“Is asking for a guarantee of an employer’s obligations – as mentioned in your Master Employment Checklist – realistic?”

Question: I recently purchased your Master Checklist for Employment Items to Negotiate from your “Model Letters” page. It is excellent, and a terrific roadmap for any executive changing jobs.

One point that specifically caught my interest was your addition of Guarantees of Employer Performance, including (a) Surety Bonds, (b) Letters of Credit, (c) Annuities, and (d) Parent Companies.

Are these realistic, and under what circumstances would a prospective employer release these?

Cary White
(City Not Listed)

Answer: Cary, that is a great question. To answer it, let me start by repeating what I say so often: what gives an employee leverage to get the things he or she wants from an employer is the simple notion of  “Perception of Value.” (This is explained in greater detail in my newsletter entitled “Locating Leverage with Your Boss,” which you can view by [clicking here].)

In my decades of helping people negotiate the terms of their employment, I have always found that if you have enough “Perception of Value” leverage, then you can get almost anything you want, including the very guarantees of employer obligations you refer to.

That is because every employer sees every prospective employee as a “human resource,” that is, someone who might cost X each year, but be worth 2X per year – or even 10X per year – to the company.

It’s important not to confuse Real Value with Perception of Value. In the employment marketplace there is no absolute real value, as there is with an ounce of gold, which today is worth about $1,200 per ounce. That is real value. The special skills, knowledge, relation and insights that make perception of value in employment are not so easily measurable. But they do determine the “price” of hiring the right person.

How about a few examples:

Would you give a personal guarantee of salary to someone who you believed could increase your company’s sales by 500%?  Probably you would.
If you were about to hire the best football player of all time to be spokesman for a sporting goods company, and he was asking a seemingly very low price for his services, would you be willing to “back that up” with a letter of credit? Good chance you would.
If you manufactured laser machines, and you could hire the one person in the world with the insights on how to make them more powerful, but he asked you to post a surety bond to secure his guaranteed $25,000 bonus, I suspect you would do so in a minute.

Get the idea? In the right context, for the right “human capital” that represented the greatest “perception of value,” anything is negotiable. Incidentally, in my representation of (a) many senior executives, (b) several media celebrities, and (c) a few sports figures, I have successfully asked for each of the items you mentioned.

These are only examples, meant to illustrate the point. Everyone is capable of achieving security for payment and guarantees of performance if their perception of value is first there.

Hope that makes sense. It’s a simple notion that can be hard to grasp. Thanks for writing in.

Best, Al Sklover

© 2010 Alan L. Sklover, All Rights Reserved.