How to Negotiate Salary Like a Pro
Most people do not want to work. You want to travel. You want to binge watch TV. You want to go for long walks with your puppy. You want to sleep until noon and then take a nap at 12:01. You want to do anything you want.
But unless you have a money tree, you have to have a job to pay for your home, your car, your vacations, your puppy, and the bed you nap in. The more money you have, the better it is. While money doesn’t buy happiness, it does buy other important things, like coffee, food, and Handerpants, and that means that you need to try to not only find a job – you need to try to make the most money you can. You do that through salary negotiation.
An Introduction to Salary Negotiation
Salary negotiations are often one of the most stressful parts of the job interview. The good news is that, if you’ve reached the salary negotiation stage, chances are you have been offered the job. The bad news is that if you negotiate a lower salary than you deserve, it is going to take longer to earn what you should be paid. Raises and promotions take time.
Those that have never negotiated salary before often worry that if they say a number too high, they may upset the hiring manager and get rejected from the job. It is technically possible to say a number too high, or to create a bad first impression with the hiring manager because of your greed.
But here is what most job applicants do not realize:
It is the COMPANY’S best interests to pay you as much as possible.
Yes, every company wants to say money. If you say you’d be happy with $40,000, and the company was going to offer you $100,000, the company is going to be very happy to save the additional $60,000.
But the company also wants you to stay as long as possible and be happy and productive at your job. If you negotiate a salary that makes you happy and the company thinks it is worth your talents, you’re happy because you make more money, but the company is happy because you’re happy. They know that means you’re going to value your job and work hard to keep your job.
If you ask for a fair salary, pricing yourself out of a job is very rare. But getting less than you deserve – or being paid less than would make you happy – that is all too common. That is why you negotiate salary, and that is why it is in your best interests to try to earn as much as you can.
Who Needs to Negotiate Salary?
Almost all jobs require salary negotiation. Some jobs, particularly entry level jobs and state jobs, may have a set salary or hourly pay. But usually if it is a set salary, the organization will let you know in advance. For most other jobs, the salary is negotiable.
Everyone should negotiate salary in some form. If the company is unwilling or unable to pay more for your talents, then they will tell you, and you can decide later if you are willing to accept work for less than you planned to be making. But until you have been told that you will not be paid any more money, you should expect that salary negotiation will be part of the process.
Tips to Negotiate Salary Successfully
The salary you should ask for varies between jobs, cities, and more. An accountant in Seattle working for a Fortune 500 company is likely to be paid more than the same accountant working in Wyoming for a small startup. These factors all go into what you can ask for and what you should be paid.
However, the following are some of the tips and strategies that you can use to negotiate your salary, and try to earn as much as you can.
Let the Employer Make the First Offer
Salary negotiation is easier if the employer makes the first offer. If the company asks you what you’d like to make, and you say you’d like $60,000, and the company says “we’ll offer you $60,000,” you should not ask for more. Doing so would make it seem like you want to earn more than even you think you are worth, and that’s not fair to the company.
If you are asked what salary you’d like to make, you should give a response that indicates they should make the first offer. A good response is “I believe I bring a lot of talent and energy that will help the business thrive. My goal is to earn a salary that is commensurate with that value. As we learn more about each other, we can work on determining a fair salary in the future.”
These types of responses are beneficial in several ways. First, it implies that you’re still deciding if you want to work there, and that your salary reflects your thoughtful considerations of what you think about the company. Second, it pushes back the salary on the company, and pushes them to make an offer instead.
Some companies refuse to make an offer and force the employee to ask for the salary they wish to receive. If this happens, ask for about 5 to 10% more than you genuinely want. This is also referred to as anchoring. That way it gives the company room to negotiate you lower, but also you make an amount to make you happy.
However, it is still best to wait until the company gives you a number to use as a starting point. Try to avoid giving your preferred salary unless you have no other option.
Come Prepared and Create Your Range
The most important part of salary negotiation is your preparation. You need to do your research, and you need to have a good idea of the answer to the following questions:
- How much does the position pay normally in your local area?
- How much does the company usually pay its employees?
- What are the benefits of working for that company both personally and professionally?
The answers to these questions are crucial to determining the salary you can ask for.
Let’s start with the expected pay. It is very important to know what other people doing the same tasks with similar experience are being paid for their work at other companies. Use websites like www.Glassdoor.com and www.PayScale.com to research expected salaries. Comb websites like Monster and Craigslist to see what local companies are offering.
Do your research. Determine what you can expect to be paid fairly. Salary negotiation is about being paid what you’re worth, and the only way to know what you are worth is to know what other companies are paying for your talents.
Now, there are a few notes here:
- Try to Find Company Pay First – Some companies have their salary rates published on websites like Glassdoor, so that you can see what they have offered other employees in the past. You do not have to stick to this number, but you should also expect not to exceed it by too much. Many companies are hesitant to offer more than 10% more than their max salary to a new employee, because they are worried that other employees will find out and ask for raises.
- Look Local – Always search locally. Companies in San Francisco are always expected to pay more than companies in Nashville, because the cost of living in San Francisco is much higher. Know what they are paying in your local area, because national numbers may not be relevant.
- Pay Attention to the Type of Business – The profitability and the type of business (startup, small business, family owned, multi-national corporation, etc.) are each going to have different salaries they can offer. Now, it is not your responsibility to save the company money. You should ask for what you are worth, regardless of the company or the economy. But knowing what type of business it is can help you come prepared for the negotiation process.
- Know Your Best Self – Be fair to both yourself and the company. You deserve to be paid as much as possible, but your best chance of getting that pay is to also know what you are fairly worth. Are your talents, background, skills, and experience worth the higher end of the payment range? Are they closer to the lower end? You do not have to try to save the company money – if you are closer to the lower end of the talent range, you can still ask for more than the lowest number. But know what number you deserve, and don’t ask for much more than that number.
Also, pay attention to benefits and perks. Companies that offer flexible hours, work from home options, ample vacation time, etc., may pay a bit less but offer more benefits with them. Keep that in mind when determining your range.
Never Accept the First Offer
If you’ve managed to receive an offer from the company, do not take the offer right away, even if it is above what you wanted to make. Almost every company plans for the salary negotiation process. They expect that you’re going to ask for more, and that the number they quoted you is a starting point, and so in a way, their offer is not their real offer for you.
If the number is more than you expected, and you are concerned about the offer being taken away, you can consider asking for a smaller percentage more – such as 5%. But remember, it is not your job to save the company money. If they have made you an offer that is more than you expected, you’re still well within your right to request more. They do not have to give it to you, but you can request it.
Ask for 10% More at Most On Average
Now comes the question about how much more to ask. There are those that tell you to ask for as much as 20% more to start the negotiating process. There are others that tell you to avoid risk and ask for only 5% more or less.
The answer is a bit more complicated, and has to do with how much they offered, the type of industry, and your confidence level. Those that ask for 20% more often work in highly competitive businesses. They have the confidence to ask for it in a way that convinces the company that they are worth it. They may also have been offered less than they wanted, and they are confident enough in their job prospects that they are looking for a company to pay what they’re worth.
For others, they’re afraid to ask for more, they are desperate for employment, they work in a less “corporate” environment, and they were already offered more than they expected. Can you still ask for 20% more? Absolutely. But that also may not be you.
With that in mind, the most common starting point for salary negotiation is about 10% above the salary that was offered. The exception to this is if you were given an offer well below what you planned to make. Then it is in your best interests to ask for the number you had hoped to make with the position.
You Can Also Ask for Benefits – With Caution
Salary negotiation is not limited to salary either. You can also ask for more vacation days, job perks, and more. Everything is on the table during salary negotiation.
But be warned:
- Don’t Look Lazy – Asking for a lot of days off, asking to be given a lighter workload, and more, can all give the impression you’re trying hard not to work before you have even started. It is perfectly acceptable to ask for more vacation days, or various other perks. But make sure that you don’t overwhelm the hiring manager.
- Understand that Benefits=Salary – If you are asking for more benefits, you may not want to expect a much higher salary. Benefits, for most companies are a form of salary that is not money. So the more benefits you ask for, the less salary you should expect.
Still, don’t forget that in the negotiation stage, especially in competitive industries, the benefits are a part of the process. Don’t limit yourself to salary when you think about what to request. You can even request a title change, which could be better for your professional growth.
How to Ask for a Higher Salary
With these tips in mind, how do you negotiate salary anyway? Should you blurt out the number you want and hope for the best? Should you send in a request in writing?
Negotiating salary can be awkward. But the more you’re prepared to negotiate salary before the job interview, the more likely you are going to receive a salary that you are satisfied with.
When it comes to negotiating salary, consider the following strategies:
- Ask for Benefits First – In order to successfully negotiate salary, you have to take every consideration into account. If you haven’t been told the benefits yet, now is a good time to ask. Finding out the benefits first will ensure you’re making a fair offer, and it will show the hiring manager that you’re taking everything into consideration – a quality they are looking for in an employee.
- Be Positive – Salary negotiation should not be stressful for you or the hiring manager. Remain upbeat and positive with your responses. Show that your requests are coming from a place of excitement, not from a place of distaste for the quote you were given.
- Start with Your Research to Lead to Your Request – Finally, start your negotiation by proving you did your research. Give an explanation for where you got your numbers from, and why you believe you deserve more.
Some companies give their offer in writing and request responses through email. Others call. Still others make their requests in person during the interview. You may have to think on your feet a little bit about how to respond to the offer depending on how the offer is made.
However, the following is an example of how you can lead the conversation and ask for a higher salary:
Hiring Manager: “We would love to welcome you on board. We are able to offer a salary of $50,000 to start, and you can begin next Monday.”
You: “That’s great, I’m excited to work for you. About the offer, most Marketing Assistants make between $60,000 and $80,000 in this city according to PayScale.com, and I have over 5 years of experience working with programs that many others lack. Since you offer 4 weeks of vacation and excellent dental plans, I recognize the range doesn’t account for those benefits. However, I would like to request a salary of $65,000, as this would be competitive to what others in the field make.”
Hiring Manager: “I would love to be able to offer you $65,000, but because we are a small startup and the previous employee had a salary of only $45,000, I am not authorized to give that high an amount. I can, however, offer you $60,000. I recognize that is less than what other companies pay, but we offer excellent benefits, a great work environment, work from home options, and ample opportunities to grow with the company.
You: “I know how amazing it will be to work here and I am excited for the opportunity. I also recognize that offering $15,000 more than you paid your previous employee can be a lot to budget. I’m happy to accept $60,000, but I would like to request a 5% increase in salary after the first year, rather than the 3% offered annually. This way I will be able to catch up to my peers, but only after I’ve passed probationary period and you’ve had an opportunity to see my work.”
Hiring Manager: “Would you be able to accept 4% after the first year?”
As you can see with this example, you’ve asked for almost a 30% increase in salary – well above what is often recommended – but you did so because you had numbers on your side. You had proof that others are paid more in the industry, forcing the company to justify paying you less. Then you were able to negotiate more.
Here is another example. With this example, the average salary is $30,000, so the offer is generous by those standards.
Hiring Manager: “We are prepared to offer you a salary of $40,000 to start. This comes with full medical, dental, and vision.”
You: “Thank you for the offer. Some of the positions I applied for had a salary of $45,000 to start. I recognize that you are offering slightly more than average, but I was hoping to receive a $45,000 salary, given my education and background. Does that work for you and your team?”
Hiring Manager: “Since it is an entry level job, we cannot currently offer $45,000, but we can offer you $42,000.”
You: “Understood. I accept the offer, and I look forward to growing within your company. When do I start?”
$45,000 is slightly more than 10% above what the hiring manager quoted, and in the end you settled for $2,000 – 5% more than the salary you were offered. These types of conversations are common in the business world, and a great way to make sure you’re making closer to what you deserve.
You Deserve to Make the Most You Can
Salary negotiation is rarely a fun part of the process. But it is an important one. Every $1,000 more you receive is going to make an impact on your budget and your satisfaction in the job, and the applicants that are willing to negotiate salary are the ones that are going to consistently make more than their peers over the course of their work life.
So do your research, come prepared, and be ready to ask for a higher salary than what you are offered. You’re the talent that they want. They should be willing to pay you what you deserve.
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