Know Your Worth: How to Negotiate — or Renegotiate — Your Salary
Salary negotiations can be the most awkward part of the job-seeking process. You don’t want to overestimate the value of the skills and experience you bring to the organization, but you don’t want to aim too low lest you leave money on the table.
Situations like this are exactly why job seekers should refine their negotiation skills. Not only is this skill set helpful in salary negotiations, it also can be applied to other situations ranging from buying a car to deciding which restaurant you and your partner will call for takeout. Whether you’re just starting your career or are a midlevel employee planning to ask for a raise, negotiation skills are a must. Below are a few ways you can fine-tune your capabilities.
Why Negotiating a Higher Starting Salary Is Important
As you enter the final stages of the interview process, negotiating the highest starting salary possible is crucial. Why? Because future raises are often calculated as a percentage of your day one compensation package. Other notable points include the following:
- Up to 70% of managers expect applicants to try to negotiate a better compensation package. Forbes reports that although most hiring managers don’t say an offer is flexible, most are open to negotiation. The news outlet further reports that counteroffering tends to increase an applicant’s starting wage by an average of 7.4%.
- Salary negotiations aren’t happening as frequently as you might think. The Society for Human Resource Management (SHRM) reports that most job seekers don’t try to negotiate better salaries. For example, a 2018 study conducted by Robert Half found that only 39% of survey participants tried to negotiate a better compensation package for their most recent job offer.
- The gender pay gap still exists. Business Insider reports that in 2018, the average full-time female worker made just 81.6 cents on the dollar compared to her male counterparts. In addition, the gender pay gap varies widely depending on an applicant’s race and age, and where the job is located.
Do Your Homework
One of the most important things an applicant (or employee) can do when negotiating their salary is to research the pay rate for similar positions in their area. For example, individuals who want to work as a scientist in San Francisco should take time to discover what the average starting (and midlevel) salary is for that job in that city, on sites such as the U.S. Bureau of Labor Statistics, PayScale, and Glassdoor. Understanding location-specific salary data is key, as salaries often fluctuate widely based on where the position is located.
A second crucial piece of prep work involves practicing sound bites — similar to elevator pitches — that highlight the skills, capabilities, and experience you bring to an organization. Taking time to make a mental or written list of bullet points can give you the confidence to ask for more money. For example, if you have 10 years of industry experience and a track record of leading your team to success, stating this can help make a tangible argument for your request.
Don’t Give Your Number First
When applying for jobs, don’t give your salary expectation up too quickly. If an interviewer asks what you’re seeking in terms of annual compensation, consider the following:
What to Say
Instead of providing the recruiter with a firm number, say you’re “open to a fair and equitable compensation package that’s aligned with industry averages.”
What Not to Say
Don’t say, “I’d be happy with $X per year.” If they’re prepared to offer $50,000 and you say your expectation is $42,000, if you’re offered a position, you may only receive an offer that’s at (or slightly above) what you asked for.
Be Proactive in Starting a Salary Conversation
It’s not unusual for employers to lowball a salary offer to create a starting point for negotiations. For example, if an employer offers an annual salary of $40,000, but the applicant knows the average starting salary for that position is $50,000, the applicant can use this information to begin negotiations at or near the higher level. Consider the following suggestions:
What to Say
When you present a counteroffer, include relevant points, such as salary data from PayScale or Glassdoor. This can begin with a statement such as, “According to my research, the industry average for this position in this area is $50,000, which I feel is better aligned with the background, experience, and value I’ll bring to your team.”
What Not to Say
Don’t present your counteroffer as a personal need; for example, stay away from phrasing such as, “I need the extra $10,000 per year because I need to pay off credit card debt.”
Be Prepared to Come Back with a Second Counteroffer
Some hiring managers may still try to play hardball. If the person you’re speaking with says the salary in the offer letter is all they have budgeted, consider the following:
What to Say
In this instance, consider leading with, “I’d like to learn if my salary expectation is possible based on my skills and experience.” In some cases, if they’re unable to go higher on salary, they may counter with stock options or additional paid time off. On the other hand, if they say that it’s their final offer, you know you tried.
What Not to Say
Don’t immediately back down and say, “I accept your offer.” This should be avoided until you know that further negotiations are off the table.
When to Renegotiate Your Salary
If you’ve been with a company for a while and you feel as if you’re stuck in a salary rut, it may be time to renegotiate. But before you ask to sit down with your manager, take some time to prepare an argument as to why you’re worthy of a raise. Examples include the following:
You Haven’t Received a Raise or Wage Adjustment in Years
Companies aren’t required to provide employees with a cost of living increase, but that’s not to say that the dollar goes as far today as it did 10 years ago. When you sit down with your manager to ask for a raise, be sure to highlight your skills and experience, and what you bring to the team. In addition, research the average compensation ranges for similar positions in your area. Last, note the average cost of living increase since your last raise, and explain that you’re seeking a wage adjustment commensurate with your experience, industry averages, and inflation.
Your Skill Set or Job Responsibilities Have Grown Significantly
Has your job changed significantly since you were hired? If so, this may be a good time to ask for a raise. For example, have you received additional industry certifications or completed an advanced education, such as a master’s or doctoral degree? Advanced knowledge about your industry can often be used to leverage a pay adjustment. Tips for renegotiating include the following:
- Prepare a list of accolades and accomplishments that reflect on your major successes. Be sure to include positive feedback you’ve received from peers and management.
- Be prepared to discuss your specific salary requirements. Don’t simply state that you’re seeking a raise; be prepared to discuss your salary expectations along with why you’re worth a higher pay rate.
- Consider alternatives. If your employer is unable to match your exact request, they may be able to negotiate additional time off or stock options.
Negotiation Skills Can Be Used Throughout Your Lifetime
Negotiation isn’t just useful when applying for a job or updating your compensation package during an annual review, it’s a skill set that can be applied in various situations throughout your life. For more information on how to fine-tune your existing capabilities, check out Maryville professor of communication Dr. Dustin York’s video “How to Negotiate — 3 Tactics to Use Immediately.” If you’re interested in learning more about how the right education can help you earn a higher salary, learn more about Maryville University’s online degree programs.
Recommended Reading
5 Questions to Ask Before Enrolling in an Online Program
Moving Forward in Your Career Takes Focus, Determination, and Education
Sources
The Balance Careers, “Salary Negotiation Tips (How to Get a Better Offer)
Forbes, “6 Steps for Negotiating Your Salary”
Indeed, “10 Tips to Negotiate Your Salary (with Examples)”
Robert Half, “How to Negotiate Salary After You Get a Job Offer”
US News & World Report, “The Exact Words to Use When Negotiating Salary in a Job Offer”