By Anne Evenson
Whether it be for a new employment offer or for a raise at your current job, negotiating a salary can be daunting. With these tactics, you can navigate the salary negotiation process confidently and strategically.
“The most difficult thing in any negotiation, almost, is making sure that you strip it of the emotion and deal with the facts.””
Howard Baker, Former American politician and diplomat
If the thought of asking for a wage increase or discussing your salary during an offer of employment makes you feel uneasy, you’re not alone. According to a recent study by Fidelity Investments, only 42% of young professionals negotiated their salary during their last job offer. Failing to secure regular pay raises or properly negotiate the compensation and benefits package that comes with a new employment opportunity can profoundly affect your earning potential over the course of your career. The good news is that most employers expect employees to ask for raises and potential new hires to make the best bargain. Whether negotiating a new employment offer or asking for a raise at your current workplace, discover tactics to help you realize your full earning potential.
Analyze the Market Average
Before you begin any negotiation process, you’ll want to research your industry’s most updated labor market trends and use this data to determine a baseline for your salary request. The U.S. Bureau of Labor Statistics (BLS) has twelve programs that offer updated data on pay and benefits for different occupations, industries, geographic areas and demographic characteristics of workers. In addition, using the BLS Occupational Outlook Handbook, you can browse occupational groups by highest-paying, fastest-growing, most new jobs and degree fields. Lastly, while it can be challenging to learn your coworker’s salaries or find wage data from the private sector, other resources are available, including SalaryExpert.com, Salary.com, Glassdoor.com, PayScale.com and MoneyGeek’s Cost of Living Calculator.
Geographic location is also a key factor influencing market pay rates for specific occupations, especially in large metropolitan areas like Austin. Remember to include other job-related expenses you may incur related to relocation and commutes, like moving costs, cross-country car transport, gas, vehicle wear and tear, and public transportation fares.
Determine Your Value
After establishing your salary requirements, you must assess how much value you can offer your existing or future employer. For example, your education level will likely affect your compensation in specific roles or industries, especially if you hold a bachelor’s, master’s, Ph.D. or another specialized degree. Your years of industry experience may warrant a higher salary if you meet or exceed the requirements in the job description. An employer may prefer or require special licenses, certifications, or specific skills; if you have them, you may be justified in asking for higher pay. If your leadership skills meet or exceed employer expectations, that may be a valid reason to request greater compensation.
Build Your Business Case
Now it’s time to formulate some talking points based on why you feel you deserve a raise or a higher salary than the one on offer. It’s critical to be ready with specific, compelling rationale that focuses on your contributions, like awards earned for goals you exceeded or achieved or results that drove revenue. Of course, be ready with the average salaries of comparable positions with other industry employers. However you choose to illustrate your value to your current or future employer, use clear, logical reasoning to support your position while remaining emotionally balanced. Try not to sound arrogant or peevish; just present the facts. For inspiration on what some of these conversations should sound like, check out these scripts and turns of phrase.
When to Negotiate Your Salary
In most cases, it’s better to negotiate your salary after receiving a job offer instead of during the preliminary phase of the interview process. Your leverage is at its peak after you’ve demonstrated that you’re the prime candidate for the position and thoroughly understand the employer’s expectations. Negotiating too soon may hurt your prospect of securing a job offer.
If the employer makes you an offer over the phone, requesting additional time to consider the offer is perfectly appropriate. First, express your excitement about the opportunity and appreciation for their offer, then ask for permission to review it and respond within a specific timeframe—preferably 48 hours or less. If you choose to negotiate, opt to do it by phone or email to reduce any chance of miscommunication.
You’ll also want to prepare for salary queries from potential employers when it’s too early in the hiring process, like during the first interview. For example, you can stall by saying, “I want to know more about what the position involves before discussing salary.” If this approach doesn’t deter the interviewer, try blurring the line by offering a range, such as $75,000 to $85,000, rather than a specific number. Just remember the golden rule of salary negotiation: always give the employer a slightly higher number than your goal amount, whether one number or a range. That way, if they negotiate down or choose the lower end of your range, you’re guaranteed a salary offer you feel is fair.
Timing is also critical when contemplating asking for a pay raise in your current role, so consider a few things before approaching your supervisor. First, research the overall economy and whether your industry is struggling or prospering. Determine your employer’s current economic health by understanding how your company’s profits are performing and whether they are on a hiring spree or going through a round of layoffs. Ideally, you’ll discuss your raise with your supervisor before they set the budget.
Prepare for a Counteroffer
If you’re negotiating for a raise with your existing supervisor, handling a counteroffer is pretty straightforward. If the counteroffer is fair, you may accept gracefully. On the other hand, if it’s more than what you’re currently earning but less than what you requested, you might restate your case or counter with another amount.
Hiring managers are skilled negotiators, so prepare for some tough questions that they may use to uncover your motivations. You might hear, “Are we your first choice?” “If we raise the salary, will you accept the position immediately?” or “Do you have any counteroffers?” Don’t get flustered, and be honest. If the individual you’re negotiating with seems perplexed, behaves negatively or rejects your counteroffer, try to remain calm and collected. Respond tactfully with open-ended questions to reveal more information and keep the discussion going. For example, “What is this position’s salary based on?” or “What other information do you need to make a decision?”
Only counter an offer once or twice maximum and never revisit a compensation package on which you’ve previously agreed. This shows your new employer that you respect their time and have boundaries related to what you will and won’t accept.
If the current economic climate makes it challenging for your organization to offer you the raise you deserve or the prospective company you’re negotiating with to meet your salary request, be ready with some alternative options. For example, combining a reduced pay raise with educational benefits or a more flexible work schedule to improve efficiency makes a strong case for how funds spent on you will ultimately improve the company’s profit margins.
Perhaps a prospective employer may be open to negotiating other perks or forms of compensation like stock options, a sign-on bonus, moving expenses, a better job title, more vacation time or remote work. Consider things like the stress level of the new position and the proximity to your home when determining if the final offer is acceptable. Don’t be afraid to walk away if it’s not.
Salary and benefits negotiations are standard business practices and can put your earning potential on the right path when conducted correctly. Ninety percent of the young professionals cited in the Fidelity Investments study who did negotiate their salaries achieved their desired expectations. So don’t wait; get out there, make your case, and reap the rewards!
Anne Evenson is a marketing specialist and copy editor working in Austin, Texas. She holds a BFA in Fibers and Printmaking from the Kansas City Art Institute.
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