Many people fear negotiating salary—it can be very intimidating. However, negotiating for the salary you are worth can make a huge difference over the course of your career. Stanford negotiation professor Margaret A. Neale explained,
“If you and your counterpart who negotiated are treated identically by the company—you are given the same raises and promotions—35 years later, you will have to work eight more years to be as wealthy as your counterpart at retirement.”
Every situation is unique, but there are some general key tips that will help you in your negotiating efforts. Here are some dos and don’ts you need to know before your next negotiation.
(Note to entry-level hires:
In most cases, you need to get some experience under your belt before you have power to negotiate. Peter Vogt, Monster Senior Contributing Writer explained,
“Sure, you might have some bargaining leverage these days if you’ve majored in a hot field like accounting or engineering, or if you’ve developed some rare skill that is very much in demand among prospective employers. But in more cases than you probably care to acknowledge, starting salaries are basically set, and you just don’t have enough to offer at this stage in your career to make employers budge.”)
When interviewing for a job, don’t bring up salary until you get the job offer and you know the company wants you. Asking about compensation too early in the process makes you look like you care more about the money than the job. Once you’ve received the offer, you are free to ask and negotiate specifics about salary, bonuses, commissions, health insurance, etc.
If you are already employed and want to negotiate an adjustment in salary, talk to your boss 3-4 months before your performance review—that is when the budget is worked out. If you wait until your review, you will likely be too late. Learn more about how to ask for a raise or promotion here.
Before you attempt to negotiate, make sure you know your market value. Thoroughly research salaries of comparable jobs in the area, and look up the historical salary levels and negotiation policies of the company you are considering. Search online using websites like Payscale, Glassdoor, or Salary, or ask other professionals in your field. Once you know the going rate for your position in your specific industry and geographic area, you are ready to negotiate focusing on your market value. Don’t make the mistake of negotiating based what “what you deserve” or “what you need.” Employers don’t care about what you deserve or what your living expenses are, but rather what your value is to their organization. You are more likely to be successful in your negotiation if you think through your request and show how you can benefit a company and it’s goals.
Organize your thoughts and research before you negotiate. Try out free resources like She Negotiates, How to Source and Research What You’re Truly Worth, and Negotiation Prep Worksheet. Once you have planned what you’re going to say, practice! Think of different scenarios and rehearse what you would say in each one. Practice in front of a mirror to adjust body language if needed.
Once you are extended an offer, don’t immediately say yes or no, even if you’re pretty sure of your answer. Most companies give a few days to a week for you to look over the offer and decide, so use some of that time! Think things through with a clear head. You have the most power once you get the offer, so if this is the job you want, look through the details and consider negotiating if you think it should be better. Even if the salary is low and you don’t think you’ll take the job, use the given time to look through the entire compensation package. There might be bonuses, stock options, or fully paid health insurance in the deal, making it a stronger offer than you thought initially. Perhaps you could negotiate part of the offer to make it better. Either way, take a little time to decide.
Avoid telling the employer the lowest salary you would accept. Once this information is offered, you will have little room to negotiate. Sometimes employers will ask what salary you are looking for in a preliminary interview, but proceed with caution when answering this question. It’s best to wait until negotiation time (after the offer is extended) to bring up any numbers, or you might accidentally commit yourself to a number lower than desirable.
Even if you have a range of salaries that you would be ok with, never tell an employer you would accept “between $70K and $75K.” When you give a range, the employer will automatically jump to the smaller number. Instead, ask for an amount toward the top of the range you have in mind. Your employer will almost always negotiate down, so you need to plan for that and start high. Ramit Sethi recently told PureWow,
“If you walk into a salary negotiation without a number, you’re at the mercy of an experienced hiring manager who will simply control the conversation.”
The number you give should be very specific so it shows you have done your research as to what your market value is. Starting with a number like $74,750 is more likely to get you a higher final offer than if you initially request $75,000 because it implies that you’ve really researched to find exactly what you are worth.
If this is the position and company you want but you feel that the offer is low, try negotiating for a little more. However, you can’t negotiate every part of the offer. Don’t ask for a higher salary, better benefits, more vacations days, and a front row parking spot—pick what is most important to you!
Wharton professor Adam Grant on Business Insider recommended negotiating by prioritizing your requests:
“In a job offer negotiation, for example, you might say that salary is most important to you, followed by location, and then vacation time and signing bonus. Research shows that rank-ordering is a powerful way to help your counterparts understand your interests without giving away too much information. You can then ask them to share their priorities, and look for opportunities for mutually beneficial tradeoffs: both sides win on the issues that are most important to them.”
Randall S. Hansen of QuintCareers.com says the biggest mistake you can make is:
“…simply deciding to settle and accept whatever offer you receive. Research shows that younger job-seekers and female job-seekers often make this mistake — either from not completely understanding the negotiation process or from a dislike or discomfort with the idea of negotiating. Settling for a lower salary than you are worth has some major negative financial consequences — you’ll earn less, receive smaller raises (because most raises are based as a percentage of your salary), and have a smaller pension (since pension contributions are usually a percentage of your salary). But settling for an offer that you feel in your heart is too low will not only set you back financially, but also eat at you until you finally begin to seriously dislike your job and/or employer.”
Fight your fear and negotiate for the salary you are worth.