How to negotiate an IT job offer

This moment doesn’t come often, so it’s important to ensure not only that you are well compensated for your future work but that you succeed in your new role.

Everything from your salary, to the team you’ll work with, to what happens if the plan goes wrong is on the table right now. “Before you sign is the moment you have the most leverage,” says Brooks Holtom, professor of management and senior associate dean for finance, strategy, and organization at Georgetown University’s McDonough School of Business. “Once you’re in, you don’t have that same power.”

You might be a pro at negotiating with contractors or suppliers. But “people are not inherently good at negotiating a job offer,” councils Shawn Cole, president and co-founder of Cowen Partners Executive Search. “It’s uncomfortable.” But negotiating and advocating for yourself does not mean you have to be adversarial. “The objective here is that you don’t burn any bridges. After all, you are — hopefully — about to work with these people.”

To get your head in the game, I spoke to people who are good at this, those who do it every day and who know how to get what you want — and who know you need to ask for a few things you didn’t know you wanted.

Put your values on the table

Before you start going bulldog negotiator, know what your priorities are. By now, you probably know the salary range and compensation you are willing to accept. But do you know why you want this job?

Is there a team you want to work with, a technology that excites you, a location that appeals, a challenge you’re eager to take on, or a benefit you need? That’s your value system. That value system matters more to your negotiation than comparable salary data or compensation package comparisons.

“I’ve seen candidates who value health care because their wife has an illness,” says Cole. “If that’s your value system, you might be willing to take less salary to work at a company that will allow you to be more flexible and that has great benefits.”

“What kind of deal is this,” asks Jotham Stein, executive employment lawyer and the author of Even CEOs Get Fired. “It is an equity play? Are you making this move because of commissions? Or are you more interested in salary, compensation, and signing bonus?”

Whatever it is you value, guide the negotiation so that it’s on the table. And, to understand your leverage, “use a parallel analysis for the company,” says Holtom. “What is it they want out of you? That’s how you get to common ground.”

Identify which needles will move

When negotiating compensation, you will, of course, look at the entire picture: salary, bonus, equity, and everything else. But not all of these things are negotiable in every case.

“Most companies have hard-wired their short- and long-term bonus targets,” explains Martha Heller, CEO of Heller Search, in a CIO.com video on negotiating with recruiters. “These variable compensation elements are set by the board and are hard to change.”

If that’s the case, she says, it’s best to negotiate on base salary as that’s where companies often have more wiggle room. “Or consider asking for a one-time sign-on bonus in order to cover any annual bonus you might be leaving on the table if you resign before your annual bonus is paid out,” she advises.

Cole also emphasizes the need to know which needles will move.

“A candidate recently told me that his role should have a fixed compensation plan with a higher salary, not incentivized by bonuses and stock,” Cole says. “But if that’s not how this company works, his opinion isn’t that relevant to the negotiation.”

This varies tremendously from company to company, Cole adds. “It has nothing to do with you, which is why you have to have a conversation where you seek to understand” what is negotiable and what is to too fixed to negotiate.

“But keep in mind that the higher you drive for higher compensation the more of a target you will have on your back if you don’t deliver,” Heller says.

Now’s the time to get what your team needs

Once you put that target on your back, buy yourself some cover.

“For someone going into a CIO position, the biggest concern should not be salary,” says Holtom. “The biggest concern should be how do I set myself up for success? A smart CIO is asking about resources. Whether that’s a team, a technology, or the CEO’s time and vision, that is the negotiation that needs to take place.”

Debora Roland, vice president of human resources at CareerArc, advising doing investigation up front. “Know what the job will take and make sure you aren’t taking on an impossible task,” she says. “It’s important to understand where the company stands when you enter it. If it’s a salvage job, for instance, it’s important to ask your employer, ‘When I get in the door, will I have the resources I need to be successful?'”

If not, Roland advises using this moment of leverage to get the people, budget, and executive commitment you need to achieve what you know needs to be done. Don’t feel as if you are asking for this up front is asking too much. Your future staff and the company you are joining need this from you.

Still, it’s important to save this conversation for the right person. “I would want to have that conversation with whoever my boss will be,” says Holtom. And when you have that person on the phone or in the room, whether in the course of interviews, the job offer, or post-offer negotiation, open the conversation by asking what that person is looking for. “Then listen carefully,” says Holtom. “When you have heard your future boss’s expectations, say something like, ‘I hear you. But what I see is a team that needs more people. I want to come work for you. But I want to succeed. And this is what I think it’s going to take for me to do that.’”

“More often than not, the people hiring you don’t understand the condition of their IT infrastructure,” Heller says. “It’s up to you to provide a reality check and define realistic expectations for your performance before you take the job.”

Get a Prenup

Before you’re hired might seem like a strange time to talk about what happens when you leave or get fired. But these days, anyone with leverage going into a position negotiates the separation agreement — as part of the employment agreement — on day one, Stein says. “The more leverage you have when negotiating your employment agreement, the better the separation benefits you negotiate at the outset should be,” he says.

“I call this a professional prenuptial agreement,” he explains. “The big picture is: What do I get when I get put out on the street?”

All the terms related to separation are negotiable, says Stein, but “you certainly want some sort of severance or separation pay. That’s often something like base salary for six months, three months, a year. But if the bonus is an important part of your salary, try to negotiate for the payment of your full bonus if you’re let go, or at least for a prorated bonus if you get terminated in the middle of the year.”

Equity is often an important part of compensation in jobs at the executive level. If that’s true for the job you’ve been offered, then this is the time to nail down what happens to that if your job is terminated.

This part of the negotiation comes into play, typically, after you’ve gotten a written offer. The way that companies handle this process varies wildly. Some offer agreements will already have a clause in them that addresses termination. Some will not. If the offer you’ve got doesn’t, bring it up.

Stein suggests you add at least a one-line sentence that says something like, “If you terminate my employment for any reason, I will receive X amount of pay and Y amount of accelerated vesting of my restricted stock or options.”

The company might not give you that, says Stein. “But that sentence opens up the negotiations.” And every word of that sentence will be open to negotiation. What does “terminate” mean, for example. How much pay? How much stock? It’s likely that the phrase “for any reason” will be hotly disputed, too, because it’s important.

Debate the devious details

Most words in the separation agreement are negotiable, so pay attention to what each word means.

“Say the offer says that the company will give you six months’ salary if it terminates you without cause. The definition of ‘cause’ can be critical,” Stein says.

You might imagine that it means your boss needs to find you guilty of some terrible breach or failure. But people get fired for all kinds of reasons. And the company might just as easily say you weren’t doing your job and then use a subjective measure to justify that. The goal here — and it is unlikely to be easy — is to specify as specifically and as narrowly as possible what “cause” means.

“The pure end of the spectrum from the employee’s point of view would be to word that clause as, ‘If I am terminated for any reason other than embezzlement, I get…,’” Stein says.

In between the company doing whatever it likes by applying subjective reason and that specific example is where the negotiations will happen. You might want to wage a similar battle over specifics about whether the company can relocate you, change your job, and other outcomes that might not be as dire as termination — but may not be what you want — and would release the company from paying your severance if the company forces you to leave.

What if your new ship sinks?

Another seemingly small thread you should make an effort to unravel is the line — if it’s in your offer — about what happens if your new company is acquired. “The CIO might be on the chopping block after an acquisition or merger,” says Stein. “The new company probably doesn’t want two CIOs.” Put something in your employment agreement to address this. Something like, says Stein, “If there is a change of control, I get X or Y.”

You might even want to address what happens if a private company sells itself for a price below what the investors get before anyone else receives any money from the sale. “There are situations where companies sell for a lot of money,” says Stein. The investors would certainly get something out of that liquidation. “But the CIO who’s been working hard as a C-suite officer might not get anything because of what’s called ‘liquidation preferences.’”

If you are working your way up the ladder of IT, you probably won’t be able to protect yourself against high liquidation preferences. But if you have already worked your way up and the company sells below liquidation preferences, your equity probably won’t be protected unless you’ve negotiated protection. If that latter situation is yours, having something about liquidation preferences in your employment agreement is critical.

Everything that glitters is not gold

If the salary in your offer letter is exactly what you want and seems completely fair — or you have a sense that there isn’t much room for movement — there are other things you should ponder while you have this brief moment of power.

“There are other things that could be negotiated,” says Heather Deyrieux, MSM, SPHR, SHRM-SCP, president of HR Florida State Council. “Some are easy, such as title. And in some positions that can make a big difference. If it’s not a CIO title, maybe it could be.”

Especially now, work from home is almost always on the table. “If that is something you’re interested in, it could be discussed up front, so you know whether it’s 100% remote or what that percentage looks like,” she says.

Education is another big one. “If there are additional degrees or certifications you’re looking at, maybe the organization can support you in that endeavor. Maybe that’s allowing you extra time out of the office, even if they’re not paying for the actual education itself,” she says.

This might be a good time to secure the time and commitment for your volunteer activities, too. “If there’s a personal or professional association you’re working with, you could negotiate for either additional paid time off for those activities or not having to take PTO while you’re volunteering your time,” Deyrieux adds.

Either way, remember, now is the time to explore your options, before you sign.

Credit: Christina Wood, CIO.com