Holy popcorn. There’s nothing more nerve-wracking than asking an employer for MORE.
More job perks.
A better job title.
Who wants to appear needed or greedy to a boss?
Who wants to get into a heated discussion to reach an agreement about salary or other perks?
What you don’t know about salary negotiations:
Employers expect to negotiate.
Negotiations over salary and benefits are common. And, an expected part of the interview process. And, common after hiring as well.
Some employers go so far as to throw out artificially low salaries to give themselves wiggle room for the negotiations.
Not planning for this could cost you thousands of dollars lost salary.
Hiring companies do their homework before negotiating salaries too.
RobertHalf.com, a staffing firm tells their clients to “know their ceiling.” When negotiating salary for a top job candidate, know how far to go.
On the flip side, companies are aware of basement salaries as well.
And, cost savings occur during salary negotiations too.
One way hiring companies SAVE MONEY is by acquiring top talent at below value prices.
Your Greatest Vantage Point
Imagine for a moment that the employer gives you a starting salary point.
We have an offer in hand, so why rock the boat?
There’s a risk that the employer moves on to another candidate, right?
But, here’s a fact that may make you stop and reconsider your reservation:
Your greatest leverage for a higher wage and benefits is in the beginning. When you’re first offered the position.
Failing to negotiate for a higher salary could have long-lasting repercussions too.
Future raises and bonuses align with current numbers.
Companies base raise increased on current salaries. So, let’s consider a modest yearly salary increase.
Let’s call it a standard of living bump.
For example, let’s examine a 5% bump in pay on a $40,000 salary.
Over a five-year period that equates to $11,051.26 in salary increases. (Note: Ending yearly salary after five years would be $51,051.26)
A 5% pay raise on a salary of $58,000 results in $16,024.33 in salary increases. (Ending yearly salary after five years would be $74,024.33)
You might be thinking, “that’s not much of a difference.”
But, when you consider that step increase over the course of a career … well, those numbers could be FAR apart.
Also, we didn’t factor bonuses into these numbers. So, the financial difference could be $10,000 – $25,000 more.
Though, that’s not the only bad news.
There’s more to consider than the dollar amount.
For example, accepting a lower salary may:
- Leach away at your job motivation
- Make you feel exploited by your employer
- Chip away at your self-esteem
A successful salary negotiation is important to your long-term happiness and career success.
4 Tools To Help You Find The Right Salary to Negotiate
Indeed offers a salary comparison and research tool. Click here to check that out.
Glassdoor also has a salary search tool. It allows you to research salaries based on job title, company, and location.
Professional associations are another great to research salaries based on job role. Associations don’t always have benchmark salary data. But, some do.
Another place to find relevant salary data?
Professional networks. LinkedIn is a professional network. So, we recommend that you start there.
Yes, there are two occasions when salary negotiations are not in your best interest. First, when the salary and benefit packages is already at the high end for your position/industry. Using 1-2 of the above recommended salary tools will help with this. Second, when you can provide no definitive, fact-based argument for that higher salary. Just because you want more doesn’t mean you deserve more. This is when continued education and job performance come into play.
This List of 5 Questions You MUST Answer Before Accepting Any Job
You need a non-foggy idea about what (on average) your new position will pay and how x-factors affect it.
A candidate’s earning potential is influenced by a number of x-factors.
For example, how much experience he or she has.
The country/state/city he or she is located (think: cost of living differentiation).
The amount of education he or she has.
And, the sought-after job skills that are brought to the negotiating table.
All this is fine and dandy to ensure your “house” is in order.
But, you need to research the company too.
For example, here are 5 questions/details you need details for:
- What’s the company’s average salary for your job role?
- Is the company financially healthy?
- What do current employees say about their employer? (Connect with 1-2 employees via LinkedIn to help with this)
- How’s the company’s overall brand? (Use online review sites, such as Yelp, for this)
- How much does the company hire? You can spot high turnovers at smaller employers; not as easy with larger employers
Use This Book to Boost Salary Success
There are strategic ways of boosting salary negotiations.
A brag book comes to mind.
Few professionals use brag books, despite the benefit they offer during job promotions and salary negotiations.
Are you new to brag books?
A brag book is pretty much what it sounds like.
A compiled book that represents all your braggable details.
- Letters From Superiors
- Letters From Clients
- Sales Successes
- Departmental Performance
- Company-Wide Successes
- Lists of Your Most Notable Achievements With Each Employer
- Cost Reductions
- Realignment to Internal Systems & Processes
- Improvements to Corporate Culture
Your brag book also makes a great place to keep your references.
When collecting references for your brag book, don’t assume they’ll make the most glowing remarks about you.
In fact, always verify what others are saying about your job performance by using a reference checking service.
Costs range from $30 to $100 for each reference.
How Much Should You Ask For
Once you’ve figured out what your position pays and, move to the logical third piece of the equation: what salary figure to ask for.
Negotiations guru, Heather Mills, recommends “going high.”
Asking for the higher end of your salary range taps the psychological principle of anchoring, according to Mills.
There are 2 potential backfires to this strategy.
First, asking a salary on the higher end of the range may price you out of future salary increases if you do get the job; at the least, it could measurably reduce future increases.
Second, and perhaps most worrisome reason is that asking too high of a salary figure may just take you out of the running for actually getting the job.
Now obviously there are exceptions to this rule of thumb.
For example, someone who holds a unique set of skills, a set of skills that is hard to find in the marketplace, can safely ask for a higher compensation. Similarly, a job seeker who comes to the table with a great deal of experience may also safely ask for a higher-end compensation.
But, barring exceptions like these, you may want to stay safe and aim for the middle of the road when considering what salary figure to ask.
What Happens If You Hear “No”
Salary is only a part of the compensation package.
The other part of the package are the benefits and perks (e.g. better job title) that are being offered.
In figuring out a salary figure to negotiate for, these must be taken into consideration as well.
Ideally, when you researched your company and the pay scale for your new position, it provided you better insight into what kind of benefit packages are typically offered.
That’s very valuable information because one common strategy in entering into a compensation negotiation is to use benefits and side perks as a Plan B option.
What does that mean?
That means that if your employer says no to the salary figure you counter-offer with, you can move on to a Plan B, which would be proposing an increase in your benefits and side perks in lieu of an increase in salary.
There’s a couple of strengths about having something like a Plan B in your back pocket: first, it demonstrates flexibility on your part, which is always good.
But more subtly, some employers are simply hamstrung by budgetary restrictions.
They may really want to grant you a higher salary, but it’s just not in the company’s budget to do so.
Toss in the idea of supplementing your benefits and/or side perks, say three weeks of vacation a year instead of two, instead of increasing salary and that just may circumvent the whole budget issue.
All to say, your suggestion of supplementing benefits and side perks in replace of a salary increase can be a great compromising tactic.
And here’s one more compromising tactic to keep in mind: at the beginning of the negotiation, ask for several perks that you could actually do without.
That way, during the negotiation, you can opt out of the perks in lieu of an agreement for a higher starting salary.
Be prepared to back-up your case of why you deserve a higher compensation.
So, you’ve done some information gathering and have an idea now of a salary figure that you’d like to shoot for. Now comes the third and final step in preparing for the negotiation: preparing your case for why you deserve to be paid a higher compensation.
As mentioned, it’s important to not simply negotiate for negotiation’s sake.
Not only will that be detrimental to getting the target salary you want, it will also make you seem money-grubbing and argumentative.
In a worse case scenario, it could cost you your new job.
No, in order for your salary or benefit negotiation to be successful, in order for you to leave the table with what you asked for, you must be able to provide definitive and preferably factual-based evidence for why you should be paid a higher salary.
So, the third step in your preparation is coming up with these definitive and results-centered arguments.
Let’s give you a couple tips on how to make this step in the preparation process easier and hopefully that much more successful.
When preparing your case, it’s important to remember not to focus on what you’ve done in previous jobs.
Remember, the most significant thing your potential employer cares about is what value you will bring to their company.
If they feel that you will bring limited value to their company, chances are they will be far more cautious in okaying a higher salary.
So, frame your arguments around what kind of value you have and what you will do to improve their business.
Address topics such as how you will save your new employer money. How you will make the company’s processes more efficient or less labor intensive.
What kind of special skills or knowledge you will bring to the table that no one else can provide.
Provide strong arguments around topics like these and it will help you firmly and convincingly make the case for why you deserve a higher compensation.
Additionally, don’t be afraid to use the information you gathered about the position’s pay scale to provide a further argument.
It’s a great way to ground your arguments around the objective, non-biased facts.
Also, it will show that you took the time to actually prepare for the negotiation meeting, which, in turn, will demonstrate that you genuinely are invested in the negotiation’s outcome.
Last but not least, do not fail to highlight your selling points. Are you a candidate who has loads of experience?
Are you young and ambitious and willing to work fifty-hour work weeks to get the job done?
Figure out what sets you apart from the rest of the candidates and highlight this. It’s a great way to further enforce the value you bring to the company.
We’ve now thought a lot about how to best prepare for the salary negotiation.
Why don’t we move on to discussing the negotiation itself and how to best act in order to get what you want.
Find Out The Do’s & Don’ts.
Okay, you’re ready. You’ve done your research, you’ve prepared arguments for why you deserve to be paid a higher compensation and you’ve come up with a salary figure that you’d like to negotiate for. Excellent.
But, now other questions come to mind.
Questions like are there things that can be done during the actual negotiation that will help its success?
And on the flip side, are there things that could jeopardize the negotiation entirely?
Well, both questions are with a yes. So let’s begin with the positive end and describe some things that, if done, will strengthen your chances of orchestrating a successful salary negotiation.
First and most importantly, keep a positive frame of mind and a professional attitude.
Negotiation is giving and taking. And, a natural part of negotiation is receiving some pushback from the person you’re negotiating with.
Therefore, after you make a counter-offer, you may receive reluctance or hesitation from your potential employer.
Use These Words — Not These
Language is key and how you frame your counter-offer goes a long way in determining whether you’ll successfully get what you ask.
You will bring value to the company.
You do have skills that no one else has.
You do offer the benefit of years of experience.
Let the strength of these arguments help you maintain a positive frame of mind.
Using “we” instead of “I”.
Using “we” instead of “I” will elicit respect from your employer since it will demonstrate that you’re keeping him and his company’s priorities in mind, even in the middle of your salary negotiation.
Additionally, it will reinforce the impression that you are a team player and not simply looking out for yourself.
Gain more respect from your potential employer and the negotiation process will go smoother.
Checklist of Salary Dos & Don’ts
Here Are The Salary “Dos”
1. What’s the best way to approach your boss for a raise?
Opt for face to face whenever possible; avoid salary negotiations via email or by another company forum (Intranet).
2. Approach the meeting like a job interview or business meeting.
But, keep it lighthearted and non-threatening so participants feel comfortable discussing the issue.
3. Some salary negotiation experts believe using percentages as opposed to dollars makes more sense during salary negotiations.
So, if you’re making $50,000 and think you deserve $55,000, put it in the context of a 10% raise. It’s worth noting a cost-of-living increase, once estimated at 2% is now calculated between 3% and 7% — specifically within highly populated areas such as NYC and Los Angeles.
4. When making your proposal, think of asking for a number higher than you think you can get.
This is a negotiation.
Give your boss room wiggle room to counter with a lower number that’s comfortable for you.
5. Do NOT threaten to leave if your new employer is not accepting of your counter-offer.
It’s a fact – threats never work in a salary negotiation.
6. Do NOT mention personal hardships or any financial obligations, such as mortgage, when negotiating higher compensation.
Your direct supervisor/manager may care about your hardships. The person managing the company money will not.
Whether or not the employee has two kids or five kids or has a mortgage or rents has no bearing on how much he or she is qualified to earn.
The employer knows this and mentioning personal financial circumstances is guaranteed to have no impact on the discussion whatsoever.
Here Are The Salary “Don’ts”
1. Don’t attend the meeting unless you have a list of your workplace accomplishments in hand.
Quantify improvements you’ve made, the problems you’ve solved, and particular victories you’ve had.
2. Don’t attend the meeting unless you know the market value of your job, both inside and outside of your workplace.
For most companies, the human resource departments have pay scales for particular jobs. Find out what the range is for your job, what the maximum salary would be, and how performance is evaluated.
3. Don’t ask for a raise based on your increasing personal financial obligations.
For example, if you’re asking for a raise because you just purchased a new house or are expecting triplets or want to buy a new Hummer, that’s not going to fly with your boss.
4. Don’t jump into action too quickly.
Salary negotiation should be approached as a long-term goal, which requires some laying of groundwork.
Although this last section ended on a somewhat somber note, hopefully, this guide proves both confidence-boosting and helpful.
Yes, negotiating a higher salary when beginning a new job is not the easiest task.
But, here’s the thing.
If you prepare for it – if you prepare your arguments, do your research and understand how to act during the negotiation itself – you have a very real possibility of getting what you ask for.
In the end, just remember this – you’re the talent that your new boss has been searching for. He wants to bring you in as a happy addition to the team.
Convince your boss that the talent you bring to the company deserves a higher pay and he’ll be very hard-pressed to say no.