The ability to negotiate your salary is the most profitable career skill you can develop. It doesn’t actually matter how talented or educated you are if you can’t ask for what you’re worth, which is why it’s so important to be able to ask for more money.
How To Negotiate Your Salary
Step 1: Know the business, industry, and what others are getting paid.
We all know there are higher paying professions and industries than others. Glassdoor provides a great database of jobs and salaries so you can get an idea of what’s common in your industry. Knowing what’s the norm and where you stand (either entry level or with a few years work experience) is crucial to making sure you ask for the right amount when you negotiate your salary. Generally salary negotiation doesn’t work well, but is not impossible, in unions, not-for-profits, or internships. In these cases wages are usually fixed by pre-determined agreements or limited by lack of resources. Generally, all else is fair game. Researching your role and industry is the first step to making a reasonable ask of your current or future employer. If the average salary in your profession is $50,000, you probably can’t ask for $70,000 but if the average is $100,000 you don’t want to lowball with $70,000. Knowledge is power, kids, especially when it comes to the amount you should be paid.
Step 2: Be able to show your worth.
The single best thing I’ve ever done at each of my jobs is record everything I do in a small black daytimer. Why? Because when a project was executed successfully, I had a detailed record of it. Keep track of everything you do at work, particularly if you’re going above and beyond your regular job description. Whenever you accomplish something major, collect the results (ie. data from number of attendees at an event, financial results exceeding set goals, glowing reviews from key customers) and either put them in your record keeping book or store them in a folder to refer to later when you negotiate your salary. You can’t just ask for a raise or higher salary because you want one, you have to be able to provide tangible evidence that you’ve earned a higher wage.
First job out of college? Think of your academic and extra-curricular accomplishments. Class standings, scholarships, awards, participation in clubs, varsity sports, and community involvement, are all things that show leadership, dedication, and commitment. Think about what skills you’ve developed in the past that can directly translate to your new role now. I used my experience as a summer laboratory instructor to win me my job in academia after graduation. For my current role, this website was a portfolio of my capabilities as an entrepreneur. You might be surprised what you’re doing outside of school and work that is a real testament to your skills. Make sure you sing your own praises in the salary negotiation game!
Step 3: Know when to ask.
There are no real bad times to negotiate your salary (except maybe if your company is doing major layoffs) but there are times that are better than others. The best times to negotiate your salary are:
- Your first job offer of your first career role.
- When you are changing roles within the same company.
- Your semi-annual or annual review.
- 2-4 weeks after you have successfully completed a major project.
If you’ve missed the above and haven’t had a conversation about your pay for a long time, gather the material from Steps 1 & 2 and set a meeting with your boss to talk about the opportunity to negotiate your salary now.
Related: The book What Color Is Your Parachute? is one of the best all-around job hunting guides for new grads. It provides advice on everything from how to write a killer resume to how to negotiate your salary.
Step 4. “He who speaks first loses”.
I don’t know if this rule is necessarily true, but I adhere to it anyway. What it means is don’t be the first to throw out a number — let your employer suggest a salary before you do. Because you completed Step 1, you have a vague idea of what’s coming, but you should let them talk first to get an idea of where they are. Your employer’s goal is to pay you the least amount possible to get the most work possible, so their number is likely lower than what they’re really willing to pay. You need to hear it first so you can prepare an appropriate counter-suggestion. If they ask you for a number first, you run the risk selling yourself short by naming something to low, or discouraging them from hiring you by demanding something too high.
When you get the question,
“What are your salary expectations?”
“Based on my level of experience and educational background, I know your company will provide a competitive offer. I would prefer to discuss salary and total compensation when a formal offer is put forward.”
If they dodge the question and ask you again, this is the nitty-gritty of real negotiation and it’s usually uncomfortable. Don’t panic — or at least don’t let your panic show on your face. Stick to your guns and repeat your position. If they ask again, they’ll just make it awkward for both parties, at which point you can say, “I’m not comfortable discussing real numbers until I receive a formal offer”. But realistically they should give a figure, or will present you with the formal offer in a few days.
Step 5. Listen to their offer and provide immediate, un-detailed feedback.
When you receive your salary offer, express gratitude for it immediately. If it is good, say it’s fair. If it’s bad, say it’s fair. If you are interested in the company even after they give you a bad offer, it’s best not to exclaim anything like, “is this a joke?” because chances are they thought what they were giving you was fair. Express which parts you’re concerned about immediately. ie. “I was expecting the base salary to be a little higher” or “I am a little concerned about the amount of work travel expected of me.” This is important when you negotiate your salary because it gives them a clue to what you’ll be approaching them about in your counter-offer, and gives them some time to prepare something more generous.
Step 6. Don’t respond to their offer immediately. Take 24-48 hours to think about it.
This is the hardest part. People hate doing this if they’ve just been offered a job because you always have the sinking feeling that they’re going to ask someone else, but I promise you: if they’d made an offer, you’re the only candidate they want. Do not worry that they will rescind the offer they just made over the next 48 hours, because they won’t. They will typically offer you 1 to 3 days to review it, but if they don’t, express thanks and tell them directly that you would like 24 to 48 hours to review and think about it it. This usually does is actually gets the employer a little panicky that you might say no, which will make them more receptive to your demands.
Step 7. Ask for 10% to 15% more than they offered and other perks
Unless the initial offer was really low and you don’t mind scaring them off with big demands, you should aim to ask for approximately 10-15% more than you’ve been offered. You should expect to get approximately half of that. So if you ask for $10,000 more than they offered you, they will probably give you $5,000. I’ve had friends go for 25% or even 40% and pull it off, but those were unique circumstances, and unless you’re certain that should be your compensation, I would caution against it. Only you will be able to gauge what is appropriate when you negotiate your salary, because only you are in the situation. Trust your gut.
The second suggestion I would make is to look beyond the salary when it comes to negotiating your compensation package. Most people are so focused on the amount actually going into their bank account they forget there’s lots of room to get more money in different ways, like employer matched retirement plans. By all means negotiate your base pay, but you should also consider asking for:
- More vacation days
- Performance-based bonuses
- Increased health benefits or retirement plans
- Other perks: Ask for an office with a south facing window, ask for an automatic monthly reload on your Starbucks card, ask to work from home on Thursday mornings, whatever. If it’s something you would like, ask for it. It’s hard for your employer to say no to your demands right now because they want you to work for them. It won’t be hard once they have you in the job, so ask now while you still have the upper hand.
- The opportunity to review your compensation package in 3 or 6 months. If you’re not getting what you want right now, make the request for an opportunity to ask again in the near future. After 6 months, you will have proved your worth to the business and are more valuable than at the time of hire, which will put more weight behind your demands.
This way, even if your employer won’t budge on your salary, you’re essentially receiving more pay in other forms for the same (or if you get more vacation days, less) work. The most important point on that list, however, is the opportunity to review because your probationary period at a new job or in a new role is 3-6 months. At this point, you will have hopefully proved yourself and are trained in your role, and therefore more valuable to the company than when you started. Consequently, you can negotiate your salary at that time, and are likely to be successful.
Those are the steps & tips I have for you to negotiate your salary! Anyone else have any secrets? How did you negotiate your salary?