Salary Negotiation in a Recession: What You Need to Know

Salary Negotiation in a Recession: What You Need to Know
Prakasit Khuansuwan/EyeEm/Getty Images

A lawyer friend of mine is fond of saying, “You can have 100 bad days in negotiations, and then you have a good day!”

 

With 38.6 million people filing for unemployment benefits in the last nine weeks and the official unemployment rate expected to approach 20% in early June, it’s easy to conclude this is not the time to negotiate your compensation when considering a new position.

 

But failing to do so can be a mistake that reverberates for years, since most raises are based on percentage increases and annual bonus targets often are expressed as a percentage of your base salary. The challenge, even during a recession, is to maximize the likelihood you will have a good day negotiating by focusing on what I will call the “three Rs” as you evaluate an employment offer: research, reflect, and resolve.

 

Research

Research begins by knowing your value in the marketplace. The best resource for salary benchmarking is from people in your network who are doing similar work, in similar industries, and in the same geographic area as you will be working. These trusted connections will have the most current and accurate salary data.

 

[MORE RESOURCES: MOAA’s Career and Transition Center]

 

Websites like www.salary.com, www.glassdoor.com, www.payscale.com, and www.indeed.com list salary ranges within an industry, company, and geographic location. However, several require registration and all rely, at least in part, on self-reported data that may overestimate salary ranges.

 

By contrast, www.salarylist.com contains data sourced directly from companies and the Department of Labor, so you can have greater confidence in its accuracy. The Bureau of Labor Statistics is another excellent source of salary benchmarks.

 

Beyond your network and online resources, executive recruiters are good barometers of both salary and demand, as are college placement offices and professional associations. For opportunities in the nonprofit sector, www.guidestar.org gathers and disseminates financial information sourced from individual organizations and archives recent IRS Form 990 filings (basically a nonprofit’s tax return – which is generally required, even for “nonprofits”). This document is particularly helpful to discern salary data since it typically lists the compensation for the five highest-paid employees in the organization. By knowing this information, you can accurately determine the probable range for the position you are considering.

 

Reflect

What are your priorities? Defining the relative importance of money, location, work/life balance, societal impact, growth potential, passion, culture, and family needs is part of nearly every career transition. In a strong economy with a low unemployment rate, such as we had throughout 2019 and into the first quarter of 2020, most candidates can prioritize for at least two of these criteria. For those with skills in high-demand fields, it might be possible to optimize three or more of these priorities.

 

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However, the reality of the current job market argues for flexibility and compromise. As one of my daughters used to say: “Dad, he isn’t Mr. Right. He’s Mr. Right Now.”  Don’t hold out for the perfect opportunity on the eve of a recession of unknown depth and duration. Your priorities are to get landed; expeditiously onboard; have impact in terms of dollars saved, programs strengthened, members retained, or whatever the coin of the realm may be in your new role; continue to expand your professional network; and be alert for new opportunities.

 

How long might it take to land?  A reasonable expectation in a strong economy is one week for every $10,000 of income you are seeking. This presumes a robust and organized job search. To use a baseball analogy, you’re going to swing and miss a certain percentage of the time. Accordingly, you have to keep your numbers up, including network development, information interviews, applications, and professional engagement in your field, especially during a recession where the time to land a new job can easily double.

 

Resolve

After you receive an offer letter (sometimes called an “at will” letter), resolve not to waste time wondering what the other side will accept. Instead, focus on what you can accept and work from there.

 

In this environment, an offer at the top of the estimated range for the position (based on your research) in an organization that appears to be a good cultural fit and doing impactful work may not need to be negotiated. Remember, you have very little experience negotiating, and the organization may shift focus to another candidate whose qualifications rival yours if you overplay your hand.

 

[RELATED: Finding a Job When You Least Expect It]

 

The likelihood of closing a favorable deal is maximized with a face-to-face discussion. Regrettably, this may not be possible during the current national emergency, but try to have an in-person or online conversation with the hiring manager. Start by expressing gratitude for the offer, identifying points of agreement, and limiting your negotiation to no more than two to three of the elements conveyed in the offer letter. After this opener, respectfully make your case emphasizing the experience and energy you will bring and the results you are prepared to deliver.

 

Most importantly, remember negotiating is not begging – it’s helping people get what they want so they will be inclined to give you what you want.

 

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About the Author

Capt. Jim Carman, USN (Ret)
Capt. Jim Carman, USN (Ret)

Capt. Jim Carman, USN (Ret), serves as MOAA's Vice President, Council/Chapter and Member Support. He is a Certified Association Executive and served as a Navy pilot for nearly 25 years.