“The best move you can make in negotiation is to think of an incentive the other person hasn’t even thought of – and then meet it.”
Nora received a job offer for the position of her dreams. She was ecstatic. She wasn’t even focused on the salary. Fortunately, she shared the news with one of her mentors, who had also been her very first boss. “Don’t accept without a negotiation,” her mentor advised her. He shared these statistics about salary from a recent Glassdoor survey:
- Three of five employees do not negotiate their salary.
- Women are less likely than men to negotiate—68% of women vs. 52% of men abstain from negotiating. This is a shame, because salary is almost always negotiable.
- When men negotiate their salary, they’re over three times more likely than women to succeed. This may stem in part from confidence—men tend to have an easier time asking for what they want—though that’s not to dismiss the impact of sexism. However, it’s getting better: The gender gap is much lower for younger workers than for older ones.
- Older workers as a whole are also less likely to negotiate salary. As younger employees set the pace for negotiations, the older generations would be well advised to keep up—with their experience, they’re likely settling for less than they could have.
Here are 4 steps to succeeding in your next salary negotiation so you can Get Paid What You’re Worth.
- Build Up Your Confidence
Having confidence is crucial to salary negotiation. Knowing the interviewer expects you to negotiate should give you a confidence boost. Remember that the raises you get down the road will depend on your starting salary.Mentally prepare your spiel about your track record of success. Get ready to cite the specific results of projects you handled in your current or previous role. If you’re asking for a raise from your current boss, prepare to discuss your successes as thoroughly as you would for an interview. Rehearse with a friend to make your answers as eloquent as possible.
- Do Your Research
Whether accepting a new position or asking your current boss for a raise, find out the typical salary range for your position in your geographical area. Remember, this could have changed in recent years. When you’re knowledgeable about salary ranges, you’ll feel much more confident making an offer. Consider the current state of the industry, too. Was it struggling when you accepted your position, but now flourishing? That gives you plenty of room to negotiate.
- Hold Off on a Number
Try not to be the first to put forth a number, says Michael Zwell in Six Figure Salary Negotiation. If asked about your expectations, try to give a less specific answer, such as “My expectations are in line with my experience and abilities,” he adds.If forced to give an answer, factor all the benefits you would like into the number, says Roger Dawson in Secrets of Power Salary Negotiation. Such benefits may include potential work bonuses, health insurance, retirement plan, vacations, and tuition reimbursement.
If you’re switching careers, request the chance to renegotiate after six months, says Zwell. This gives you a window of time to prove yourself in the new role, and then to request more than you could have initially.
- Use Leverage
If you’re applying for a new position, indicate that you’re considering another offer, says Dawson. At the same time, signal some degree of flexibility about salary. Highball your target salary, but say something like, “I might be able to take a little less,” he suggests. Know the company is almost certainly lowballing you if they make an offer—they expect you to make a higher counteroffer.
As Zwell says, if you’re negotiating with a current employer, you won’t be terminated for aiming much too high, whereas with a prospective employer, it’s possible you could lose the opportunity. However, aiming much too high with your current employer could signal that you’re unhappy with your position, he asserts.
If you’re offered a promotion within your company, remember that salary is negotiable here as well. Bring up the salary question with your potential new boss, not your current one, says Zwell. If made an offer, don’t be afraid to make a counteroffer. Consider what they’d have to pay a new hire, as well as the value added from your familiarity with the company.
Most importantly, have patience. The salary negotiation process can take a little time, and not settling on an offer too soon can benefit you over your entire career.
Negotiate in person if at all possible, says Dawson. It shows you’re serious and gives you a chance to respond to questions as they arise. Ask the company to put your agreement in writing, he adds. This eliminates any misunderstanding, especially when factoring in the benefit and compensation packages. Remember, the company is typically as eager as you to reach a mutually agreeable salary and move on!
If you want to get paid what you’re worth, utilize Joel’s Salary Negotiation Coaching.
“There is no substitute for hard work.”
~ Thomas Edison ~
Client Susan Asks: I thought I was going to get a nice bonus… and then it didn’t happen. How can I set myself up for a really well-deserved bonus?
Coach Joel Answers: Susan, you know of your worth and value. You’re adding to the company and you can see your contributions. So the key is to maximize your contributions, quantify them, and share them. Let’s discuss each one.
1. Understand Your Unique Skill Set. Stop and think about your combination of talents, skills, and personality. There are some things you do better than anyone around you. This gives you one-of-a-kind attributes. So evaluate what they are. Perhaps you:
- Offer effective ideas
- Build consensus
- Warn of hidden problems
- Work hard
You may want to ask co-workers what they see as your strengths. Once you understand these skills, build to your strengths.
2. Focus on Adding Value. You want to find that sweet intersection where your skills can add the most value to the company. Look for ways you can measurably increase the company’s bottom line. Find a way to connect the dots between your work and the business’s profit. That will help you… and others see your true contribution.
3. Gather Information to Prove Your Case. Keep track of what you do. Note projects completed and how you’ve helped the company. See if you can find statistics that show your hard work. You may also collect praise and commendations from co-workers, subordinates, and bosses.
4. Hedge Your Bets. Don’t assume you know what it takes to qualify for a bonus… or that others know about your work. First, learn your company’s policies about bonuses. Do they have written criteria? Is it up to the boss? If so, discuss it with him or her. You need to know what you must do to qualify.
Second, consider why they may not want to offer you a bonus. Did a group project not do as well as expected? Did you have a change in leadership and they may not know your track record well enough? After you look at possible roadblocks, take the time to overcome those objections. Be prepared to explain or come up with a work-around the limitation.
5. Insure Others Know Your Good Work. Don’t be pushy or obnoxious about self-promotion. On the other hand, you must make sure others know what you are doing. They need to understand the value you are bringing to the workplace. Your mentor should know of your work.
Discuss current projects with your boss and co-workers. Send emails to keep them in the loop. As you keep them up to date, they’ll see your valuable work.
Then, when bonus time comes around, you’ll be in line to get the bonus you deserve.
Want to insure you get a bonus? Contact Joel for personal help to advance your career and win that bonus.
Talkback: What have you found that helped you get the bonus you wanted?
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Salary is Important, But so are Benefit and Compensation Packages
When it Comes to Looking for a Job
“Don’t lower your expectations to meet your performance. Raise your level of performance to meet your expectations. Expect the best of yourself, and then do what is necessary to make it a reality.”
~ Ralph Marston ~
Client Kevin Asks: I got an offer letter from the company I really want to work for. It’s a pretty low offer. Do I just take what I can get and hope to work my way up once I’m there, or is there a way to negotiate for more right up front?
Coach Joel Answers: Most companies expect you to negotiate, once an offer has been made. It’s not whether you negotiate that’s important—it’s HOW you negotiate that matters. Begin by thanking the hiring manager for the offer. He or she wants to hear how much you’re interested in joining the company and being part of the team. Companies want candidates that want to work for them. Reiterate the skills and experience that you bring to the table and how your past experience will add value to their company. Your goal is to develop a win-win situation for the two of you. If your negotiations are sincere, thoughtful, professional, and respectful, you’re far more likely to have a successful outcome.
Don’t be cocky in your approach, and above all, don’t lie or exaggerate about other offers. You may be the best candidate for the job, but rarely will you be the only candidate in today’s market. If you come off as arrogant or over-confident, your potential employer will likely select the next best candidate. Don’t try to play one employer’s offer against another. This makes it seem like the only thing you’re concerned with is money. Money should not be your primary concern if you’re choosing between two positions. If it’s only about money, the hiring manager will know that, if you get another offer, you’ll be likely to leave their company on a financial whim.
Remember, salary isn’t the only thing you can negotiate. There are many other benefits that a hiring manager may have more flexibility to offer. Vacation time is one of the most common perks people negotiate. Wouldn’t getting three weeks of vacation instead of two mean a higher quality of personal life for you? Stock options, bonuses, compensation package, commission, holiday days, telecommuting benefits, even the amount the employer contributes to your health insurance—these can all be negotiated. Sometimes perks and intangibles are more important than the net amount on your paycheck because they contribute to a higher quality of work and personal life.
What if there’s no give at all on your potential employer’s part? If you’ve presented a good, solid business case for why you should get a certain compensation package, and the answer is “No,” you need ask yourself these questions: Are you unemployed and desperate for a job? Do you see a huge opportunity to advance in this company? Would you really enjoy the job itself? Are there other benefits that make the job attractive? Can you meet your current financial obligations with the offer as is? If so, then you may want to accept the position. However, it may be that this simply isn’t the right opportunity for you.
Keep looking. Your perfect job is out there.
If you are preparing for a salary negotiation in the near future, write down all the aspects of the job as well as the benefits and compensations that are important to you. Make two lists: “have to have” and “nice to have.” This will help you know when to stay and when to say “Thanks, but no thanks.”
Talkback: Have you ever accepted a lower salary than you wanted in exchange for some perks and benefits you liked? Share your experience here.
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“Salary negotiation is simply one interaction among many. After it’s done you have to live and work with the people on the other side of the equation for the foreseeable future. If one person walks away feeling like they’ve lost or been forced to compromise it sets up a disempowering context for the rest of the relationship. When it comes to employment, the paradigm of someone winning and the other person losing doesn’t serve either party in the long run.”
~ Michael B. Junge ~
Client Mark Asks: I’ve been asked to take on more responsibility, but no mention has been made of any pay increase. I think this is a good time to ask for a raise, but I feel mentally unprepared to do so. What can I do to gain the courage I need to bring this up while the time is right?
Coach Joel Answers: Benjamin Franklin once said, “By failing to prepare, you are preparing to fail.” This quote is true for many aspects of our lives, but especially true when it comes to salary negotiation. Whether you’re negotiating your salary for a new position or asking for a raise at your current employer, if you want to succeed, you must prepare. To mentally prepare yourself, focus on these three facets:
Having confidence in yourself is critical to a successful salary negotiation. Although the outcome of your salary negotiation may significantly impact your livelihood, it’s important to not take the process too seriously. Instead of stressing over the process, relax and enjoy the negotiation and believe in yourself. Believe that with the right strategy you will win the negotiation.
Don’t be so invested in the outcome that you’re unwilling to take risks. If you’re unwilling to take risks, you’ll likely not be willing to ask for what you really want. Be fearless and courageous when negotiating. Of course, courage must come from having confidence in yourself and your value to the company.
Believing in yourself will help you manage your stress during the salary negotiation process. It’s natural to feel awkward, uncomfortable and stressed going into a negotiation. However, instead of trying to avoid the uncomfortable confrontation, that comes with the process, know in your heart that you are worth every penny you are asking for and the more confident in your worth, the more money you can make.
To help build your confidence, understand the fact that your salary is negotiable. The reality is 90% of all human resource professionals expect you to negotiate your offer. With this in mind, they often purposely present a lower offer than they are willing to pay, expecting you to negotiate. Use this knowledge to give yourself an even greater boost of confidence in the negotiation process.
The most common reason why new hires don’t negotiate a salary or employees don’t ask for a raise is they don’t think they deserve more money. As a result, when you undervalue yourself, you underearn – shortchanging yourself and your family! Be confident and believe in yourself! Combine this confidence in your worth with patience, and you’re two-thirds of the way to success.
Patience is a virtue, especially during the salary negotiation process. Most salary concessions happen at (and sometimes after) the deadline. Although you may be tempted to give in early and accept an offer, be patient. Don’t try to rush the process, if you want to increase the chances of getting what you want.
When you consider an offer for less than you want, it’s critical that you fully understand how much you’re losing, by settling for less. When accepting a new position, remember future raises are often a percentage of your salary. By starting with a lower initial salary, you’ll continue to earn less than you would with each of these raises. For years, you’ll feel the repercussions of initially accepting a lower salary. A little patience now can pay off exponentially in the future!
The third component of mentally preparing yourself for negotiating your salary is the acquisition of key pieces of knowledge. This begins with knowledge about the employer with which you’re negotiating. Be sensitive to their economic state. The challenging economy, over recent years, has been difficult for many businesses. For this reason, a hiring manager or your boss may be under pressure to work with increasingly tight budgets. Do your research and be mentally prepared to make concessions to the salary figure in exchange for other benefits or perks that may be easier for the hiring manager or boss to say yes to.
You must also do your research about the salary range for the position you’re interested in, factoring in your specific experience and education as well as your geographic area and cost of living. If you’re asking for a raise, track the results of your hard work, to quantify the value you’ve brought to the company. This knowledge not only ensures you’re requested salary is appropriate and realistic, but also helps solidify your confidence in your value.
Lastly, learn about the company’s needs and how you can fulfill those needs. Reiterate to the hiring manager why you are the best fit for the position and, therefore, worth the salary you’re asking for. When you’re asking for a raise, again demonstrate to your boss why you’re a valuable member of the team. Use quantifiable examples, when possible, to show how you’re activities are best fulfilling the mission of the company, taking advantage of opportunities, and best overcoming the challenges they face. Again, this knowledge not only helps you convince the hiring manager or your boss of your value, but it should also give you an increased level of confidence, which will help ensure your salary negotiation is a success.
Still not ready to approach your boss and ask for a raise? Joel offers coaching to help you overcome the fear that stands in the way and learn effective strategies that will increase your chances of a positive outcome. Click here to learn more about Joel’s salary negotiation coaching.
Talkback: When was the last time you asked for a raise? How did you prepare yourself mentally before starting salary negotiations?
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“Asking what I considered an impossible salary when I didn’t want to work for someone has boosted my pay again and again.”
~ Ethel Waters ~
Will has been working the same job for three years without any raise in pay. Due to the downturn in the economy, his company claims that it just can’t afford to pay more to its employees.
I’ve got some good news for Will and for everyone else who has been working longer hours and hasn’t been rewarded with a bonus or an increase in salary.
That might be changing, according to Mercer, a worldwide consulting firm.
In their annual “employee attraction and retention survey,” Mercer found that more companies plan to focus on money – that’s right, cold, hard cash – as a way to retain and engage the right talent.
Because budgets have been tight during the recession, many employers relied on so-called “non-cash incentives.” These were such things as communicating the value of total rewards to employees, work-life programs, formalized career paths and special project opportunities.
But as the economy recovers, 25 percent of respondents say they’ll rely less on these types of rewards.
Instead, they will focus on base salary increases, short- and long-term variable pay and training and career development to retain and motivate their best people.
So as your employer’s purse strings begin to loosen, now is the time to proactively demonstrate your value to your organization. If you are like Will, still waiting for a long-overdue raise, I recommend doing the following.
1. Make yourself indispensible.
Volunteer to high profile projects that have the potential to affect your company’s bottom line.
2. Align your priorities with key company goals.
Focus on things that matter – to your boss, to his or her supervisor, to company executives and to your shareowners.
3. Eliminate or reduce your time spent “non-essential” work.
Write down your top 10 priorities. Develop strategies to free up more time to spend on the top three and less on the bottom two-thirds.
4. Quantify and communicate your accomplishments.
At the end of each week, write down your key accomplishments and try to assign a dollar amount to your specific contributions.
5. Capitalize on training or personal development opportunities.
Continue to develop your skills and capabilities. That way, when your company begins to expand, you’ll be in a more competitive position (and your resume will be stronger, too, if you decide to venture outside your organization).
6. Don’t shy away from self-promotion.
Think of ways to promote your personal “brand” at the office. There’s a difference between grandstanding and presenting the facts in an objective way.
Someone is going to benefit from this shift in employee compensation and it might as well be you!
Even if salary increases aren’t currently being offered by your employer, valued employees can find ways to negotiate for higher pay. Read Joel’s book, Get Paid What You’re Worth, to find out how you can negotiate a salary increase or a higher starting salary in a new position.
Talkback: Last time you asked for a raise, were you successful? How long will you wait before trying again?
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