE McDUCK AS EBENEZER SCROOGE } SECOND IN SERIES ORNAMENT  US $20.00
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Jim, an operations VP had two company turn-arounds on his resume. He figured his upcoming offer would be $175,000 base and 30% bonus plus benefits and perks. H.R. Called him with a $135,000 initial offer. He called me - angry. "They know my last salary was $160K. Are they trying to get me cheap? Don't they understand what I can do for them?
Many execs call getting a low offer being "Lowballed." They often feel offended at the low offer which can lead to giving up on negotiating or walking away from the job altogether. But a low offer is not an insult. It's just a low offer: a starting place from which you can get a better one.
In baseball a "lowball" is a worthless pitch. The pitcher hopes it will fool the batter into swinging. The batter doesn't take it personally. High ball, curve ball, fast ball, strike! It's just a pitch. Even if the catcher called it because he knows it's the batter's weak point, the slugger still doesn't take it personally.
Back to Jim's situation: "I can't afford to turn this job down. I've been job hunting for eight months and they know it. But this is a real lowball offer." What should Jim do next?
Let's look at an ATTITUDE adjustment first, then the ORIGINS -- where "lowball" offers come from, and finally, ACTIONS -- what to do about them.
ATTITUDE:
Free enterprise cuts both ways. You can't have the freedom to negotiate a great package without the company having the freedom to seek its best bargain.
To be competitive companies must negotiate the best they can. That includes labor costs.
When it comes to their product, companies are supposed to get the best bargain they can for their raw materials, labor, manufacturing machinery, plant, etc. They are expected to negotiate the best the market will bear. So, don't take it personally if they start low with you.
Wal-Mart became the giant it is today by "lowballing" its suppliers, then passing the low prices to consumers, attracting customers away from other stores with its good deals.
So, don't take it personally! It's how the system works. They want you for the lowest price possible. Understand it's a game.
Don't let your self-esteem get in the way. Step up to the negotiating plate and play ball! Do what the baseball player does: don't get upset, just check your swing and let the umpire call "Low! Ball one!"
ORIGINS
Let's look at why the employer might start low. After all, if you're a candidate they want, they surely don't want you to walk away. Why not skip the lowball and throw a "strike at the knees"? Five reasons follow: Blooper, Mismatch, Scrooge/Trump, Parity, and Performance.
"Blooper. Sometimes they make mistakes. Sometimes even by a big margin. It can be a miscommunication between the Hiring Decision Maker and H.R., or a new position they priced like an old one, a calculation basing this new salary on your previous earnings, or any of a number of mistakes.
"Mismatch. Another kind of mistake is a miscommunication between you and them. The [big] job you think you're negotiating for just isn't really all that big. In this case the lowball is a good thing. It's an alarm warning you that you need to expand their idea of the size of the job to match the size of your contribution.
"Scrooge/Trump. They could be playing "hardball": negotiating as Ebenezer Scrooge and Donald Trump are portrayed. Is the lowball you received a Scrooge-like starting point? No problem; you can still negotiate your full value.
"Parity. Sometimes a company says they "just can't pay you more than" your colleague. I coached an auditor from a Big-Four accounting firm to negotiate for compensation as a "second-year-man" because he would be handling that level of responsibility. The company's stonewall reply was that anyone in their first year is paid the same to start with. Even though the company did not move to a second year ranking, we were able to negotiate an early review.
"Performance. A lowball salary might be able to be balanced with a high incentive package. Since you're being asked to take more risk if the base is not high, so you should negotiate more reward when you hit the incentives. Secure that reward with a carefully written compensation plan.
ACTIONS
The strategy for hitting a low ball is to calmly figure out where the pitch is coming from. By acting neutral, you'll set the stage for getting intelligence to inform your negotiations. Typically, your response to a lowball offer will be a "highball" counter offer, but not right away! First find out what the employer is thinking.
Ask for clarification about the job responsibilities first, to make sure you're both talking about the same deliverables -- no mismatch. Then ask for their rationale behind the number. Knowing how they arrived at the low number will help you identify which reason [above] fits their opening gambit.
Once you know the reason, you can make a counter offer that addresses the lowball reasons.
We assume that you have done your homework and have three numbers ready:
--Ideal: the biggest package you can make a case for,
--No-go: the number where you'll break off negotiations and suggest you both come back later,
--and Satisfactory: in between Ideal and No-go.
Start with your Ideal, and your thinking behind it. To soften how big it is, present it as a target, not a demand.
What if you can't afford to say no? Do a "lock down" before you share your counter offer. Something like, "Well, the offer is low, and I'm confident we can reach a package that we're both satisfied with, but it will take a little bit of creative thinking and discussion. The offer as it stands is a firm one, right? I wouldn't jeopardize the job by seeing if some things about it are negotiable, would I?" Then finish your negotiations.
Finally, take that job and "hit it out of the park!"
Jack Chapman, is known as "The Salary Coach." Jack has personally coached well over 2,000 individuals. His e-book "Negotiating Your Salary: How to Make $1000 a Minute", is available through from his web-site: http://www.salarynegotiations.com, for instant delivery. The hard copy version is available through Amazon.com and local bookstores. For information about all of Jack's best-in-class career workshops and webinars, including free offerings, see Jack's site: http://www.lucrativecareersinc.com For salary or career coaching Jack can be reached at jkchapman@aol.com.
Working with professional clients since 1981, Jack has become nationally known as a career adviser and speaker in the field of career development. He has both a nation-wide and international clientele and has conducted hundreds of seminars. Jack works with clients in two ways: First, to become more satisfied and better paid in their careers, and second, to systematically manage their careers to achieve financial independence. Through Jack's efforts he has helped over over 200,000 people