Copyright © 2015 SciPhD.com Negotiations with your advisor and your hiring manager pg 157 Randall...

Copyright © 2015 SciPhD.com

Negotiations with your advisor and your hiring manager

pg 157

Randall Ribaudo, PhDLarry Petcovic, MS2

Co-founders, SciPhD.com


Negotiations 101

• Negotiation is a dialogue between two or more people or parties intended to reach an understanding, resolve points of difference, to gain advantage for an individual or collective, or to craft outcomes to satisfy various interests. http://en.wikipedia.org/wiki/Negotiation

•Two Primary Strategies• Distributive – also called positional or hard-bargaining

• Integrative – also called interest-based or principled

http://en.wikipedia.org/wiki/Negotiation

http://en.wikipedia.org/wiki/Negotiation


Distributive:also called positional or hard-bargaining

• 1. implies that there is a finite amount of the thing being distributed or divided among the people involved.

• 2. win-lose because of the assumption that one person's gain results in another person's loss

• 3. each side often adopts an extreme position, knowing that it will not be accepted

• 4. Simple everyday examples would be buying a car or a house.


Integrative:also called interest-based or principled

• 1. attempts to create value in the course of the negotiation ("expand the pie")

• 2. creative problem-solving that aims to achieve mutual gains. It is also sometimes called win-win

• 3. focuses on the underlying interests of the parties rather than their arbitrary starting positions

• 4. Example would be negotiating with your advisor or hiring manager for higher starting salary.


Negotiations 101

• Case Study: You are at your monthly advisor meeting and your final results of your 3 years of research is mind blowing. Your advisor is so pleased that he/she announces that you have been awarded another major grant to expand on the results.

• Now what??


WARNING

• Advisors may take a Distributive approach upon learning of your intended departure. DO NOT GO DISTRIBUTIVE in your negotiations except as a very last option. You may lose or win at a very high cost unless you have prepared for this situation.

• Hiring Managers and HR during your interview will normally be willing to negotiate in an Integrative manner as long as you stay Integrative. If you go Distributive, YOU WILL BE THE LOSER AS THEY HAVE ALL THE MARBLES!!!


Rule 1 Never negotiate just your salary!!

Always negotiate

your

Total Compensation Package


Total Compensation Package

• Base Salary• Bonus – Sign On - Performance• Medical benefits coverage—include amount paid by employee and employer

• Paid leave—include vacation/sick, holiday, personal, bereavement, military pay, jury duty, etc.

• Disability insurance• Life insurance• Employee assistance program• Retirement benefits—include 401(k)/403(b), pension plans, etc.

• Educational assistance programs• Relocation expenses• Equity opportunity


Special Case: Equity Opportunity

• Common with startups, small companies and executive level

• Stock Options - company grants an employee options to buy a stated number of shares at a defined grant price.

• Restricted stock - provide employees with the right to purchase shares at fair market value or a discount, or employees may receive shares at no cost.

• Phantom Stock - grant not stock but rather the right to receive an award based on the value of the company's stock.

• Employee Stock Purchase Plans (ESPPs) – formal plan to buy stock at discounted price.


Base Salary- Pay Attention

Job Title Base Salary Total Compensation

Scientist I $87, 725 $124,144

Scientist II $104,106 $148,534

Scientist III $120,521 $171,091

Each job title has a different pay range

Benefits may vary by job title

Job titles may determine your next job eligibility


glassdoor.com


Best fit Title?

Job Description for Scientist I - Biotech

Performs a variety of laboratory procedures using established synthetic methods and techniques under general guidance. Conducts experiments, some moderately complex. Conducts and interprets routine spectroscopic data (i.e., NMR and IR). Requires a Ph.D in area of specialty and 0-2 years of experience in the field or in a related area. Has knowledge of commonly-used concepts, practices, and procedures within a particular field. Relies on instructions and pre-established guidelines to perform the functions of the job. Works under immediate supervision. Typically reports to a supervisor or manager.


Best fit Title?

Job Description for Scientist II - Biotech

Supervises and works alongside associate scientists in their daily operations and research in diverse biological areas. Requires a Ph.D in their field of specialty and 3-5 years of experience. Familiar with a variety of the field's concepts, practices, and procedures. Relies on experience and judgment to plan and accomplish goals. Performs a variety of tasks. May lead and direct the work of others. A wide degree of creativity and latitude is required. Typically reports to a manager or head of a unit/department.


Best fit Title?

Job Description for Scientist III - Biotech

Supervises and works alongside associate scientists in their daily operations and research in diverse biological areas. Requires a Ph.D in their field of specialty and at least 6 years of experience. Familiar with a variety of the field's concepts, practices, and procedures. Relies on extensive experience and judgment to plan and accomplish goals. Performs a variety of tasks. May lead and direct the work of others. A wide degree of creativity and latitude is expected. Typically reports to a manager or head of a unit/department.


Most Critical Base Salary Question?



• At what percentile will I be paid?

• Determines rate of increases• Determines % of increases• Determines next position title



• At what percentile will I be paid?

• Lower percentile has larger increases more frequently

• Higher percentile has smaller increases less often

• Scientist III Base• 10th – $97,679

• 25th – $108,565

• 75th - $133,190

• 90th - $144,723


What is your logic for Base Pay Percentile?

•Meet basic job description requirements

•Bring additional value to this job with your contribution

•Bring additional value to company with your contribution

• Scientist !!! Base• 10th – $97,679

• 25th – $108,565

• 75th - $133,190

• 90th - $144,723


Think Total Compensation Package

• What is Total Compensation package?

• Ask what is percentile of advertised Base Salary.

• Do you bring significant additional value to job and/or company? If so, suggest a new percentile and Base Salary.

• Does Title give you opportunity for next position?

• Can you negotiate elements of Total Compensation Package?

• What does your research show as comparable salaries for same job in same city?


Think Total Compensation Package

Your turn:

• Assume the advertised Base Salary for a job is 70K at 40th percentile and you need 85K for your cash living expenses which is 60th percentile. No discussion of other benefits have been presented. You meet all requirements and bring additional value to the job.

• Using the Integrative negotiations approach, how do you get your compensation to 85K?

• Use Total Compensation Worksheet


Think in terms of a 3 year time horizon

• 1. If you like company …

• 2. If you like job …

• 3. If you like team …

• 4. Know your Total Compensation Package

• 5. How quickly can you get an increase?

• 6. Is there a promotion opportunity within 3 years?

• 7. Where will you be in 3 years with this job?

• 8. Do you have other alternatives that are more attractive?

• Remember: This is not your job for life but it is a foot step on your career path!!


Integrative Negotiation tips!

• They vote with Paycheck.

• You vote with “seat or feet”

• Understand how company sets Compensation offers.

• Wait for topic to be raised.

• Talk Total Compensation with Base Salary component.

• Avoid getting defensive – Emotional Intelligence

• How do you add value to job – Social Intelligence

• Reinforce common goals.

• Normally hiring manager or HR will negotiate compensation.


Financial Literacy1, 2, 3…

Randall Ribaudo, PhDLarry Petcovic, MS2

Human Workflows, LLCCo-founders, SciPhD.com

Pg. 167


Who Needs Financial Literacy?

• Job Opportunities that blend science and financial acumen

• Competitive for Job Opportunities at Interviews etc…

• What is your tolerance for financial risk with your employer??


Remember the 2 Rules of Business?

1. Make a Profit

• Income Statement(Profit and Loss Report)

• Balance Sheet(GAAP)

• Past, Current and Future

2. Constantly Improve

• Performance Metrics

• Return on Investment

• Internal Rate of Return


Basic Finance TermsRevenueCOGGross IncomeSG&AOperating Income (EBITDA)DepreciationEBITInterest ExpensesPreTax IncomeCorporate TaxesNet Income After Taxes


Will PostDoc Industries (PDI) sustain growth???

•Players Include:

• PDI Executive Team• Medical Device Div• R&D Pharm Div• 6 Organizations doing business with PDI• University Bank• PhD Investment Funds• NYAS Capital Advisors• NIH• NEX Gen Holdings with 2 companies• Pharma Pipeline Partners with 2 companies


Basic Finance Terms

PDI Revenue is 36 Million expected for 2015.

2015 – 36 million2014 - 33 million2013 - 22 million2012 - 11 million


Basic Finance Terms:Gross IncomePDI Revenue is 36 Million expected for 2015.

2015 - 36 million2014 - 33 million2013 - 22 million2012 - 11 million

Is there a Cost of Goods? (Cost of Production)2015: 19 million

Subtract COG from Revenue to get Gross Income

For PDI:$36 M (Revenue) - $19 M (COG) = $17 M (Gross Income)


Basic Finance Terms:Operating Income

Now subtract Selling, General and Administrative expenses. This is called SG&A.

For PDI $12 million for 2015 SG&A

Operating Income is the Gross Income less the SG&A cost

For PDI:

$17 M (Gross Income) - $12 M (SG&A) = $5 M (Operating Income)

Also called EBITDA which is an indicator of the cash flow


Basic Finance Terms:EBIT

now we subtract Depreciation/Amortization

$5M (Operating Income) - $2 M (Depreciation) = $3 M (EBIT)

EarningsBeforeInterestandTaxes

“Operating Earnings”


Basic Finance Terms:Net After Tax Income

Finally we take Operating Earnings and subtract Interest:

Borrowed $20M at 15% interest: $3M

$3M (Operating Earnings) - $3 M (Interest) = $0.00 Net Income Before Taxes

PDI Corporate Taxes are $00.00

Net After Tax Income of $00.00


Basic Finance TermsRevenueCOGGross IncomeSG&AOperating Income (EBITDA)DepreciationEBITInterest ExpensesPreTax IncomeCorporate TaxesNet Income After Taxes


Organization Basics 101

PDI Inc. Executive Team

• (CEO) Chief Executive Officer• (COO) Chief Operations Officer• (CFO) Chief Finance Officer• Chief Pharm R&D Officer• Chief Medical Device Officer



PDI Inc. Medical Device Division

• President MDD-PDI• SVP Business Development



PDI Inc. R&D Pharm Division

• President R&D-PDI• SVP Business Development


PDI Market 101

Where’s the money

• University Bank

• PhD Investment Funds Group

• NYAS Capital Advisors LLC

Other Players

• NEX GEN Holdings LLC• 2 companies

• Pharm Pipeline Partners Inc• 2 companies


PDI Market 101

Medical Device Customers

• Head Users Inc• Torso Users Inc• Appendage Users

R&D Pharm Customers

• Rare Disease Inc• Big Buck Disease LLC• High Risk Disease


PDI Market 101

• Government

• NIH – National Industries for Health• $35 M available for R&D• $40 M available for Devices• $10 M available for as needed


The Set Up for PDI Inc.

The Marketplace• PDI Executive Team• Medical Device Div• R&D Pharm Div• University Bank• PhD Investment Funds• NYAS Capital• PDI Customers – 6• NEX GEN – 2• Pharma Pipeline - 2

Set Up and Planning

• Know $500 M in market• Know PDI looking for first

profitable year 2016• Each Table has:

• Situation card• General role card• Specific goals for today• Money in $1 M increments


GO!!!


Set Up and Planning





DEBRIEF


Set Up and Planning





Who Needs Financial Literacy?

• Job Opportunities that blend science and financial acumen

• What is your tolerance for financial risk with your employer??


Questions

Copyright © 2015 SciPhD.com Negotiations with your advisor and your hiring manager pg 157 Randall...

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