The hidden truths behind contract negotiations.
Your hands are getting sweaty, you mind starts to raise, the impulse to flee is triggered. Ever felt like you have a ticking time bomb in front of you? Any wrong move can set up a negative chain of reactions that will kill the victim or in your case the chance of the new job.
"I want 50.000,-€ in cash or I will kill the hostage."
Imagine how fast a contract discussion can sidetrack to a hostage negotiation which is a sad emotional reality for a lot of people. This important conversation will set how much money you will make in the near future while having the Damocles sword hanging above your head of losing the job altogether. It is an often stressful situation and feels like playing chess with your opponent. While you're trying to get the highest buck for your services the company on the other side tries to underbid you to the lowest possible costs.
Breath in, breath out and remind yourself:
You are both sitting at the same table - not on opposite sides.
Two sides of the same coin
A contract is an agreement of two parties exchanging services for goods.
The first point to understand about negotiating a contract is that even if it seems like we as the applicant are asking for something in reality it is both sides that are in desperate need. Of course we don't get as many job offers as the company applications but do we do the same marketing as they do? Obviously not. Nevertheless, both parties are equal in their goals: Find the right candidate/company as fast as possible. You maybe miss a check at the end of the month by not having a job but they actually pay for searching and interviewing. It was one of these Eureka moments when I finally understood that we are both just a different side of the same coin. You have different demands but in the great scheme of things we want the same. The company wants a productive employee who is worth their money and you want to be happy/successful and pay your bills. You trade time and skill for money.
You are not the petitioner. You are a seller - of yourself.
The key understanding here is that both of you invested time and effort to find the right person/company and no side is generally in a better position from the get go. Both values have to be met else you end up in a bad position or worse in a compromise.
"F*** your compromises!"
A compromise is a situation in which no one gets what he wants.
Compromising became one of the standard practices in any negotiation. Especially today, people love to give up something of value to arrive in the middle because this is the human way of agreeing. I don't say that compromises are not an option or that we can sometimes fall back to them but your goal should always be win-win not just meet in the middle.
To paraphrase an example from Never split the difference by Chris Voss:
Imagine your wife wants you to wear black shoes but you want to wear brown. You compromise and wear one brown and one black shoe. Who is happy now? No one since no one really got what he wanted.
What if your wifes goal is style and she doesn't know that the black shoes are uncomfortable since you are the only one who is wearing them. Would you wear a brown belt instead it would match and you would be comfy. But you can only come to this conclusion by seeking the why behind the demand. Knowing what is important for the other side is key, but they will rarely tell you - at least not directly. You have to listen carefully. Does HR repeat specific skills or goals? Was there a moment where they closed up? Are they under a lot of stress to find new people? All this can help to state your point and let the other side decide it is a good idea to give you more benefits or pay you more. Of course this also works the other way around.
In the end your goal should always be to understand and be understood and a win on both sides since hard feelings will cost you dearly later.
Rules of negotiation
Being prepared is half of the deal. Knowing the facts and making clear decisions beforehand is vital. What is too low? What can you expect? Did you adjust your offer to your new situation? Remember your goal is to get what you value, everything else will lead to bad decisions, performance and unsatisfaction.
Minimum Salary: Costs of Living
Everyone has a different living standard which depends on where you live, what you value and what you spend your money on. Maybe you want to live alone or closer to the city. You want to maintain a car or spent more than a student budget for groceries. Your first step is to find out and compare the costs of living in your area to create a realistic calculation of how much you will need. This also helps your inner state to put everything in perspective, and if the salary scratches your poverty limit it is easier to argue with.
"How should I be able to live from that?"
Example: London is infamous for being expensive with a not matching salary. The salary there is only great if you manage not to live in the city aka working remote. If you can effort a flat on your own you're probably in a senior position.
What does the industry pay in this country and this area? What is the regular payment for someone in your position in your future company? After some basic research you know what you can expect and will not be surprised by a low-ball offer. Personally I can recommend, you use these three websites to find the right number:
Glassdoor can be a little bit too generic but has a huge database and is fine for basic numbers.
LinkedIn Salary is still a new feature with less data but you can already get a good feeling of how much you can expect. Personally I find this one much easier to understand.
LinkedIn chat: Add and ask former or current employees at the company if they can share some insights especially into earnings. It takes more effort but provides the best and most accurate results. Most people are happy to help and share as much as they can.
But of course our goal is not to get paid realistically we want to get paid our personal worth - let us be bias for a moment. Anchoring yourself and others is an important technique to settle for at better conditions. If you decide for yourself that for example 230,-€/day would be the optimal number it will lead to a clear aim and goal. Should the company offer you 190,-€/day and you counter with your 230 it is very likely that you compromise at 200 or 210. Why? Because you ankered them at 230 and they you at 190. Now often the good old compromise comes into place and you are both happy to make it work while avoiding the high/low number. Especially if this number is the more realistic salary this is already a good win (and less of a negative compromise). But we are not here to compromise we are here to get our number.
Never be afraid of high numbers
A lot of people I talked to over the years are afraid of asking for a salary that is potentially too high especially after it was turned down or lowered. The word I want to emphasize here is: Negotiation. As long as you are only proposing it is still a discussion in which two people figure out each others needs. As Chris Voss, former FBI hostage negotiator for 24 years wrote:
No one gets killed on deadline.
In my personal experience the only time we ended the conversation early was when I applied for a much lower junior/trainee position at a games company (Hint: They make soccer games). There was probably a way to spin it but I noticed that the position seemed to be tight to a budget and I didn't want to push further.
Tip: Especially if you work in a foreign country let the company calculate your salary and tell you exactly how much you will have at the end of the month "on your bank account". Ask for any additional fees or taxes at the end of the year so you can be sure of how much you really make.
Money is not everything
Money sets up worth and respect and is important for paying the bills but money is not the only way you can be compensated for your effort.
Gym membership: Working in a stressful environment while sitting the whole day will have its toll on your body. Most people counter this by going to the gym which adds up 30,-€ to 100,-€/month to your costs. Some companies have contracts with nearby gyms and can offer discounts or free memberships.
Transportation: Traveling to work every day can be quite expensive. It can eat up 50,-€ to 300,-€ of your monthly budget. Getting discounts or pay backs by your company is as good as getting paid 50,-€ to 300,-€ more a month.
Training sessions: Constant improvement is not only a plus for you it also benefits the company you are working in and makes the employer happier since they feel cared and advance professionally. How about learning scripting?
Language learning: Moving to a new country? Learn the native language paid by the company.
More leave days: 5 weeks of paid leave is common in Western Europe. Not so much in America, Asia or Africa. Upgrading from 12 to 25 paid holidays from the total of 261 working days a year means a change from 5% to 10% of free working time (not counting national holidays which add an extra of 10%).
Regulated overtime: Having a clear regulation regarding paid overtime avoids inflating your payment by working regularly more without compensation. I am also a big fan of asking if overtime is "a thing" in this company. Even if extra hours are generally not paid as long as they are not "a regular thing", but an exception to this can be fine too.
Longer contracts: Having a longer secure job is of course not the same as money but a bird in the hand is better than two in the bush. It means that you will not lose earning money in the future while searching for the next gig. Stability and constant payment can sometimes be worth more than a quick lottery win once in a while.
Remote: One remote day a week can be a beneficial deal and allows you to take care of your kids, organize your life or going to appointments (doctor, bank, city) without taking holidays.
The first hiring in a new company can be tough especially money wise. Besides leaving your old life behind, you have to organize and pay for so many costs that it can become a burden. Why not negotiate with your future employer a better start into your new life? It is also in his best interest that you can settle down as fast as possible without being too occupied by all the moving parts around you.
Flight: Transportation can be costly and eat up your life budget in one WUSH. Asking for a sponsorship or a later back payment is often not a big deal for most companies. You just have to ask.
Apartment: Finding a new flat can be though. Countries like France sometimes rely on french guaranties, speaking the language or other stepping stones. Having the company helping you out is a big win for both parties since I can tell you: You will be busy at work searching for flats, unfocused or tired from running around after work to start your new life just not working.
Temporary Apartment: The first few days are crucial. Finding an apartment without being on location can be though. Renting something temporary is costly and can eat up your first month of payment. Negotiating a two plus weeks paid accommodation is becoming the norm for distant moving. I once even suggested to switch me from a hotel to an AirBnb which was not only cheaper but much better.
Moving: You have more than just two suitcases or even a family? Helping with the moving (financially or planning wise) can be a great investment from the company side and it shows commitment.
Visa: Working in visa related countries especially like the U.S. - the Fort Knox of today - can be tough since getting a visa is sometimes complicated, costly, takes time or is even impossible without recommendation or a company link.
Settings things up: Do you ever tried to open a bank account, applying for health insurance or social security number in a foreign country? Welcome to France, madame et messieurs. This is more of a must than really a plus.
"I am a junior applying for my first job. What do I have to say about my worth in money?"
It doesn't really matter if you are working in the animation, VFX or any other industry the basic rules are the same. Of course VFX pays better than animation and a technical director will get more than an artist since it is about the worth of the product and the influence of the position. "We're just negotiating." is the mantra you should repeat to yourself until you only accept an offer that aligns with your goals - practice makes perfect. Nevertheless being paid badly in any industry is a sin and often a questionable business plan by those who try to compensate for bad project deals. In the grand scheme of things success and worth has to be shared to maintain respect, loyalty, creativity and progress.
Not everyone should become a hostage negotiator but everyone should be able to negotiate the best deal for themselves.
You want to be better prepared, become more confidant and get a better deal in your next negotiation? Make sure to check out this.