25 WAYS ON HOW TO SUCCESSFULLY NEGOTIATE YOUR SALARY
If you've never negotiated a salary, you're not alone. A recent study revealed that over 80% of workers have never asked for more money or a better position during a job interview.
As someone who has negotiated both my salary and hiring salaries on behalf of clients, I know how crucial it is to master this skill if you want to get ahead in life. Your starting salary can impact your earning potential by hundreds of thousands of dollars throughout your career. Negotiating should be part of every adult's financial literacy toolkit!
In this guide, we'll provide strategies to help you negotiate your next raise so that you can receive a higher income than ever before:
1. Salary Negotiation Basics
One of the most important tips I can provide is to begin thinking about salary negotiation at the very beginning of your job search process. You might be tempted to leave this part of the process until later in your search, but doing so could cost you dearly.
The reason for this is that as soon as you have a potential offer, companies are likely to begin comparing candidates against one another. If your salary requirements are much higher than the other candidates they've shortlisted, there's a great chance that the recruiter will move on to someone else who has a more reasonable pay range.
If you're currently employed and considering a new position or promotion with another company (or even your current employer), open a discreet dialogue about your career plans with your supervisor. This way, they will know what you are expecting and can begin planning for it.
Make sure to give this some thought before asking verbally. If you tell your boss, "I want to make more money," he's going to think you're an aggressive money-grabber who isn't satisfied with what you currently make. Instead, try asking something like, "what kind of growth opportunities are available for someone in my position?"
Note: If your company doesn't have a formal review process (or you're otherwise unhappy with your salary), it's worthwhile to look into setting up an annual review yourself. This way, you can ensure that every year on the same day or week, you give yourself and your boss a chance to sit down and talk about how well things went over the past year and what needs improvement going forward. You'll only want to do this if:
You meet regularly – at least once a month – with management or team leaders so they can give regular feedback. Upon completing with your boss, they'll be prepared to discuss where you stand and what opportunities exist to help you grow in the future.
The company offers a formal review process for employees. Suppose upper management conducts reviews and collects feedback from employees regularly. In that case, it's good practice to let them know how satisfied you are with your job, pay and benefits during these meetings. This way, they can make adjustments as necessary based on employee satisfaction levels. Without doing so, there's not much incentive for management to improve things if you don't communicate with them openly about your concerns or desires.
2. Get To Know Your Worth
If you want to get paid more money at work than previous co-workers (or past yourself!), then you'll need to know what the going rate is for someone with your job title and experience. This way, you can use this information as leverage during salary negotiations.
There are a few ways you can go about it:
Use sites like Glassdoor or Comparably to determine how much people in your company are making (or have made) on average for a specific position. Keep in mind that this figure might not be accurate, but they should at least give you a ballpark number of what other companies may be paying for someone with an equivalent background. You can also check out Payscale's Salary Negotiation Guide to learn more about pay ranges for different positions– both base salaries and bonuses – based on factors such as seniority and location.
Browse job sites for related positions in your area or industry to see what companies are paying for similar jobs based on different experience levels. For example, say you want to make $100K a year, and you know that the average base pay for a Software Engineer II is $90K. Ideally, you'll do this before asking for more money from your current employer, so it's easier to show them comparisons that prove your worth and value.
Once they realise how much business benefit an employee like you can bring in, all because of the increased responsibility that comes with a higher salary, it should become easier to get their approval. If not, try again next year!
3. Know Your Employer's Needs
To negotiate a higher wage, you need to know what your boss and the company want from you. This means being an active listener during meetings with management or talking with your supervisor about projects and tasks at hand (so you can share any suggestions or recommendations).
Take note of where your employer is headed – are they expanding? Will they be hiring more people in the near future? Are there plans for new technology to be implemented soon? All of these factors will play a role in how much someone in your position should make going forward, so it helps to stay up to date on key industry trends and news events.
4. Research Salary Statistics In Your Or Around Your Area
It may not be possible to get a competitive salary at work… if you don't even know what's considered competitive. It would help if you never accepted the first offer that comes your way, no matter how good they sound. Take the time to do a little research on what other companies in your area or industry are paying people with similar roles and responsibilities as yours and use the information as leverage during negotiations. If your boss can't meet or come close to this figure, then it might be time for you to look outside of your company for better opportunities!
5. Get Informed On Company Policies & Benefit Packages
If you want to negotiate a higher salary, you'll need to find out what benefit packages ( any bonuses, reimbursements, or non-cash benefits ) your company offers as well. This way, you can better understand what's reasonable to ask for when requesting an increase in base pay.
6. Don't Forget to Consider Taxes
It would help if you also considered the trade-off between take-home pay and total compensation (gross wages + benefits) when negotiating salary at work. Most employers will offer more generous benefit packages, so it might end up being worthwhile to choose cash over stocks if that means getting paid more in total each month. You can quickly run the numbers through a website like The Take Home Pay Calculator to compare different options.
It may not be possible to get a competitive salary at work… if you don't even know what's considered competitive. It would help if you never accepted the first offer that comes your way, no matter how good they sound. Take the time to do a little research on what other companies in your area or industry are paying people with similar roles and responsibilities as yours and use the information as leverage during negotiations.
If your boss can't meet or come close to this figure, then it might be time for you to look outside of your company for better opportunities! If you want to negotiate a higher salary, you'll need to find out what benefits the company offers as well. This way, you can better understand what's reasonable to ask for when requesting an increase in base pay. It would help if you also considered the trade-off between and(gross wages + benefits) when negotiating salary at work.
7. Don't Be Afraid To Make An Angry Face
In a study conducted by social psychologists from the University of Amsterdam and Harvard Business School, it was found that women who frown, furrow their brows or scowl all. At the same time, disputing salary offers can get 12% more compensation than those who don't display negative emotions.
8. Have A Written Memo Of Understanding Created In Case There's Any Dispute Over What You Agreed Upon Later On
This document makes sure you have proof of the terms for any verbal negotiations you had about your future pay rate. It should include things like: - The date when discussions took place about possible salary increases - The exact verbal terms that were agreed upon by both parties - Any documentation and/or supporting information (if applicable) that was used to substantiate your position This document makes sure you have proof of what the terms were for any verbal negotiations you had about your future pay rate. It should include things like:
9. Play Dumb To Get A Higher Starting Salary
In a study conducted at Columbia University, it was found that applicants who play dumb during salary discussions can negotiate higher starting salaries. Leading up to the negotiation, they made statements such as "I feel nervous talking about my salary requirements" and then played dumb when their potential bosses attempted to give them an estimate. The reasoning behind this is simple: people tend to be more generous when encountering an individual that they perceive as inexperienced.
10. Sell Yourself To Your Employer While Negotiating A Higher Starting Salary
When engaging in salary negotiations, you should focus on the value you plan on bringing to your employer and not just how much money is being exchanged. This way, it makes sense for them to invest more time and resources into training you and ensuring that you're happy there (which ultimately results in a lower employee turnover rate). Try describing to your boss what types of positive changes you could bring about once hired!
11. Avoid Saying Things That Can Hurt Your Case When Negotiating Salaries
You must use firm but respectful language when engaging in salary negotiations. You don't want to do or say anything that will scare your employer away.
12. Negotiate Salary When The Time Is Right
Negotiating salary is a serious and delicate process, which requires the right timing and approach. Before committing to an offer, you should make sure all other aspects of the job areas you want them, including but not limited to: - Company culture - Benefits - Schedule - Work environment - Perks Be sure to note down any of these points that need improvement before signing on the dotted line so that you can negotiate for concessions in these areas later on during salary discussions! If everything else about the position seems like a good fit for you, then it's the best time to negotiate for a higher salary!
13. Think About Ways You Can Improve Their Bottom Line Before Asking For A Raise
This will help give you some leverage and enable you to negotiate more favourably with your employer. Instead of asking for a straight 8 percent raise, try approaching the topic from the perspective that you're willing to invest X amount of time (and money) to reduce turnover rates to bring about Y economic benefit. Show them how they can spend less on training new employees if you can fill the position successfully!
14. Don't Put All Your Eggs In One Basket
You mustn't only negotiate compensation with just one company at a time since you never know when a better opportunity might arise! Make sure to keep multiple job prospects in the pipeline so that you have enough time to compare offers and make the best decision possible. It also shows your potential employer that you're serious about them and gives you more leverage when negotiating your salary.
15. Cut Your Losses And Walk Away
There will be times where it just isn't worth it to continue pursuing a particular line of questioning during salary negotiations. For example, if your potential employer had concretely rejected any change in pay before you even got there, then there's no real point in continuing with discussions on this topic. The same applies if they get angry or uncooperative; don't continue asking questions unless they seem like they're already on board with what you're asking for!
16. Go In With A Plan And Scripted Questions
This will give your salary negotiations a sense of order and help prevent you from getting sidetracked. Refer to the "Salary negotiation script" provided earlier in this document for some good sample questions that you can ask during salary discussions.
17. Put Your Employer Under Pressure To Hire You Right Now
You should try to put some pressure on your employer to hire you right away, since doing so can result in them being more willing to offer concessions (for example, offering you an extra week's vacation time or giving you a signing bonus) just so that they don't lose out on a good hire.
18. If Asked, Don't Give An Answer To The Question, "How Much Do You Currently Make?"
If you're asked about how much money you currently make by your potential employer, keep in mind that the question is intended to uncover information regarding your salary expectations for this position (or a comparable position). Feel free to either change the subject or respond with an unrelated answer of your choice!
19. Negotiate With The Manager Who Offered You The Position First
Most companies will only allow managers to make hiring decisions on new employees. In many cases, these same managers are also responsible for setting salaries and offering raises. Therefore, you must negotiate directly with the who extended you the offer in the first place. If they're not available to negotiate with, ask for their lead negotiator, as it's likely that they'll be willing to entertain your inquiries and make an agreement on behalf of the person who extended you the offer.
20. Don't Reveal What Your Counter-Offer Was
If you're close to accepting a new job but are still haggling over terms, don't let your potential employer know that to get the offer, you've made some demands of your own! Let them make offers and counter-offers on their own accord; THEN tell them what you want.
21. Step Away From Negotiations If The Person You Are Speaking With Gets Angry Or Unreasonable
Even if they haven't explicitly said so yet, it's a good idea to step away from salary negotiations if you feel like the person who's interviewing or negotiating with you is getting too angry or unreasonable. While this may seem somewhat counter-intuitive, the last thing you want to get into is a shouting match with someone who's already set in their ways. You can tell that they are unreasonable if they're unwilling to entertain your requests/concessions or make new ones of their own.
22. If Asked About Your Current Employer, Don't Reveal Negative Information
When asked about how much money you currently make by your potential employer, it's best not to reveal any negative information. This includes telling them what you do at work since this could open up the door for them to offer less money than you currently earn or even ask you to take a pay cut! Remember that the goal of salary negotiations is getting paid more money and getting paid what you're worth. Therefore, you shouldn't tell them anything that will prevent this from happening.
24. Don't Talk To Another Potential Employer About Salary Negotiations Until A New Offer Is Made
This tip is general advice that applies both during negotiations with one employer and multiple employers at once. If another potential employer asks you about salary, don't let them know if an offer has been made to you by someone else or reveal any other information that could hurt your chances of being hired by the company you're currently negotiating for. At best, this will prevent them from making an offer to you because they'll assume that it would be a waste of time. In the worst-case scenario, it could result in you losing out on job offers with multiple employers!
25. Don't Give An Answer Until The Final Job Offer Is Made
No matter how close you are to accepting the job offer, don't provide your potential employer with an answer until they've made their final offer. This is one of those scenarios where every penny counts! While some employers might try sending one last counter-offer after offering the position to get better terms than before (for example, a slightly higher salary or more vacation days), others might give up and hire someone else. Don't be afraid to ask for more money or other benefits if you need them, but disagree with an initial offer until the final one has been made!
Final Thoughts On Salary Negotiations
The end goal of salary negotiations is to get a fair offer that represents what you're worth and makes your employer more money than if they had hired someone else. However, this isn't always possible. For example, some employers might not be willing to pay higher than a certain amount or might have already maxed out their budget when hiring new employees. If the best you can do is get an additional $5,000, don't worry; that's still more than you were making before!
Suppose you go into a salary negotiation thinking that you're getting an offer just because of your good interviewing skills or previous experience. In that case, you are only setting yourself up for disappointment. It's not always easy, but if you follow the tips in this article and come prepared to make some demands during negotiations, it will be worth it in the end!
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