Driving Success: Applying Car Buying Tips to Salary Negotiations

I am currently thinking of getting a new car. At the same time, someone I help with job hunting, is engaged in salary negotiations with her (hopefully) new employer.

I understand how difficult these negotiations are and how difficult it is to choose the appropriate strategy in order to win more while remaining reasonable to the employer.

(*It’s important to note that we are taking buying for cash option as an example, and not considering lease or finance options.)

In this article, I’ll try to explain this complicated matter from the perspective of the employer, using the purchase of a new car as an example.

· When I start looking for a car, I have a budget in mind.

Even in the absence of a formal compensation level policy, a corporation will always have a set budget for the role.

· It’s unlikely that I’ll buy at the first dealership I visit.

Unless I aim to buy a very rare or a difficult-to-find model, I will probably visit a few places and do the market analysis. Just like companies, who almost never hire the first candidate in the pipeline! They also need to see what’s available on the market.

· Sometimes, after conducting my market research, I discover that I cannot get the car I want at the price I have in mind.

In this case, I am left with three main options: 1) I can reconsider my budget, 2) revisit my requirements, or 3) hold off with buying for the time being.

Similar story with the employers: their initial requirements and budget may appear to be outside of what the market has to offer. In those circumstances, the employer may either refuse to hire or postpone it. Along with that, they can also they adjust the requirements or increase the offer.

· Every car has a set price.

It is determined by various factors such as brand, dependability, ease of maintenance, interior details, drive transmission, engine power, and so on.

Similarly, each candidate has their value in the job market. It may vary per location, but a big difference is unlikely to happen.

· For the money I have set aside, I target to buy a car that is going to check all the boxes I have in mind.

In this scenario, I’m referring to the employer’s expectations of the candidate as well as a job description.

· It is my responsibility to go to the dealership and check out the vehicle and its price.

I inquire about the pricing, and the dealer gives me the details: this is how it works.

The reason being that is my expectations for the car may be flexible, while the dealer’s vehicle is quite concrete. During the job searching and salary negotiating process, a job seeker plays a role of a salesperson, since it’s them who offers their services to an employer. That said, it’s them who should be the first to reveal their compensation expectations. Exceptions here will be headhunted candidates.

I’m not too much into the advice to keep playing ping-pong while negotiating salaries. It might create an impression that a candidate doesn’t know their worth and is very money motivated.

· Even if I have a good budget, it doesn’t mean I’m going to spend it all on a car.

My mind can change in the process! As I choose, I may want a different style vehicle with a different interior, transmission, and so on. But if at any point I feel it’s not worth the money, I won’t pay for it.

Similarly, a hiring manager may decide to go for a more junior candidate that planned, but who has lower salary expectations. But even in this case, an employer will pay a candidate their market value.

· If I like the car, but it’s outside of my budget, I am going to ask for a discount.

That’s when a company can ask if a candidate is flexible, and that’s where the questions about range and current salary usually come from.

· Even if a dealer cannot provide me a discount, I can still consider buying this car if I understand that I can afford it and am convinced that it’s worth it.

Employers can also hire more skilled and pricey candidates if they believe it is a profitable investment.

· I’m not going to a BMW dealership if my budget is $15K.

Like employers don’t consider individuals whose expectations significantly exceeds their budget.

The only difference between buying a car and hiring an employee is that, in most cases, I can see what I buy right away. I can test drive a car, and in most cases I have its history and the warranty. If anything goes wrong, the law will protect my consumer rights.

And even with risk this low, I still hesitate when choosing the right car.

A job seeker is not a product. A job seeker offers services, which include their skills and experience, to perform specific job. And an employer begins paying him from day one, even if they would not see the results for some months, if not years. And unless they have a contractual obligation from a recruiting firm, they won’t be eligible for a refund.

I hope this post shed some light on how employers approach hiring and offer composition, and has given you a new perspective on the tricky subject of salary negotiations.