Negotiating Into--or Out of--a Job Especially in tough times, it may feel like the employer has the upper hand. But you can improve the odds.
By Anne Schukat and Owen Thomas

(Business 2.0) – You may be plotting your next career move, now that business activity is picking up. Or, alternatively, you may be seeking an exit strategy because a planned merger or yet another round of cost cutting is putting your job in jeopardy. Whether the endgame is salary or severance, here's how to level the playing field. --ANNE SCHUKAT AND OWEN THOMAS

Getting More on the Way In

How to prepare:

DON'T START NEGOTIATING UNTIL YOU KNOW YOU HAVE THE JOB. Once the company has committed to you as its choice, you have more leverage because your interests and its are closely aligned--the company wants you to accept and to be happy.

MAKE SURE YOU KNOW WHAT SOMEONE IN YOUR POSITION GETS PAID. Look up statistics on or search to check out employment agreements from public companies.

GET INSIDE INFORMATION. If you have friends at the company at the right level, find out how you rate with others applying for the job and what recent hires have been getting.

NEVER REVEAL YOUR CURRENT SALARY. Instead, advises Jeffrey Hyman, who founded a career-management agency for execs called Canal Street Talent, let the company make you an offer and negotiate from there. If the employer tries to pin you down before committing to you, try this reply: "I don't have unreasonable expectations, and I'm sure we can work out those details."

After you get an offer:

DISMISS LOWBALL OFFERS IMMEDIATELY. "Respond quickly and simply: 'That's not in my range,'" advises Jeffrey Makoff, a San Francisco-based employment lawyer. But be prepared to back up your position with arguments that support the number you want. Makoff recommends trying something like this: "I understand that you can't pay more cash right now, and I respect that. Pay me 7 percent of sales with a $15,000 bonus at Christmas, and I'll be thinking about how to close deals in the shower."

EVEN IF YOU'RE HAPPY WITH THE OFFER, DON'T ACCEPT RIGHT AWAY. Take at least two days to mull it over, which will make the employer nervous and give you greater leverage.

COUNTER WITH A 10 PERCENT RAISE. If the employer is already willing to pay $200,000, another $20,000 won't break the bank. Again, justify why you should get more by illustrating the value you'll bring.

NEGOTIATE YOUR EXIT PACKAGE NOW. Yes, it sounds defeatist, but there's always a possibility that things might turn sour--so it's best to pack your parachute before you climb aboard.

If the company balks at your counteroffer:

REWRITE THE JOB DESCRIPTION. Assume more responsibility in exchange for more money.

FOCUS ON THE EXTRAS. Stock options and vacation days won't add to the size of your paycheck, but they are sometimes more palatable to employers than a boost to your biweekly nut (see "Don't Forget the Perks," below).

ASK FOR AN ANNUAL BONUS. Make sure you agree on measurable criteria and get it in writing. According to job search firm ExecuNet, 75 percent of offers include performance bonuses, averaging 28 percent of base salary.

Don't Forget the Perks

These goodies can make all the difference. Here's what you should ask for.

SIGNING BONUS: Even in these sluggish times, they aren't as rare as you may think--36 percent of last year's compensation packages included some form of signing bonus. It's reasonable to ask for an amount that will offset any annual bonuses, 401(k) matches, or deferred compensation that you've left behind.

BENEFITS: Remember to factor these in when weighing multiple job offers. A generous 401(k) match, for instance, can offset a lower salary. And an extra week of vacation is worth about 2 percent of annual compensation. Here, in particular, smaller companies without set policies should have some wiggle room.

STOCK OPTIONS: They're a double-edged sword for most companies. With the market down, options are again a valuable bargaining chip. But new accounting rules could soon make them a major drag on earnings. Ask anyway: A cash-starved startup is more likely to budge on options than salary.

OTHERS: Company cars and club memberships have fallen out of favor; they generate bad publicity. But perks like financial planning and education allowances are still widely available. A new trend: Do-it-yourself bennies, where the company gives you a "perks budget" and you decide how to spend it.

Getting More on the Way Out

Do you see signs that your company is headed for another round of layoffs? Worried that your boss has it in for you? It's always smart to have your exit strategy mapped out, and sometimes even to make the first move. When you're leaving, it's harder to align the company's interests with your own. But you may have more leverage than you think. Here's a good way to analyze the situation: The company wants to get it over with quickly, save money, and maintain morale. Yet it also wants to part ways amicably, to keep you from bad-mouthing it to recruits, joining the competition, or, in extreme cases, speed-dialing the SEC. So hang on to your bargaining chips--don't waive your right to sue, sign a noncompetition or nondisparagement agreement, or accede to anything else without first getting what you want.

The basics:

At companies that have already announced layoffs or want to reduce headcount through attrition, a buyout or early-retirement package may already be on the table. But even if there isn't an outstanding offer, you don't need to walk away empty-handed. Without using the word "resign," start negotiations by pointing out--indirectly--how much you'll save the company over the course of the next year by leaving now. (A question you might ask: "How are we currently approaching headcount reduction?") Include the following in any package:

SEVERANCE. Many companies offer two weeks' pay per year of service. That's not a whole lot of cash--especially since the average tenure for most employees is 3.6 years. So don't hesitate to ask for more than the minimum; you might get it if you can point out specific contributions you've made. Senior management and executives often get better deals--from 6 to 18 months of pay, even for short stints.

OPTIONS. If your options are underwater or not yet vested and you think the company's prospects might improve, ask to be kept on the payroll, perhaps by spreading your severance over several months.

HEALTH INSURANCE. Federal law says you can remain in your employer's health plan for up to 18 months--as long as you foot the entire bill. Such COBRA coverage is notoriously expensive, so ask if the company will keep you and your family on the plan at your current premiums.

OUTPLACEMENT. It's not unusual for a company to provide $5,000 to $30,000 for 6 to 18 months of services from a firm like the Five O'Clock Club or New Directions. Tip: Turn down an offer of free office space and instead ask for a longer period of career counseling. In most cases, you can just as easily work out of your home.

What else to ask for:

CONTROL OF THE TIMING. Unless you're so miserable that you're marking the days on the wall of your cell, propose a departure date that's six weeks to two months out, tying it to the end of a key project or other deadline. Even if the company says no, you go out looking like a team player; if it agrees, you'll collect three or four more paychecks before severance kicks in.

CONTROL OF THE NEWS. If your profile is high enough, the company may be obliged to announce your departure. You'll want it phrased so people don't think you were fired. Even those who aren't C-level pooh-bahs should make sure the e-mail announcing their departure to the staff is worded positively. Matthew Harrington, Eastern region president of PR firm Edelman, recommends skipping cliches like "seeking other opportunities" or "leaving for personal reasons," which by their vagueness set the rumor mill churning.

A CONSULTING CONTRACT. This can often be a win-win for you and your employer: It gives you extra cash, and allows the company some control over your future work product and your behavior (since you'll have financial incentive not to bad-mouth the company).

Legal Ease

How to avoid conflicts that could land you in court.

GET IMPERSONAL. If your boss balks at negotiating with you, ask HR to intervene. Sometimes a mediator can calm tensions. But this may be the time to bring in a lawyer to handle the negotiations.

REMAIN PATIENT. No matter how much money they're dangling in front of you, don't sign anything right away. Instead, ask your employer for 24 hours, which will give you time to contemplate your options and run the documents past an attorney.

DON'T CRY AGEISM. The 1967 Age Discrimination in Employment Act was designed to protect the rights of workers over 40. But that's not exactly how things have turned out. Since it's hard to make a case, few companies are cowed by the threat.

DEFEAT THE NONCOMPETE. Unless you plan to retire or change careers, dig in your heels when you're asked to sign the inevitable noncompetition agreement. While you may have to live with some form of noncompete in order to get your severance, refuse to sign anything too broad--you're well within your rights to ask that it be limited to certain fields or even to a specified group of competitors.