Salary negotiation is an important, and very normal aspect of the employment process. Yet everyone, myself included, finds it incredibly awkward. Whether it’s for a new job or you’ve been gunning for that promotion, it’s a well-known phenomenon. Our salaries SHOULD reflect our education, career level, skill set and the strengths we offer.
In reality, a lot of us will accept a salary that lowballs us. A survey by salary.com found that only 37% of people always negotiate their salary, and a surprising 18% don’t. What’s worse, 44% respondents have never discussed a salary raise during their performance reviews.
There are many reasons as to why you’d avoid negotiating your salary package. It could be fatigue from job hunting and feeling the pressured to accept a position with a lackluster salary, or you’re working for a company you really like, you don’t want to quit, but that raise seems nigh impossible. Each situation is individual and has its own difficulties – showing just how complex, and stressful salary negotiations can be.
Many companies, small or big, compensate their workers according to complex, and sometimes arbitrary rules. Factors such as stocks, signing bonuses, team performance bonuses, and location can complicate terms and make it difficult to compare offers. Adding to that, the rise in executive mobility has made it more difficult for employers to set salary benchmarks and standardise remuneration. This doesn’t, however, excuse them from taking advantage of candidates or employees.
Why is it important to negotiate your salary?
As a recruitment agency, we often end up mediating between candidates and employers. We spend a lot of time helping candidates negotiate their salary. Knowing how to negotiate your salary is a skill that will enable you to increase your salary and ensure fair compensation for the hard work you do. Like any other skill, if you want to be good at it you will need a lot of planning and practice. Whether you’re looking for a new job or trying to get a pay raise, learning how to negotiate is important. There are plenty reasons why:
Your current salary will affect your next one. If you don’t negotiate your salary, you are lowering your future potential earnings. Linda Babcock, the author of Women Don’t Ask: Negotiation and the Gender Divide, found that executives who negotiated their first salaries out of university made over $500,000 (£389,000) in the work lives compared to their counterparts who didn’t.
If you start negotiating salary from a young age, you will get more income both now, and in the long run. Consistently negotiating your salary can raise your salary by an average of 7.4%.
Now that we’ve covered the why, we need to focus on how you can negotiate effectively. Here are some tips to prep you for your next salary negotiation.
How do I negotiate my salary?
Do your research, calculate your value, and research the market average.
When negotiating a salary, it is very important to know exactly what value you offer your employer. Not only that, there are several factors that can affect how you’re compensated. Consider:
- geographic location
- industry experience
- educational level
- career level
- skills
- licensing and certifications.
You can use the above factors to justify your desired salary. Tools like; TotalJobs’ Salary Checker, PayScale, the Salary Project, salary.com, and GlassDoor’s Know Your Worth are great ways to find this out without doing all the mathematics yourself.
Negotiate issues simultaneously, not serially
According to the Harvard Business Review, know exactly what you want, and the importance of each ask, by the time you get to the negotiation table. You should know exactly what you want. Nothing is as vexing as someone who keeps changing their mind, or adding conditions to things after the fact. You are more likely to build goodwill, and seem well put together, if you bring all conditions up front.
You don’t want to be that person who’s always saying: “one more thing..”
Ask for More.
Many people recommend having a sliding scale for your salary instead of a single figure. That may be useful sometimes, but it can also work against you. I once negotiated using this tactic, and the employer gave me the salary at the lower end. I was disappointed but could not blame them for their approach. After all; I was the one that set the tone for the conversation.
We recommend asking for a slightly higher number than your goal. This way, if you end up negotiating down, you’ll still end up with an offer you’re happy with.
Consider the Complete Package
It’s important to know what you want, but it is also important to consider the severity of the request you’re making. Sometimes the company might not be able to afford the salary package you want. That doesn’t mean they won’t be able to give you extra perks, or even a stake in the company through equity.
I for one would not mind taking a slightly lower salary if I can work flexibly from home and get an investment into my professional development.
Different people have different needs and situations. Consider the stage of life you’re at and what benefits would make work more enjoyable for you. Do you have a lot of expenses you’ll incur because of work? Do you have children? Do you need your commuting costs covered, or a moving allowance? This is a great opportunity to consider all these, as they will affect your budget long term.
Don’t give up
As established earlier; salary negotiation isn’t fun, nor is it a natural skill for everyone. Even when you feel like negotiations have taken a turn for the worse, or the situation seems against you. Hang in there. Keep in mind that the person you’re in negotiations with is not out to get you. They are trying to find a good balance between the company’s needs and yours. A delay in an offer letter means nothing other than they’re busy. If you can’t seem to come to a resolution on a particular issue, maybe there are constraints hindering an immediate answer. Sometimes, it could even be that the request you’re asking has no precedent. Hang in there!
Don’t be afraid to walk away
It seems counterintuitive to say have patience in one breath and walk away in another. Trust me, it’s not. Patience is important, but it’s also crucial to understand your worth and know when to cut your losses. You could be the best negotiator there is, but if the company you’re negotiating with is a poor fit, you’ll still lose out. Whether it’s getting the package you want and working in a company with a culture that doesn’t suit you, or wasting your time on a deal that was never going to go through.
Let’s not forget that the most important thing about your job is whether you’re in the right company, the right industry, and working in the right role. Either way, we hope these tips will help you negotiate your salary comfortably, and get the offer you want.
By SG