A Definitive Guide to Negotiating Your Salary
Most people dislike negotiating. Whether buying a car, asking for a raise, or considering a job offer, agreeing to a ‘fair’ price for the exchange of goods or services is often considered uniquely unnerving. What if you ask for too much? What if you accept too little? How do you know if you got a good deal?
This experience can be particularly daunting when it comes to salary negotiations, as these conversations determine your earning potential over the course your career. That’s a lot of pressure if you’re not used to negotiating. So much pressure, in fact, that the majority of professionals forgo it entirely – often losing out as a result. There has to be a better way!
Guess what? There is. Anyone can become a confident, capable negotiator if they learn how to calculate and communicate their relative value to the opportunity at hand. The trick is to do your research, articulate yourself clearly, and let the other person lead. Here’s how it’s done.
Before the negotiation:
Preparing for success before you negotiate is the single most important thing you can do.
1. Know the market.
Start by gathering information on comparable jobs at similarly sized companies. Indeed’s Salary Calculator can be a useful resource – given your location, this smart tool offers data-verified salary brackets searchable by company.
Throughout your search, try to ensure that you are comparing apples to apples. For example, the base salary of a “Senior” at “Company A” may be much different than the base salary of a “Senior” at “Company B.”
Different companies will likely have very different ways of structuring a compensation package: in addition to salary, you have to consider how benefits, short and long-term incentives (bonus, equity, and other long term incentive plans), vacation plans, work environments, opportunities for growth and various other factors can play into a final compensation package.
If you’re seeking the most reliable and immediate market insights, consider getting in touch with a recruiter – recruiters often have insider information on what companies are willing to pay and where you should rationally set your expectations.
2. Know your skills.
Take an objective, 360 degree look at your professional accomplishments, your relevant education and technical skills, and your communication skills. Be honest: you may excel in certain parts of your work while lacking in others.
For example, as an accountant, consider which skills have contributed most to your success – have your strong computational abilities increased sales and productivity at your company? As a software engineer, has your minimal knowledge of Python been holding you back? A realistic and honest view will help you make a more accurate determination of your relative value to a given company.
3. Know your target company.
What do they value? What keywords or general sentiments will make you stand out? Search Glassdoor to get a more nuanced idea of what the company is looking for, then emphasize these elements in negotiations. Recruiters can again offer a wealth of knowledge on this subject; we build long-lasting professional relationships with employers, and it’s likely that we’ll be able to offer pointed insights into your company’s priorities.
4. Know what you’re after.
Why are you in the market for a new position? If you’re seeking opportunities for long-term growth, maybe prepare to compromise somewhat on salary. If your sole aim is a pay boost, then by all means – be clear and upfront in your negotiations.
However, keep in mind that few companies want to hire based solely on salary expectation. Managers first and foremost want to hire a driven and dedicated candidate, whose priorities lie in the continued success of their team. Clueing into your interests and ambitions will help you to focus in on what’s most important to you.
During the negotiation:
This is a learning opportunity: always approach with an open mind, an optimistic attitude, and a willingness to listen and engage. Your initial goals should be to better understand the company and to build a stronger relationship with them over the course of your discussions.
There’s a lot more on the line than your pay – and there’s a lot more that goes into package negotiations than salary. Always keep the big picture in mind, from the diverse elements of your offer package, to the kind of culture being promised, to the long-term opportunities for professional growth.
Monitoring your non-verbal cues:
The most common fear when negotiating? Coming on too strong. An aggressive, uncompromising demeanor risks insulting your interviewer or, worse yet, jeopardizing an offer. Adopting a positive and open outlook is the best way to protect yourself against this worst case scenario.
Be warm, approachable, and enthusiastic, and in so doing show your employer that you are excited about the position and ready to come to a compromise. You want to project flexibility.
First rule of engagement: do not bring up compensation. Sit back and listen. Allow your employer to make the first move.
Use this template in your next interview:
Q: They ask about salary expectations
A: “Could you first offer additional information on how you structure your compensation packages? Before I can give an informed answer, I’ll need to learn more about the composition and components of the package.”
Note: At this point you’re not avoiding the question, you’re simply taking the opportunity to learn about the company and their expectations. If this question is posed before you have even interviewed, add language to include:
“Could you first offer additional information about the job, the typical day, the team, the mid and long-term opportunities for growth, and the overall structure of your compensation packages? I’d like to think about these factors and then provide a more informed answer. I have no issue with work hours or any combination of the factors above, but each may alter my expectations a bit. Thanks.”
Q #2: They ask about your salary expectations a second time
A #2: “Just so I know, what is the budgeted “hire in” range of the position? If possible, I’d love to get a sense of how your HR group and hiring manager are valuing the role. I am somewhat flexible, and want to get a sense of your range.” (Then be quiet. A little awkward silence can be good, but be sure to be smiling and polite – people can hear “happy” and “nice” tones, even over the phone)
Note: If your desired salary is not at all commensurate with their proposed range (anywhere from 10%-25% off), you might at this point politely inform them that while you are genuinely interested, you are considering offers significantly above that bracket. You can let them know that you are flexible to a degree if other factors fit, and also ask how flexible their range is or if they have other roles that may be more appropriate for what you have to offer.
Q #3: They ask about salary expectations a third time
A #3: “Given my experience and the current market rates for this role, I’m looking to accept offers in the range of x to y (be reasonably clear if you are referencing “base” salaries or “packages that might include realistic bonus pay-outs). I know you’ll be fair and competitive in your offer, and I look forward to working together!”
Note: Choose your words carefully: it’s crucial that you don’t come off as too assertive, pushy, or even hostile. Reiterate your interest, your flexibility, and your willingness to engage in discussions. Always be professional as this is one of the company’s first opportunities to assess you.
If, having reviewed the above template, you still feel unsure about your negotiating skills, I’d strongly recommend consulting a recruiter. There is a whole vocabulary of professional jargon that comes into play when negotiating, of which most people are unaware. We often know the right words to say and the right time to say them.
A good recruiter can help you shape your pitch, clue into timing cues, and advise you on when to back off. And depending on the situation, a recruiter can even negotiate in your stead.
Alternate negotiation situations:
Sometimes these conversations don’t happen in person – more often than not, you’ll be receiving an offer over the phone or email. In this case, you shouldn’t feel pressured to counteroffer immediately. Simply express your gratitude and your excitement to be working together, and ask for a few days to consider and discuss with your family.
There is no reason to rush this process. Set clear expectations for when you’ll need to get back to them and go from there.
**Of note: if you are satisfied with an original offer, you do not need to negotiate; there is no rule stating that you must counteroffer. Don’t worry – you won’t be judged for accepting an offer as is. Happy is happy, and if you’ve found a company that meets – or surpasses – your expectations, sign on and don’t look back!
Following the negotiation:
Thank everyone for their time, ensuring that you are still maintaining a positive, enthusiastic attitude. Hopefully at this point you have come to an agreement, and can fully relax knowing that you are being fairly compensated.
Didn’t get the offer you were hoping for? It’s important to remember that a job is about more than salary. If you genuinely believe this is the right opportunity for you – that you’ll work with a great team, learn from experts in your field, and advance your career – then prepare to compromise, if need be.
Jobs aren’t static; salaries change, benefits evolve – in a year, you may thank yourself for taking a chance on this opportunity, even if it wasn’t what you had originally wanted.
Determining your market value, identifying your worth to a specific company, researching competitive benefits packages – it’s a difficult and deeply involved process. Adopting an open and flexible mindset can help you make it through without the stress, while also ensuring a stronger, more trusting relationship with your future employer.
Don’t worry about the little things and treat every moment as a valued opportunity to learn and grow. You’ll end up with a better offer and a healthier outlook going into your new job. Get in touch for more information.
Have a question for Ron? Ask him in the comments below!