Negotiating your salary is often essential for getting a compensation package that meets or exceeds your expectations. Unfortunately, many job hunters hesitate to do so for fear of offending prospective employers and costing themselves a job offer.
While you must handle negotiations tactfully, you shouldn’t be so afraid of rocking the boat that you fail to advocate for yourself.
Here’s what you need to know to get the pay you deserve, including why negotiating is so valuable, how to prepare for the conversation, and what to do during the discussion to maximize your odds of success.
Why Should You Negotiate Your Salary?
Negotiating with a prospective employer can be intimidating, and many professionals are reluctant to risk it. In 2022, Fidelity Investments found that 58% of working Americans accepted the initial offer for their current positions without negotiating.
However, those that negotiate are more likely to get what they want than you might expect. The same Fidelity study found that 85% of Americans who negotiated their previous job offers got at least some of what they requested.
In addition, CareerBuilder found in 2016 that 73% of employers reported being perfectly willing to negotiate salary. The data is a little outdated, but there’s little reason for that number to have decreased. In today’s tight labor market, it may have even increased.
The risks of negotiating may be low, but the benefits are significant. Negotiating a higher salary increases the floor for all your future raises. Even if you never negotiate again, that can considerably increase your lifetime earnings.
👉 For Example
Imagine you’re a college graduate with a $50,000 job offer. If you accept the salary without negotiating, stay at the same job indefinitely, and receive 3% annual raises, you’d earn $697,761 over the next decade.
Had you negotiated your initial job offer up to just $52,500, you’d earn an extra $35,000 over that same ten-year period. If you got it up to $55,000, you’d generate an additional $70,0000. A $60,000 starting salary would translate to an extra $140,000. You’d see even more drastic results if you changed jobs every few years and negotiated each time.
If nothing else, negotiating with your employers demonstrates characteristics that can increase their perception of your value as an employee. For example, it shows that you know your worth and are confident enough in your communication skills to advocate for yourself in stressful situations.
How to Prepare to Negotiate Salary
A successful salary negotiation begins well before you initiate the first conversation about your compensation. Let’s look at some of the most important ways to prepare for the discussions.
Negotiating your salary is almost always a good decision, but ‘almost’ is the operative word. Though rare, there are circumstances where it would be inadvisable to ask for additional pay.
Most commonly, it’s a bad idea to negotiate salary after you’ve already accepted an offer verbally or in writing. Not only will you have a tough time convincing your prospective employer, but you’re more likely to give a negative impression. It might not cost you the job, but you don’t want to get off on the wrong foot in your new role.
It’s also worth considering the degree of negotiability in your salary. Your leverage can vary significantly depending on your qualifications and your prospective employer’s needs, which should inform how aggressively you negotiate.
👉 For example: a recent college graduate with no work experience will generally have less negotiating power than someone with years of relevant experience and a proven track record.
Assess Your Market Value
To negotiate your salary effectively, you need to know what your labor is worth. That can mean the difference between making a counteroffer you can realistically obtain and throwing out random requests based on what you’d like to earn in a perfect world.
Fortunately, it’s easier to assess your market value than ever, thanks to sites like Glassdoor and Salary.com. You can use them to explore compensation packages belonging to individuals with your qualifications in similar positions or even those who held the job you’re interviewing for previously.
Average salaries can vary widely with location, so try to understand what similar positions are paying in your area.
Figure Out Who You’re Negotiating With
Most companies will put you through several rounds of interviews. Depending on the company, you might meet with the human resources manager, hiring manager, prospective boss, and even your future coworkers before you get an offer.
As a result, it can be challenging to figure out the right person to ask about compensation. If you’re unsure, consider asking your recruiter if you have one. A prospective coworker might also be able to speak from experience and point you in the right direction.
Once you have that information, do some research on the individual with whom you’re going to be negotiating. Look for things you have in common that will help you build rapport and make them like you before you make your requests.
In addition, consider their position when deciding how to approach your negotiations. For example, it may be less risky to negotiate aggressively with an HR representative. Conversely, you probably want to be more respectful when negotiating with a prospective boss to avoid negatively affecting your future working relationship.
Practice Your Pitch
Negotiation skills are as critical for employees as for independent contractors, but employees tend to get much less practice. Most W-2 workers stay at their jobs for about four years. That means you’ve likely negotiated only rarely, and it’s probably been a long time since you’ve had reason to do so.
As a result, you shouldn’t expect to walk into your prospective employer’s offices and navigate your salary negotiations with ease. As with everything else, practice makes perfect, so spend time working on your pitch before you give it.
Generally, it’s best to practice with another person, so ask a friend, family member, or partner to help you. The exercise will be most effective if they can give you a realistic response, so consider choosing someone in your network with relevant experience.
How to Negotiate Your Salary
Preparation is critical to successful negotiations, but there’s just as much to think about when it’s time to execute. Let’s discuss some of the choices you’ll have to make when negotiating and the pros and cons of various options, then outline some tactics and techniques that will help maximize your chances of success.
One of the first strategic decisions you’ll have to make is when to bring up the subject of compensation. Generally, your two primary choices are during the interview process or after you’ve received an initial job offer.
The most significant benefit to asking during the interview process, especially relatively early on, is that it lets you determine whether it’s worth continuing. Since each job you interview for requires hours of work and weeks of waiting, you can save a lot of time by addressing compensation upfront.
However, the earlier you bring up salary, the more likely you’ll come across as tactless to your prospective employer. Everyone knows that pay is one of your most important considerations, but discussing money can still strike some people as being in bad taste.
Ultimately, there’s no universally correct choice, and you’ll have to make a calculated decision based on the circumstances. For example, it might make sense to bring up compensation early if you already have a job offer from another firm.
Not only would you be on an understandably shorter timeline, but you’d also have less to lose by accidentally offending the second prospect.
Many people find negotiating stressful or intimidating, which makes it tempting to raise the issue via email. That’s not necessarily improper if you received your initial offer via email, but you’re generally better off negotiating over the phone, via video, or in person.
As nerve-racking as it can be, negotiating through a medium that facilitates eye contact, tone, and body language makes it much easier to convey what you intend. It also lets you get live feedback from the person you’re negotiating with, adjust your tactics on the fly, and resolve the issue more quickly.
Meanwhile, negotiating through email puts you at risk of projecting a lack of confidence or communication skill, which can negatively impact your chances of success and your future relationship with your prospective employer.
Negotiation Tactics and Techniques
Negotiating is a lot like closing a sale, and it’s beneficial to approach the discussion like a salesperson with a bag of tricks.
♟️ Here are some tactics and techniques that can increase your odds of getting the compensation you want:
- Use other job offers: Multiple offers prove you’re in demand, increasing your leverage and giving you more confidence. Always interview with several employers at once, so you can make moves like asking one to match another.
- Bring clearly defined goals: Come to the discussion with an understanding of your ideal salary, the range you’ll accept, and the number that will cause you to walk away. Remember to calculate these amounts using your market value.
- Frame the discussion as cooperative: Negotiation isn’t a chance for each party to win money away from the other. It’s about collaborating for mutual benefit, so aim to create a fair package that works for you and your employer.
- Focus on showing your value to the company: Don’t ask for money based on how much you want to make. Instead, show that you deserve more pay because of the value you bring.
- Negotiate for more than salary: Use other aspects of your compensation to get a deal that works for you. For example, you can negotiate for more vacation, flexible hours, or tuition reimbursement if they’re unwilling to budge on pay. Alternatively, you can make a point of sacrificing them to ask for more money.
Fortunately, it’s not always necessary to pull out all the stops. If the person you’re negotiating with seems reasonably amenable to your requests, there’s probably no need to launch a full-court press.
Negotiation Mistakes to Avoid
We’ve outlined a game plan for preparing for negotiations and handling yourself in the actual discussions.
⛔️ Lastly, let’s review some mistakes prospective employees commonly make when negotiating to help you avoid them:
- Showing your hand: Try not to give away more information than necessary. For example, sharing your salary gives prospective employers the opportunity to lowball you by offering only slightly more than what you’re currently making.
- Lying to get what you want: Similarly, it’s tempting to lie about your salary to trick them into bidding higher for you. Ethics aside, that can be risky, as employers can check your earnings in some states.
- Neglecting rapport and connection: Winning over the person you’re negotiating with is essential, so don’t focus on pay to the exclusion of all else. Let your personality shine, find things you have in common, and remember to smile.
Avoiding mistakes like these can help optimize your chances of getting the pay you want, but try not to stress about being perfect. Remember, most employers expect you to negotiate your salary and will be willing to work with you.
Practice Your Negotiation Skills
There’s a lot to keep track of when you’re negotiating your salary, and it can be incredibly challenging to manage it all at once. You’ll probably need extensive practice to become effective at the tactics we discussed.
Training with people you know is helpful, but there’s no substitute for a live experience. When you’re not desperate for a job, test your negotiation skills in legitimate interviews. With less pressure and a longer time horizon, you can master the skills you need to get your ideal compensation package.
📗 Learn More: 20 Weird Jobs That Pay Surprisingly Well in 2023