Re: Offer Letter

Subject: Re: Offer Letter
From: Al Geist <al -dot- geist -at- geistassociates -dot- com>
To: techwr-l -at- lists -dot- techwr-l -dot- com
Date: Mon, 08 Jan 2007 10:37:38 -0500

James Barrow wrote:

Dori Green said:

Great advice from an old Amish horse trader -- "The first person to name a >price is the loser."


I think the above statement works in regards to contract jobs and working
with a recruiter, but less for positions that involve offer letters.


Actually, Dori's advice is one of the first rules of negotiation found in virtually every book on the subject. Most employers (and recruiters) will jump through hoops in order not to be the first to mention a dollar value, because they know that most potential employees will undervalue themselves.

Typically, one in five posted ads on Dice or Monster list an hourly rate or
range (e.g., $35 or $35-$47). I've always assumed that this is the what the
client company is offering *after* the recruiter has subtracted his
percentage.


Your probably correct in this assumption. There would be no reason to advertise what they are getting paid for your labor. It will just make you want more when you found out how big of a chunk they take from your paycheck.

Whenever I begin negotiations, recruiters often claim that the rate is
"capped", and that no more money can be offered for that position.

Whenever a recruiter tells me that no more money can be offered, I want to
stop them in their tracks and say, "No, you don't understand. Don't go back
to the client company and ask them to increase the pay rate. Instead, why
don't you take a smaller percentage of what the client company is offering,
and give those few extra dollars per hour to me?"


Most recruiters have the liberty to negotiated within a certain pay window and based on approval of their supervisors. They're sales reps, much like car sales reps. Their take home pay could be base plus commission, or commission only, and both are based on the amount of money they bring into the company every month. What is their incentive to give you more money and possible reduce their income? It all boils down to supply and demand.

If you are a perfect fit for the position and the client company wants you no matter what, you have some leverage to get a few more pennies in your pay envelope. If the recruiting firm has a list of 10 potential employees all with similar backgrounds, you have less leverage. If it's a government job, you have no leverage.

Of course, there are always those companies that are too cheap to pay for quality employees, and the quality of their products and employee turn-over reflect that approach. Unfortunately, these are often the same companies that give their former CEOs $200 million severance packages for working two years to bungle things up even more than when they started...leaving even less money for the little people.


Al

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References:
RE: Offer Letter: From: James Barrow

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