Brother Ron Barnes
Founder and Pastor
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Guide to Negotiating
Salary and Benefits
In this section, we will be talking about negotiating salary and benefits as part of the hiring process. For a discussion of how to get a raise in your present job, see the section on salary reviews.
SPECIAL NOTE TO NEW GRADS
If you are new to the job field, remember that you bring a number of advantages to the employer. Since you have just completed your education, you bring the freshest technology to the job. You have your whole career in front of you and can offer many years of productive service to the employer. You bring energy and enthusiasm to the job. And you probably do not have preconceptions or bad habits you will have to unlearn. These are valuable assets which make you a valuable person to the employer.
Your main disadvantage is that you are not experienced in the art of negotiating compensation. The employer is. It's kind of like a country bumpkin who comes to the big city and gets in a poker game with professional gamblers. Many employers try to use your lack of experience to get you to work for less. Your tendency is to be so glad that someone is offering you a job, that you accept whatever they offer with a beggar's nod and smile.
The employer is choosing you, not your price. They really want to hire you! They think you'll make or even save them money! You must have the ability to do the work, or they wouldn't be making you an offer. If you think you have "no experience," remember the qualities that make you successful. Their hiring decision is 95-percent based on your personality, enthusiasm, and transferable skills. Only 5 percent has to do with your specialized knowledge. Since they can't teach manners and common sense, they hire it.
By using the information and techniques in this section, you can level the playing field and negotiate the compensation you need and deserve. Let's get started.
What are you worth?
The answer to this question forms the foundation for negotiating a better salary. The answer has two parts; each part is the answer to another question:
--Part One, What do others get paid for doing work like yours? and
--Part Two, What value do you produce for your employer?
RESEARCHING THE JOB MARKET
The employer has a job to fill. If he doesn't hire you, he is going to have to hire somebody. He has probably done his homework and knows what others are getting paid for doing similar work in that community. He certainly knows what he was paying the last person who held the job. In order to negotiate effectively, you need to have as much of the same information as possible. It would be nice if you could find the employee you are replacing and ask them about their compensation but that is usually not possible. Besides, you could be stepping into a new job created by growth.
Part one, "What do others get paid for doing work like yours?" depends on defining "like yours"--the actual duties the employee performs. If possible, get a written job description from human rresources. Most large companies and government agencies have them. Most small employers don't.
An excellent place to start is Salary.com. Use the Salary Wizard to identify your job and community. When you select a job title, click "confirm the job description" and the Salary Wizard will show you a job description for the job you selected. Compare this with your information about your specific job to make sure you are comparing apples to apples.
If you are unsure which job title to select, you may need to get more information about the position. One way to do this is by conducting informational interviews with similar companies in your community. If there are no similar employers in your community, find a similar employer in another community and use the Salary Calculator to learn the percentage to multiply the figures by. When using salary calculators, bear in mind that the figures given are industry averages. If you are new to the job market, you can expect a lower offer. If you are a PhD. with 30 years of experience, you can expect more.
Pinpoint Salary Service can prepare an individual report for a fee of $95.00 showing salaries for 3,500 jobs indexed to 165 cities.
For more good information about careers, see the resources in the LINKS section.
WHAT VALUE DO YOU PRODUCE FOR YOUR EMPLOYER?
Your employer sees you as an investment. Just like any other investment, he expects you to produce a return, either in the form of increased income or increased savings. The more money you can produce or save, the more you are worth.
Your resume should highlight previous accomplishments in terms of measurable achievements. Remember that your employer, his Board of Directors and stockholders all have a keen eye on the bottom line. Your resume should show in specific terms how you have contributed to the profitability or effectiveness of your previous employers. Here are some examples of power phrases for your resume:
Produced sales in excess of $__________________.
Increased departmental revenues by _______________%.
Developed and implemented programs which resulted in an increase of ______% in production.
Implemented loss reduction programs reulting in corporate savings of $__________.
You get the idea. Remember that your boss has to report to his boss. You want to give him reasons to justify the company's investment in you. These reasons must be stated in terms that make sense to the people in the accounting department.
For ideas on power words to use in your resume, see
You should also demonstrate your value to the employer in terms of "human costs". An employee who can be easily and quickly assimilated into the organization is worth more than one who will require more time and money to train. An employee who is punctual, honest, friendly and coperative is worth more than one who is a constant pain in the neck. Use your resume and letters of reference to demonstrate how you will contribute to the working environment of your employer.
You will also demonstrate your non-monetary value to the organization in the hiring process. The people who process your application and interview you will also have to work with you. Let them know this will be a pleasant experience for everybody. For a very good article from the Wall Street Journal on the benefits of being congenial during the hiring and negotiation process, click HERE.
Calculating your wants and needs
Now that you know what you are worth in the job market, you need to answer two important questions:
1. How much will it take to support the lifestyle you would like to have?
2. How much do you need to provide the bare necessities?
Sit down and make two budgets. The first budget represents the kind of life style you would like to have. If you want to own a big house with a fancy car in the driveway and take vacations to Europe and Hawaii, how much money are you going to have to have to provide these things?
Your second budget is your worst-case scenario. If you can not find a job which will provide you with your dream life, how much do you need to keep a roof over your head and food on the table? There are several excellent resources on the Internet to help you make a budget:
Making a Budget from Frugal Living features steps in making a budget, a budget calculator and resources to enjoy life on a tight budget.
Basic family budget calculator individualized for communities nationwide and for type of family (e.g., one parent/one child, two parents/two children) offer a realistic measure of the income required to have a safe and decent though basic standard of living.
You now have three very important pieces of information. You know what you are worth on the job market. You know how much money it will take to support your ideal lifestyle. And you know how much money you need to provide the basics. If you find that your value in the job market is lower than what you need to meet your wants and needs, you might consider getting more education to improve your marketability. Here is a graph of the relation between education and income.
As you can see, the incomes for people with college degrees and advanced degrees continue to rise much faster than the incomes of those without a degree. High school graduates average about $7,000 more per year than dropouts. College graduates make about $15,000 more than high school graduates. And those with advanced degrees average about $20,000 more than those with a bachelor's degree.
Source: Census Bureau, Current Population Survey