Received promotion offer at work and trying to negotiate the pay increase portion.

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stimulacra
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Received promotion offer at work and trying to negotiate the pay increase portion.

Post by stimulacra » Tue Dec 05, 2017 3:24 pm

Been at my current employer for about two years now.

There was a recent reshuffling of staff at work and I got bumped up a rung to backfill an opening.

With the promotion I'll be in the next pay grade up but my base salary only increases by 4% although I now qualify for a discretionary performance bonus up to 10% of annual (but the next closest payout date would be Q4 of 2018).

I've recently turned down two outside positions with 25-35% increase in pay, mainly because it wasn't a great fit culturally, or the commute wasn't convenient… as a result I feel kind of underwhelmed by the offer.

I've been having a series of conversations with my functional manager (have not chosen to disclose the outside offers yet) and he's informed me that HR stands by their offer and they won't be countering.

I'm curious what my options are now at this point. As I see it they are listed below:

1) Accept and sign the promotion letter and go on with my life.

2) Accept and sign but be more receptive to outside offers.

3) Decline the promotion and hope that they counter but be prepared to move on if things deteriorate.

For the most part I am happy at work but living expenses has gone up at a fair clip and my circumstances are changing enough that I can use the additional income and my market value would warrant it.

Also for context, this is my first corporate job. The entirety of my career has been working for small and medium size businesses where I only had to negotiate with a single authorized individual (almost always the owner or principal) and didn't have to deal with the back and forth between direct and functional managers and HR.

Thank you everyone in advance for the help and advice.
Last edited by stimulacra on Tue Dec 05, 2017 3:30 pm, edited 2 times in total.

2Birds1Stone
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Re: Received promotion offer at work and trying to negotiate the pay increase portion.

Post by 2Birds1Stone » Tue Dec 05, 2017 3:27 pm

If you have fairly good job security in your industry I would personally go with option 3.

Pacman
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Re: Received promotion offer at work and trying to negotiate the pay increase portion.

Post by Pacman » Tue Dec 05, 2017 3:34 pm

Are you getting a higher title as part of the promotion? If so, I would just take the offer and then use that to get even high offers in the market.

KlangFool
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Re: Received promotion offer at work and trying to negotiate the pay increase portion.

Post by KlangFool » Tue Dec 05, 2017 3:41 pm

OP,

(3).

KlangFool

PVW
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Re: Received promotion offer at work and trying to negotiate the pay increase portion.

Post by PVW » Tue Dec 05, 2017 3:51 pm

Pay should be commensurate with job content and performance.
stimulacra wrote:
Tue Dec 05, 2017 3:24 pm
bumped up a rung
Doesn't really give us any idea if a 4% raise is worth the rung.

If it's a change in title and slight change in responsibilities, then a 4% raise with a possible 10% bonus seems like a good move.

If you turn down a minor promotion, this tells your employer you are happy with your current job and not very ambitious. They might let you stagnate with mediocre pay for a long time. Or you might be the next one up for a layoff.

Tachyon
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Re: Received promotion offer at work and trying to negotiate the pay increase portion.

Post by Tachyon » Tue Dec 05, 2017 3:54 pm

stimulacra wrote:
Tue Dec 05, 2017 3:24 pm
I'm curious what my options are now at this point. As I see it they are listed below:

1) Accept and sign the promotion letter and go on with my life.

2) Accept and sign but be more receptive to outside offers.

3) Decline the promotion and hope that they counter but be prepared to move on if things deteriorate.
In a negotiation, always determine your true BATNA.
Between the current agreement and the other options with 25% more, what would you choose?
For instance, if you would very likely choose the current agreement, then you would be negotiating from a weak position.
However, if you are 50/50, then you are in a much stronger position.

Be careful about using the outside offers to negotiate your current position, unless you are ready to leave. If they can't match it, then in their heads, even if you sign, you're not a long-term stable employee since you can go elsewhere for more.

First, you need to determine your position, before proceeding strategically on how to negotiate.

stimulacra
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Re: Received promotion offer at work and trying to negotiate the pay increase portion.

Post by stimulacra » Tue Dec 05, 2017 4:09 pm

Regarding BATNA:

I know that I can receive 20% above what I am making now, although my current position allows for better work-life balance and a higher degree of flex time for family things.

My mental floor is 7-8% bump in base pay. I asked for 10-15% as a range.

The bonus will be nice but I've received 20% of annual bonuses in the past (on and off) and have learned the hard way not to depend on them or budget for them. On an emotional level that's nearly impossible to do (bonuses were split 50/50 to upgrading gifts and going into savings).

The job title is one I've held in the past but for smaller size organizations. Having it or not having it won't dramatically affect my market value (maybe a 3-5% premium)?

stimulacra
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Re: Received promotion offer at work and trying to negotiate the pay increase portion.

Post by stimulacra » Tue Dec 05, 2017 4:13 pm

In my experience, I know that using outside competing offers has seldom ended well. Also it's not really my style.

HornedToad
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Re: Received promotion offer at work and trying to negotiate the pay increase portion.

Post by HornedToad » Tue Dec 05, 2017 4:14 pm

I don't consider #3 a valid option unless you don't actually want the promotion. #1 or #2 is the way to go IMO.

Jags4186
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Re: Received promotion offer at work and trying to negotiate the pay increase portion.

Post by Jags4186 » Tue Dec 05, 2017 4:20 pm

OP,

Would accepting the promotion require you to do more work/work longer hours or is it simply a title change with offloading of some responsibilities while bringing on new ones. If it is this type of promotion, I would recommend taking it for the 4% raise (of course push for more), stick it out for at least 6 months and then look elsewhere for new employment with your newly inflated title.

If it does require you to put many more hours in I would go to option 3 and begin looking for new employment or go back and accept one of the 35% pay increase positions.

You mention increased expenses and a need for more money. It’s very difficult to get significant increases at the same company even with promotions. The bigger the company, the harder it is to pull off unless you’re in senior management.

dbr
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Re: Received promotion offer at work and trying to negotiate the pay increase portion.

Post by dbr » Tue Dec 05, 2017 4:25 pm

Don't forget that a promotion to a higher level with a small increase locates you further toward the low end of the scale for the grade and that implies you should get larger increases in the next immediate salary adjustments. I suspect this situation is pretty standard in most large companies.

I don't get 3). Turning down a promotion would not go over well anywhere I have been, and negotiating the pay increase doesn't happen either.

It does seem just ratcheting up your search for another job is indicated if you can't accept the current situation.

stimulacra
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Re: Received promotion offer at work and trying to negotiate the pay increase portion.

Post by stimulacra » Tue Dec 05, 2017 4:37 pm

Title change with some additional responsibilities. My weekly hours should not change dramatically if at all.

The recent outside offers have already been filled with people I know but the line of communication is still open for future opportunities.

Declining the current promotion offer might be viewed as I don't care about the promotion (I do care and was excited until we got into the specifics) or as a bluff (it might be but I'm prepared for the worst case scenario).

Mainly looking for a way to eke out another 3-4%. The current 4% bump doesn't really move the needle for me financially. The bonus is nice and perhaps I'm discounting the value of it too much but the fact that it's at the employer's discretion has conditioned me to not rely on it too much.

This is my first time dealing with multi-party negotiations and a lot of the information is pretty opaque to me.

Thank you everyone for the responses.
Jags4186 wrote:
Tue Dec 05, 2017 4:20 pm
OP,

Would accepting the promotion require you to do more work/work longer hours or is it simply a title change with offloading of some responsibilities while bringing on new ones. If it is this type of promotion, I would recommend taking it for the 4% raise (of course push for more), stick it out for at least 6 months and then look elsewhere for new employment with your newly inflated title.

If it does require you to put many more hours in I would go to option 3 and begin looking for new employment or go back and accept one of the 35% pay increase positions.

You mention increased expenses and a need for more money. It’s very difficult to get significant increases at the same company even with promotions. The bigger the company, the harder it is to pull off unless you’re in senior management.

dbr
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Re: Received promotion offer at work and trying to negotiate the pay increase portion.

Post by dbr » Tue Dec 05, 2017 4:41 pm

stimulacra wrote:
Tue Dec 05, 2017 4:37 pm

This is my first time dealing with multi-party negotiations and a lot of the information is pretty opaque to me.

Thank you everyone for the responses.
Jags4186 wrote:
Tue Dec 05, 2017 4:20 pm

You mention increased expenses and a need for more money. It’s very difficult to get significant increases at the same company even with promotions. The bigger the company, the harder it is to pull off unless you’re in senior management.
Unless you are highly placed in this company I think the impression you are engaged in a negotiation is mistaken.

bloom2708
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Re: Received promotion offer at work and trying to negotiate the pay increase portion.

Post by bloom2708 » Tue Dec 05, 2017 4:48 pm

1)

Change is the only constant.
"We are here not to please but to provoke thoughtfulness" Unknown Boglehead

stimulacra
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Re: Received promotion offer at work and trying to negotiate the pay increase portion.

Post by stimulacra » Tue Dec 05, 2017 4:50 pm

dbr wrote:
Tue Dec 05, 2017 4:41 pm
stimulacra wrote:
Tue Dec 05, 2017 4:37 pm

This is my first time dealing with multi-party negotiations and a lot of the information is pretty opaque to me.

Thank you everyone for the responses.
Jags4186 wrote:
Tue Dec 05, 2017 4:20 pm

You mention increased expenses and a need for more money. It’s very difficult to get significant increases at the same company even with promotions. The bigger the company, the harder it is to pull off unless you’re in senior management.
Unless you are highly placed in this company I think the impression you are engaged in a negotiation is mistaken.
Fair enough

Jags4186
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Re: Received promotion offer at work and trying to negotiate the pay increase portion.

Post by Jags4186 » Tue Dec 05, 2017 6:45 pm

OP,

Also, I forgot to ask, is the 4% increase going to be considered your raise or is this an off cycle increase? You could get 4% and then get another 4% or so in the next few months.

All things you need to get clarified.

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sunny_socal
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Re: Received promotion offer at work and trying to negotiate the pay increase portion.

Post by sunny_socal » Tue Dec 05, 2017 6:52 pm

1 or 2. So you don't get a huge bump, but you have another title to claim on your resume. IMO this is worth more than than the $$. Then keep looking if you're no longer interested in working at your present company.

If you pick 3, you might as well just leave. I don't know why you'd consider declining.

stimulacra
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Re: Received promotion offer at work and trying to negotiate the pay increase portion.

Post by stimulacra » Tue Dec 05, 2017 7:23 pm

Jags4186 wrote:
Tue Dec 05, 2017 6:45 pm
OP,

Also, I forgot to ask, is the 4% increase going to be considered your raise or is this an off cycle increase? You could get 4% and then get another 4% or so in the next few months.

All things you need to get clarified.
There's a departmental merit increase (I'm guessing 2% or so) that I just missed the cutoff date for by two weeks. So I was told they're bundling this in with that.

A career coach I'm friends with suggested a fourth option along with the previous three: that I just defer the conversation till next month. Something along the lines of “Thanks but no thanks, maybe now is not a good time to talk, lets revisit in a month”.

A new calendar year might mean they have a different budget to work with and also me deferring the conversation signals that I don't need to make the deal right now.

Again I appreciate the advice and outside perspectives so far. It's really helped me see things with clearer eyes.

gundlached
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Re: Received promotion offer at work and trying to negotiate the pay increase portion.

Post by gundlached » Tue Dec 05, 2017 8:09 pm

Considering the bonus I'd take #2. Outside offers are often more because they need to lure someone like you out of your current org, which is a nuisance for most.

With the bonus that's around 14%. And you can always still entertain other offers.

What reason would your boss have to lie to you abt their willingness to negotiate?

123
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Re: Received promotion offer at work and trying to negotiate the pay increase portion.

Post by 123 » Tue Dec 05, 2017 10:14 pm

stimulacra wrote:
Tue Dec 05, 2017 3:24 pm
...
I'm curious what my options are now at this point. As I see it they are listed below:

1) Accept and sign the promotion letter and go on with my life.

2) Accept and sign but be more receptive to outside offers.

3) Decline the promotion and hope that they counter but be prepared to move on if things deteriorate.
...
I would go with 2) Accept and sign but be more receptive to outside offers.

If you have a higher position/title with your current employer it potentially increases your value to other employers so continue with your job search. In a world of career mobility lots of times the best time to move on is shortly after a promotion or raise since typically you've got a one year organizational cycle to wait out for any further improvement. If you don't accept the promotion it makes it difficult for the employer to decide how you fit in, or they may decide that you don't.
The closest helping hand is at the end of your own arm.

jayk238
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Re: Received promotion offer at work and trying to negotiate the pay increase portion.

Post by jayk238 » Tue Dec 05, 2017 10:26 pm

I agree with the last post. Accept job- then look for alternative better offers. BATNA is the only real way to negotiate. Make sure you are in a better position always before negotiating.

mouses
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Re: Received promotion offer at work and trying to negotiate the pay increase portion.

Post by mouses » Tue Dec 05, 2017 10:54 pm

#2

I would never disclose that I had been looking outside unless I was actually resigning :-)

I can see the asking for a month to decide due to it's being the holidays etc. then playing it by ear if that goes over like a lead balloon.

If you go with #2 you have slightly more pay, a slightly better title, still time to look outside, and time to see how the new job goes. Also might there be a six month salary adjustment since you are near the low end of the salary scale.

stimulacra
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Re: Received promotion offer at work and trying to negotiate the pay increase portion.

Post by stimulacra » Tue Dec 05, 2017 10:59 pm

jayk238 wrote:
Tue Dec 05, 2017 10:26 pm
I agree with the last post. Accept job- then look for alternative better offers. BATNA is the only real way to negotiate. Make sure you are in a better position always before negotiating.
Ok, there might be a gap in my understanding of BATNA… If one is able to determine one's Best Alternative to a Negotiated Agreement… how would one either communicate or implement that if there's a failure to reach an agreement?

jayk238
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Re: Received promotion offer at work and trying to negotiate the pay increase portion.

Post by jayk238 » Tue Dec 05, 2017 11:59 pm

Thats the whole point of BATNA. Its not a bluff. You have to be sincere. If the goal is to find BATNA to negotiate and it fails- ie they say ok bye and you are upset then its a mistake.

You have to be prepared to move or go elsewhere or whatever to use the BATNA. I think a big mistake is to see it as simply an ace up the sleeve in a Poker game. Its got far greater consequences than a simple game. If the offer is not upped you have to make the big decision.

In this regard, you wouldn't tell them hey I got a better job than you are offering and if you dont give me the raise Im leaving. It might be better to massage the information- ie come from it from their perspective.
1. maybe explain to them that you wish for a raise. They may say money is tight or this is the best we can do.
2. Next Explain to them that the average income for someone with your skills in your industry is 20% higher etc. Maybe back up with public figures or evidence from industry placement sources/colleageus/something - they may say we are trying to be more efficient
3. Then tell them why you are irreplaceable, why you are worth this raise, what extensive work you have done that has been of significant contribution to their organization. Provide them with rock solid data and explain to them that its all about feeling compensated fairly for your hardwork, loyalty, and effort. I wouldnt present this only through words. Maybe a powerpoint, maybe a presentation of all the work you have done either printouts or a CV format listing everything. Maybe even revenue numbers showing a benefit from your contribution. Maybe your reviews of your performance etc etc.
4. If they fail to do so tell them you have another offer and you are accepting it. They may make the changes you seek. If not, then goodbye.

BATNA is a serious chip to be played at the negotiation table.
CAVEAT:
My sequence could be wrong or inappropriate to your industry. Im only a resident with limited real world experience.
From my own experience finding a job- I narrowed my search to two places I would have been happy at. I had a greater preference for one and there were aspects to the job I wanted changed. When they wouldnt budge on the aspects of the position I said I cant do this and will go elsewhere. They changed immediately everything I wanted.

I can't guarantee this will happen for you especially since the physician market is very employee friendly.

stimulacra
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Re: Received promotion offer at work and trying to negotiate the pay increase portion.

Post by stimulacra » Tue Dec 12, 2017 1:41 pm

Update:

Direct manager met with me 1 on 1 with a long laundry list of areas I could improve on; perceived lack of enthusiasm recently on current projects, managing expectations, etc… most of the items appeared to be fished out from my coworkers so I feel like it's a bit manufactured to lay some groundwork on the counter but I'm taking it at face value.

She also said that merit and pay increases were mediocre across the board after a two year freeze and the specific business segment I primarily support is seeing a budget decrease in 2018.

Leaning towards option 2 at this point but might ask to reduce my bonus potential to increase base pay. Maybe a 10-20% premium haircut in the switch.

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sunny_socal
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Re: Received promotion offer at work and trying to negotiate the pay increase portion.

Post by sunny_socal » Tue Dec 12, 2017 2:07 pm

Doesn't sound like you have much leverage. Take what they offer and try to be happy with it or find greener pastures.

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greg24
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Re: Received promotion offer at work and trying to negotiate the pay increase portion.

Post by greg24 » Tue Dec 12, 2017 2:21 pm

Accept the promotion. It is crazy talk to decline it.

A career coach is advising you to say "Thanks but no thanks. Maybe next month." That sounds like a bad career coach to me. I think most organizations would react very poorly to such a statement.

Lots of companies wouldn't backfill a position with a promotion, they'd just have you take on additional duties with zero increase. If you decline a promotion or try to delay a month, they may just start piling responsibilities on you anyways.

If you are unhappy, look for an outside position. If you are happy with the work/life balance, etc., stay where you are now.

stimulacra
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Re: Received promotion offer at work and trying to negotiate the pay increase portion.

Post by stimulacra » Tue Dec 12, 2017 2:53 pm

Yeah, gonna take the offer and focus my attention and energy elsewhere.

Thank you everyone for your advice and outside perspective. It's been helpful and reassuring.

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Pajamas
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Re: Received promotion offer at work and trying to negotiate the pay increase portion.

Post by Pajamas » Tue Dec 12, 2017 3:23 pm

stimulacra wrote:
Tue Dec 12, 2017 1:41 pm
Update:

Direct manager met with me 1 on 1 with a long laundry list of areas I could improve on; perceived lack of enthusiasm recently on current projects, managing expectations, etc… most of the items appeared to be fished out from my coworkers so I feel like it's a bit manufactured to lay some groundwork on the counter but I'm taking it at face value.

She also said that merit and pay increases were mediocre across the board after a two year freeze and the specific business segment I primarily support is seeing a budget decrease in 2018.

Leaning towards option 2 at this point but might ask to reduce my bonus potential to increase base pay. Maybe a 10-20% premium haircut in the switch.
The meeting with your manager is not a good sign whether it is purely a bargaining tactic or not. Sends a real mixed message: "Your work and attitude need improvement but here is a promotion."

My advice would be to take the new position with the offered pay (as long as the only issue is the pay and not the new position itself) and begin looking for a new position elsewhere much more aggressively after the holidays.

Sometimes you have to play the hand you are dealt.

If you accept the new position, don't let your feelings affect your work. Go into it 100% and then leave on a high note when you find a new job.

Jags4186
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Re: Received promotion offer at work and trying to negotiate the pay increase portion.

Post by Jags4186 » Tue Dec 12, 2017 3:28 pm

Pajamas wrote:
Tue Dec 12, 2017 3:23 pm
stimulacra wrote:
Tue Dec 12, 2017 1:41 pm
Update:

Direct manager met with me 1 on 1 with a long laundry list of areas I could improve on; perceived lack of enthusiasm recently on current projects, managing expectations, etc… most of the items appeared to be fished out from my coworkers so I feel like it's a bit manufactured to lay some groundwork on the counter but I'm taking it at face value.

She also said that merit and pay increases were mediocre across the board after a two year freeze and the specific business segment I primarily support is seeing a budget decrease in 2018.

Leaning towards option 2 at this point but might ask to reduce my bonus potential to increase base pay. Maybe a 10-20% premium haircut in the switch.
The meeting with your manager is not a good sign whether it is purely a bargaining tactic or not. Sends a real mixed message: "Your work and attitude need improvement but here is a promotion."

My advice would be to take the new position with the offered pay (as long as the only issue is the pay and not the new position itself) and begin looking for a new position elsewhere much more aggressively after the holidays.

Sometimes you have to play the hand you are dealt.

If you accept the new position, don't let your feelings affect your work. Go into it 100% and then leave on a high note when you find a new job.
Agreed. There are tons of jobs out there. Recruiters are constantly calling me for lateral moves with better pay. Too bad I just took my present job 6 months ago or else I'd listen more intently. I don't think you will have trouble finding new employment at higher pay.

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djpeteski
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Re: Received promotion offer at work and trying to negotiate the pay increase portion.

Post by djpeteski » Tue Dec 12, 2017 3:33 pm

I am a 1 or a 2 guy in this situation.

The 1 or 2 really depends on what you value more: work life balance - or - higher pay. Only you can answer that.

So take the promotion now and start actively looking if you value the higher pay more.

sambb
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Re: Received promotion offer at work and trying to negotiate the pay increase portion.

Post by sambb » Tue Dec 12, 2017 3:35 pm

Take it. Remember that they may be paying you what you are worth to them. You may be worth more elsewhere but maybe this is your worth at this organization. It is possible that you can be worth a different amount at two organizations. Every company is different. Not every ptside position is all it’s cracked up to be.

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