How to negotiate your salary (and earn an extra half-million dollars in your lifetime)
Some folks claim that if you do what you love, the money will follow. Others say that a job is just a job — you’re not meant to like it. The truth lies somewhere between these two extremes. There are few things worse than a job you hate; and many people enjoy fun, fulfilling careers while earning a good living.
Whatever the case, any job is more bearable if you’re paid well. Plus, a high wage means more money to pursue your goals and dreams. One of the best ways to increase your income is at the source: during salary negotiations when you land a job.
Why You Should Negotiate Your Salary
Research backs him up. According to a 2010 study conducted by George Mason University and Temple University, failing to negotiate on an initial job offer could mean missing out on over $600,000 in salary during a typical career.
“We spend years thinking about what we’ll be when we grow up,” Chapman writes. “But when it’s time for a raise, most of us just accept whatever we’re offered. How many minutes do we spend negotiating the money? Zero.”
Only about half of all applicants negotiate their salary; don’t be one of these folks. If you don’t ask for more money, your employer certainly won’t just give it to you.
Before we look specifically at negotiating salary, let’s review the basics of negotiation in general.
You Can Negotiate Anything
In his book You Can Negotiate Anything, Herb Cohen writes that there are three crucial variables in every negotiation:
- Power, or the ability to get things done. In salary negotiations, you gain power from perceived expertise or legitimacy. The better qualified you are for a position, the more leverage your have. You also gain power through persistence, attitude, and taking calculated risks. You have power if you’re willing to walk away; if you’re not, the company can name its price.
- Time. In negotiations, the side with the most time generally has an advantage. No matter how much pressure you’re under, always keep your cool, maintaining an appearance of calm. Having other options buys you time. You’re in a better bargaining position if you already have a job (or job offer) and don’t need to accept his one. When you believe you have to have something, the other side can easily manipulate you.
- Information is the final piece of the puzzle. The more you know, the stronger your position. Do your research before you negotiate. During negotiations, act on whatever new info comes to light. The interviewer’s questions, responses, and attitude all give you valuable information.
Now let’s look at two (very similar) methods for negotiating your salary.
Note: Remember that these techniques are generally applicable for discussions during a performance review. You can use these ideas to ask for a raise, not just to negotiate your salary for a new position.
How to Negotiate Your Salary
In Negotiating Your Salary, Jack Chapman offers five rules for getting what you want.
First, postpone salary negotiations until after you’ve been offered a job (or finished a performance review). Chapman says the hiring (or evaluation) process consists of two phases: judging and budgeting. You can only hurt yourself by dealing with salary when the employer is judging instead of budgeting.
Second, let the other side make the first offer. According to Chapman, it’s tough to win by being the first to name a number. For many people, it can be awkward to evade direct questions about salary expectations. Chapman recommends preparing for this situation. His website includes a short video on how to answer the question, “What are you earning?” (You might also read Penelope Trunk’s advice on how to answer the toughest interview question.)
When you hear the offer, repeat the top value — and then be silent. “The most likely outcome of this silence is a raise,” Chapman writes. This technique buys you some time to think while putting pressure on the employer.
Next, counter the offer with a researched response. Your next move is to make a counter-offer based on what you know about yourself, the market, and the company. Before you go into the interview, have a minimum salary in mind. Base this on careful research using tools like LinkedIn, Salary.com, CareerBliss.com, PayScale.com, and GlassDoor.com. Also take the time to ask friends and colleagues for confidential feedback on what the position you want ought to pay. This information will give you power.
Finally, clinch the deal — then deal some more. The final step in salary negotiations is to lock in the offer, and then negotiate additional benefits. This is like locking in the price of the car you’re buying before you begin negotiating the value of your trade-in.
The Noel Smith-Wenkle Salary Negotiation Method
Chapman isn’t the only one espousing these techniques. My research shows that all effective headhunters and coaches essentially advocate the same salary negotiation process.
For instance, Noel Smith-Wenkle was a job headhunter during the 1980s. He developed the following method to get as much money for his clients as possible during salary negotiations (which, in turn, meant a greater commission for him).
Smith-Wenkle’s number-one rule is: never tell the employer how much you’ll take. Let the company name the first number. (Chapman gives the same advice. So does almost every other negotiation coach.)
The Smith-Wenkle Salary Negotiation Method involves four carefully prepared responses:
- If the company asks for a salary expectation on the application, leave it blank.
- When the company verbally asks how much you want, say, “I’m much more interested in doing [type of work] here at [name of company] than I am in the size of the initial offer.” Smith-Wenkle says this will work about 40% of the time.
- If the company asks a second time, your answer should be: “I will consider any reasonable offer.” This is a polite stalling tactic, and Smith-Wenkle says this will work another 30% of the time.
- About 30% of the time, you’ll have to respond again. (Smart hiring managers know they shouldn’t be the first to make an offer.) Again, your response is a polite refusal to answer the question: “You’re in a much better position to know how much I’m worth to you than I am.” This is your final answer, no matter how many times the company tries to get you to go first.
The sole purpose of this method is to get the company to be the first side to name a number. Once the company makes an offer, you have two options. If the offer is above your minimum, take the job. If it’s below your minimum, tell them it’s too low — but don’t say by how much.
More Info on Salary Negotiation
Over the past decade, I’ve talked to several people about how they’ve successfully negotiated their salaries. All of them have stressed two factors: preparation and practice.
Remember that the purpose of a job interview (or performance review) is to sell yourself. If you don’t believe you’re worth the price you’re asking, your employer won’t believe it either.
Draft a list of ways you’ve helped current and past employers. Measure your achievements in dollar terms, if you can. (For instance: “By finding a new supplier for our packaging supplies, I’ve saved the firm $50,000 over the past year.”) Create a written list of talking points and use this to make your case for a higher salary.
If you’re just starting out – you’re a recent university graduate or moving to a new career – you might not have hard numbers to prove your worth. In that case, pitch your enthusiasm and work ethic.
And the practice portion? Don’t let the actual interview be the first time you try your “flinch” or try to deflect questions about salary. As silly as it might sound, take some time to role-play with your spouse or a friend. Have them take the role of hiring manager and ask them to grill you so that you can see what it feels like to handle common questions. (For added fun, turn the tables and you take the role of hiring manager.)
Negotiating your salary is one of the best ways to improve your financial position. And it’s a move that can have an enormous impact on your financial future. When you negotiate a better salary on this job, that number will help you when you negotiate the salary for your next job. It’s like a giant snowball of money! And it’s a snowball you can directly influence by making it as big as possbile at the beginning.
Want more info on how to negotiate salary? Pick up a copy of Jack Chapman’s Negotiating Your Salary (which has helped many GRS readers over the years). Also take a look at this free PDF report from the Program on Negotiation at Harvard Law School. The “Ask a Manager” blog is packed with employment tips, including this article on what to say when you negotiate salary. Finally, Ramit Sethi offers a free one-day mini-course on negotiation, which includes tips for negotiating your salary.
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There are 69 comments to "How to negotiate your salary (and earn an extra half-million dollars in your lifetime)".
This is probably one of the most helpful, useful, and valuable posts I have read in a really long time. More people need to know about the different ways they can use to boost their salary.
Great stuff JD!
Another good book is “Knock ’em Dead: The Ultimate Job Search Guide”. It has more tips than just negotiating salary, but the negotiating salary tips were good. It’s not the easiest thing for many people to do, including me. But the payoffs last for as long as you have your job, as salary increases are based on current salary. I know when I negotiated my salary 10 years ago, I did get a few thousand more than they originally offered. I was happy that I forced myself to do it.
I agree, this is definitely a needed skill if you work for someone else. As a wise negotiator once said, “You don’t get what you deserve in life, you get what you negotiate.”
By increasing my wife’s negotiating skills to help overcome her “they’ll see that I work hard and they’ll pay me what I should be paid” attitude, she increased her salary by almost 80% in three years of effective negotiations with her office manager.
This isn’t about tricks or acting. It’s about not just taking what’s offered like most sheeple do. After all, the employer picked you! If you confirm their good judgment by showing them that you value yourself highly as well, it’s a win-win. What you have to avoid is fighting for every last scrap on the table. That can make them feel you’re only there for a salary and you’d then be starting off your work relationship on a sour note. Leave some money on the table for them (win for them), but don’t leave a lot of money on the table (win for you).
I LOVEEEE Glass Door. I am surprised how many people still use payscale.
What good does knowing the average pay for your job in a given industry do if you have no idea where your company stands?
So your job, on average in the industry, is paid $50,000. You get paid $45,000. So you should ask for a $5,000++ raise, right?
Not if your company, as a whole, is on the lower end of the industry. To get paid that “industry average” or more you may need to switch companies.
Using a resource like Glass Door will let you know what you deserve within your actual company. Or which companies will pay what you deserve.
That doesn’t mean discount the industry stats, though. They can surely be used.
This is a great post. It is especially important I think for women and starting grads to read. I read somewhere that the fact that women do not negotiate their salaries as often as men is responsible for women earning less over the course of their career. While the article I read was specifically written to explain some of the discrepancy between male/female pay, it holds true for anyone- if your starting salary is lower, percentage base raises throughout your career will be lower by definition.
So while I agree with the spirit of the advice, you need to know when the salary decisions are made. If your manager provides quarterly reviews, the quarter before annual reviews is a good time to discuss salary, before any decisions are set in stone. If your manager does not provide quarterly reviews, I suggest on a quarterly basis (if not more frequently) you document your accomplishments and send them to your manager and request a meeting to discuss to make sure you are on the same page. That way there are no surprises.
You bring up a great point! I’m on the second video already. I love this kind of material, especially when presented in video form.
I was not familiar with Chapman at all before this. Thanks for pointing us in this direction. Sometimes we get stuck in the ultra frugality mode and need a little kick in the butt!
Artist, I was thinking the same thing. The book that I’m familiar with is called “Women Don’t Ask”. It’s really good.
I’m glad you included a reference to an updated version of the book. Of course, human behavior isn’t likely to change as quickly so I’m sure that these techniques are effective, but being too rigid in today’s market may leave a sour taste in HR’s or your new boss’s mouth.
Thanks for this post! I’m self-employed so I can’t really negotiate a raise(!), but I’ll send the Glass Door link to my husband.
I still remember the negotiations I had 6 months back when I was interviewing. Negotiation pays and I had 2 employers raise the offer by $2k-$3k.
I am going to have my performance review in June and will definitely read the book before that.
Any tips from all you readers?
I think it’s a great idea to negotiate, but it hasn’t worked for me in either job I’ve held.
For the first job, I researched salaries of similar jobs in my city. I tried to evade giving out a number first, but he flat-out refused to go further until I said a number. So I said a range, based on my research, and he said the starting pay is X, and that’s where I’d start ($5K less than my low figure).
In my job now, listing my salary requirement was a required field on the application. I worried that leaving it blank might result in no interview. When my workload increased significantly last year, but my raise was less than my raise the year before, I scheduled a meeting with my supervisor, explaining the situation (with documentation). She said she would talk to the department head, and I never got an answer. No matter how many times you follow up, you get no where, until you just feel like you’re a nag. No answer is the way they handle most things.
So, who knows, maybe some of these tips might help, but to me it seems like my bosses have just determined from the start what the salary will be and what the raises will be, and you take what you’re given. I can’t wait to be self-employed.
Useful – thank you! This is twice in 2 weeks I’ve heard about “Women don’t ask”. And no, negotiating didn’t work for me even though I had 2 offers; I was told it wouldn’t be “fair” (which was a lie of course and I am now in a situation where I and the other women are consistently underpaid).
April,
I enjoyed reading your very realistic account of what can often happen. Sometimes these things have good advice, and sometimes they’re just pie-in-the-sky musings by some type of motivational speaker. “Show that you value yourself..” etc.
From my own experience, every time I interviewed I was asked what I’m expecting for salary. These books and tips always say “avoid the question,” but honestly, what are you going to do?
“So what kind of salary did you have in mind?”
“Pass. Next question.”
The way I handled it was told them what I was making presently, which is by free-market definition pretty good evidence of what you’re worth. That gives them a number to think about without you actually saying “And I want so much more” or “I won’t work for anything less than that.”
In my case, I was getting out of the military, and my interviewers, I think, were a little surprised at how much I was making. I explained very honestly that the number included annual bonuses and special incentive pays; which bumped it up significantly.
In the end, they offered me a base salary just a little bit less than the figure I quoted (and I think that that might have been a little more than they were expecting to pay) but their base salary offer was in addition to alot of bonuses as well, so in the end I came out making more.
Negotiation doesnt work well in academia. That said, you bring up an important point-that we should think of ways to increase income as well as cut spending. Over the last 10 years, I made 3 job moves just for salary, nearly TRIPLING my income. It wasnt easy but boy did it pay off. I moved a lot, twice cross-country, but I think it was worth it, particularly as I am single and have only myself to depend on for retirement. Only in 1 case did I negotiate, but it was up to market value as my previous position was underpaid. I stated my reasons and got the salary I asked for-it pays to know your worth, and calmly ask for it-they can only say no.
I have a question (I’m relatively new to the workforce). I recently received a promotion, but we haven’t discussed salary yet. The position I was given was originally intended to be at a higher level (managerial) but they adjusted the position to a coordinator (non-managerial) level so I could take it (it’s still a step up from my current position). Would it be a faux-pas to point out that they’re saving money by hiring me instead of a manager when I’m negotiating the raise?
As Maharani points out – there are certain industries where negotiating for salary doesn’t work as well. However, even in academia, I’ve found that you can negotiate for other benefits such as increased research or professional development budgets. Ex. the salary was pretty specific, but I was able to convince the dept. head to cover the costs of some professional memberships.
One problem we’re facing (employee of a state university system) is upcoming furloughs. So not only is there a freeze on all raises, but we’re to expect a temporary cut in pay!
It would be great to hear more about alternative ways to increase income.
To Kam,
Not at all in my opinion-they ARE saving $$ by hiring you-say so!
To Kate F: of course-I agree-I was a scientist myself for 20 years! Can you apply for more funding through the stimulus program? Everyone is lining up at the federal trough again…. It may not apply if you are on furlough though.
I remember getting into a 2 hour battle with the HR manager at my last employer over compensation. Like any business negotiation, you try to get more while they try to give less. These tactics are excellent but incomplete. Here are 5 more tactics anyone can use: http://tinyurl.com/ca2p59 Keep up the great content!
The first thing I thought when I saw the title: ” This isn’t Getting Rich SLOWLY” — haha!
OK, onto my real question:
Do you think these tatics will work in an environment where the unemployment rate is so high? I guess the thought is there is most likely someone just as qualified that will do the same job for the offered pay.
Those of you mentioning the current economic climate make a good point, but I think these principles still apply. You may have to make some adjustments, but I think you can still follow Chapman’s steps.
I recently spoke with a man who just sold his business. He used similar tactics during those negotiations. In his case, he really was making thousands of dollars a minute by doing these things. Even during a recession.
Nice article, but I feel in these times with hours and salaries being cut, some of us will not be able to apply these techniques. I feel that the current attitude of some employers (including my own) have the mantra “at least you have a job” and would use the economy as an excuse as to not give a raise.
Personally I have been working for a company over 2 years and have not recieved one extra cent because my employer sucks and sales are down 30 – 40%. I have been promoted so to speak and have a lot more responsibilities than when I started. I have also mentioned getting a raise multiple times but have been met with the same response. So its nice thinking but does not apply to me.
You can negotiate in academia if they really want you specifically. If you’re just starting out and there are thousands of other equally qualified people out there who would kill for that job, not so much. So that Nobel Prize is not just an honor, it’s a sound career move :).
Yeah, my company cut our pay by a few percent this year, but the advice is still good. Just can’t put it to use now, so the frugality advice is more relevant to me right now. I’m a new reader of this site – thanks for all this great information!
Great tips–I definitely need to work on my negotiation skills. But I don’t agree that #1 is always the best way to go. I prefer to find out the salary range before going through the entire interview process. In my line of work they usually require me to show them samples of my work and to complete an assignment as a part of the process. I don’t want to spend my free time doing all of that if their salary range doesn’t match up with mine.
I’ve had success in the past with turning the tables and just asking the recruiter up front what the salary range is in the first phone call. (Still making them say a number first!) I wait until the end of the call, after we’ve built up some rapport and they tell me they want to bring me in for a face to face interview. At that point, I say something like, “I don’t want to waste your time or mine pursuing something that won’t be the right fit.” And then I just flat-out ask for the salary range. The recruiter and will almost always give you something to go on. And if you do “the flinch” as demonstrated in the video, they sometimes give you even more detail, like telling you they could possibly go higher for the right candidate. Score!
But if it’s below my range, it’s not worth my time, and I politely tell that to the recruiter and we both get on with our lives.
I also work in a university system but not as a researcher or someone with the capacity to apply for my own funding.
I negotiated my salary when I started to start around the mid-range of the set scale but now we won’t be getting pay increases because of budgets. Our pay increases are standard and not linked to performance, which is a big shift for me.
I’ve also worked in the non-profit setting where I was very underpaid and it was a difficult transition to get what I’m worth. My current position pays more but with much less responsibility (sounds good but it’s not as stimulating).
I would be interested in more information about folks who work in social service jobs and non-profits and making the switch to corporate. I’ve only ever seen advice for people moving the other way (corporate to non-profit). Thanks!
@lidia
I made the switch from a more artistic career towards corporate, and in my case, I was lucky that my boss was honest and did not try to screw me over, as I was shifting into an area where I had neither tangible experience nor knowledge of the overall salary range. He actually offered me more than what I had listed as my target salary.
Many corporations use pay bands or pay grades, and a lot of times the job listing will mention the specific grade, or will use it as part of a code for the listing. If you don’t know the specific salary range for the job you are applying for, you can always look at other listings, and try to see if there is an identifiable code. Then you could check the salary range for those positions to get a sense of what the range may be.
I have yet another question (I asked one earlier, above, about whether it’s appropriate, during the promotion process, to bring up the fact that a company is saving money by promoting me instead of hiring someone with more experience). This is the first time ever I’m getting a raise (I’ve only been working for 2 years) and what is the normal percentage for a raise that comes with a promotion (not a regular performance raise, a promotion raise). Is 10% hoping for too much?
it’s true, if you fight for it the worst that will happen is that you don’t get it. However, most bosses, assuming you’re doing a good job, will hook you up.
I remember one job interview that said, “Our salary range is listed at $X-Y. Where do you think you fit in?”
I should have paused, but I didn’t. I said, “I have ABC [many] years of experience of self-employed contract work in this field, high-level credentialing, ongoingdevelopment, and create my own innovative programs in this exact field. My experience makes me worth the top of whatever you would pay”.
That being said, there are many factors involved in hiring as well as payscale. Sometimes experience or ‘perfect fit’ are not the complete story on the employers’ ends… including the stories in the news of multi-year high level employees being laid off because cheaper employees are hired, thanks due to the experienced employees’ hard work.
It’s all a chess game. Smile and do your best while playing 🙂
As others said, negotiation in academia works in limited ways – for extras (time for research, travel funds, etc), or when you have a competing offer in hand. Or I guess if you file a grievance (as a female colleague of mine successfully did).
Kate F – can you do any independent writing or consulting? Teach any workshops?
Kam @ 60 — at my company, we were told at the end of ’08 that as part of general budget cuts, our max raise would be dropped from 5% to 3%. Ouch!
Maybe it might work for you to go from the numbers you’d like to see and translate that into percentages?
Note that the success of this sort of bargaining varies wildly based on the field you’re in. If you’re a high school student trying to get a part-time job at Starbucks — good luck. If you’re at Microsoft Research and Google’s recruiters are trying to court you away, you can probably name your own salary.
But if you’re in any field where good people are valued rather than seen as expendable (which should be pretty much any job that requires more than a week’s training to do well) then negotiating should work pretty well.
One thing not mentioned in the post — you don’t have to be good at this for it to work. Hiring managers throw out low numbers hoping you’ll just say “ok”, even when they’re perfectly willing to pay you much more. When they throw out a first offer, you don’t have to be a master negotiator, all you have to do is say “Well, that’s lower than I thought,” and you’ve really got a pretty good chance of them raising the offer immediately.
Right out of school, I was called back after an interview and offered $60k to start at a company. I basically said “eh, I don’t know, I’ll think about it, I’m also waiting on feedback from another interview.” Their response was, “how good would this offer have to be for you to decide right now?” I threw back $70k, and started for them two weeks later at $68k. I had no negotiating experience and hadn’t read any books on the subject, all I did was ask for more.
I don’t know what the article means when it says “negotiate additional benefits.” Things like retirement plans and health insurance are generally uniform across the whole company. I doubt they’re going to start offering dental insurance just for you. You’d have to be coming on as a CEO or something.
When my job responsibilities changed and I took over the work a coworker was doing after he left, my employer told me that a salary increase was forthcoming. I put that in my pocket and when the time came for negotiation I was prepared to state what I thought I was really worth.
I think that it’s important to know what you’re worth before negotiating, to not undervalue yourself, and to be prepared to ask for it.
By doing this I was able to double the amount they initially offer to raise my salary, and it wound up being a 40% increase to my pay.
@ Michelle – sorry to belabor the point, but is that for a regular performance raise or for a raise accompanying a promotion? I was under the impression that a raise that accompanies a promotion is different (and higher) than a regular performance raise.
@Tyler:
I think “negotiate additional benefits” doesn’t have to apply to “offer me dental insurance even though that’s not part of the package you offer” but rather playing with the details of your new position. For example, is there usually a waiting period before you’re eligible to participate in the company’s 401K? Can that waiting period be waived or shortened? If a person in your position is usually given only 1 week of paid vacation, or your paid vacation only becomes available after a year, negotiate for it to be available immediately, or for a greater period of time. If you’re in a position where you contribute measurably to the bottom line (say, a salesperson, or managing a department) you could negotiate a guaranteed performance-based bonus in advance (say, if I manage to accomplish everything that needs to be accomplished in the way of marketing, and shave 5% off the marketing budget, I get a bonus equivalent to 2.5% of the savings.)
I find this particularly interesting today since I’m faced with negotiating against a pay cut; different circumstances, but same principles, I think! Thanks for the post.
Thank you for highlighting the power of negotiation. Great book review, I’ll probably have to look for this one at my local library (gotta be frugal). I appreciate the insights!
I got offered a job this year for my first job to an ultra-large software company (you’ve heard of them), and unfortunately, at that point, all of this doesn’t matter.
I tried to negotiate my salary to the highest possible percentile (which was, fortunately, only a few thousand more), and they don’t budge on salaries. So if you work for a big-name company, you probably don’t have a bargaining chip to work with. However, if you get a job for a valuable position at a huge company, you can trust that they do their homework and will pay you far above average. Did I get to negotiate? No. Am I complaining? Definitely not 🙂
Mmmm.. Not sure about this one. My problem is, at least in this current environment, it is difficult enough to get an interview in the first place. Most employers of any caliber have exhaustive interview processes that can last weeks. Not talking salary until the end can be a colossal waste of time and effort. Secondly, you better have a backup or a war chest saved to give you the ABILITY to walk away if the pay is not what you desire. Thirdly, this is a “hirers” market. They damn well know there are a lot of fearful job seekers out there and the laws of supply and demand will take effect. I know there are a lot of overconfident people out there who think they are worth their weight in gold, and some may actually get it. The problem is what you THINK you are worth and what you are ACTUALLY worth can be two completely different animals.
When I left the Navy as a junior officer they had us think we were going to walk into the civilian world making 100k, no problem… PFFFTT!!!
I just recently negotiated my starting salary for the first time. In January I started working again after taking a year off after my second daughter was born. The previous job I had was at a set rate that everyone got when they started so there was no negotiation. So, in the interview they probed me about what kind of salary I was expecting, mentioning that the higher ups were likely only going to approve a salary at the lower end of the range (the range was about 38k-68k). I was evasive and said I would have to run the numbers seeing as I would have to put two kids in childcare if I took the job. They nodded and the interview went on. By the time I got home from the interview, I had a message from HR offering me the job so I figured they wanted me pretty bad and decided to play hardball. They offered me 53k and I countered for 61k. They gave it to me without blinking. I was so proud of myself because I had never asked for more money before, and it worked!
I should qualify though, that I wasn’t taking a huge risk in asking for more money. I knew they wanted me and worst case, they would say no and I would spend a few more months at home with my kids before getting a different job. I probably wouldn’t have taken the risk if those 2 things hadn’t been the case.
I think this advice is silly…
The cornerstone of all negotiation is leverage. In the job world, if you’re an employee, your leverage is the potential to work for someone else. If you’re an employer, your leverage is to hire someone else.
So the number one question you have to ask yourself is, “Could I get paid more by someone else?” If the answer to that question is “yes,” then negotiate higher by frankly telling the employer you think you could get paid more by someone else. If the answer is “no,” then don’t go asking for a raise or higher salary because you have no leverage.
As for telling your desired salary in interviews, give a range, not a number. If you’ve done your research, you should have a range in mind. Name a range that you would honestly be comfortable with.
But what happens if your range scares them off? GOOD! You just saved yourself time and aggravation, because they were not prepared to pay you an amount you would be comfortable with. Isn’t it better to know that in advance and not waste time?
Some would also say to never name a number first, because the number they would’ve said may have been much more…but again, this comes down to research. You should have a range of what you’re worth in the market. If they would have drastically overpaid you, then that’s not a good position to be in…you’d eventually be a target for firing because they’ll find out you’re too expensive. On the other hand, if you did your research, then the range you give them should roughly match what they were prepared to pay anyway, so no harm done.
I’m terrible about negotiating my salary! I must be pretty bad because the few times I was offered less then I felt I deserved, they did not call my back with another offer. I’ve lost two jobs that way, though to be honest, it was probably a good thing. The company I’m with now actually does a pretty good job when it comes to paying salary. My beef with them is more on the incentive side. Even credit unions encourage sales in order to stay viable, so we are still required to offer products and services. But, the amount of work they want us to do in order to meet the sales goals is extremely high in comparison to what they are offering us in terms of incentive. It’s a never ending battle in banking.
At any rate, these are really good tips and I will try to keep them in mind as I go through my next raise evaluation. Thanks for sharing!
I negotiated for a $1,000,000 total comp in 2008 in March. Come year end, I was paid only $430,000 despite the big bosses promise. What happened? The world came to an end, and I didn’t get anything in writing.
GET YOUR OFFER IN WRITING! Handshake is no good, and that cost me $530,000.
While I agree negotiations are good and should be something to consider, one of the subjects that should be brought to light in this post is in today’s economy where thousands are finding it hard to secure a job and thousands more are getting laid off by the day and many on the brick of getting there, people (good people included) are desperate for a job and pay (at any number) is lucrative to many.
Given the situation above, negotiating is tough and when done slightly wrong, could mean a potential lay off or being let go simply because the bargaining chip is on the employer’s table. While I agree that you definitely should still negotiate, it is good to learn the proper way to handling the situation. The best being prove that you’re worth that much before asking. If its apparent, many employers should hopefully be smart enough to offer the raise.
This is brilliant advice. There is so much information on how to save 40 on your heating bills etc. but (as you say) this is easily dwarfed by the increase in income you can achieve by negotiating.
It has to be said that now is not the best time for an employee to be negotiating, but each case is different. It is also true that some of the sales techniques used to put perssure on your boss will be very hard for a non-sales person to put into practice.
I think it’s easier to negotiate up front instead of on the job. My husband got a job this year, negotiated a good salary and signing bonus, and now the company has a salary freeze and cost cutting in place. That said, I do think with the current economic state there is a lot of competition out there for jobs.
I negogiated a salary increase last year. I work for a non-profit but the for-profit version of my job was paying 20-30,000/year more. I love a lot about my workplace and didn’t want to “jump ship” to make more money. So I gathered my research on the other salaries, as well as documentation on what exactly I contributed to our company. I went into a meeting with my manager, and started to present my case by showing the documentation of what I did for the company, and she refused to look at it, stating “she knew very well what I did for the company,” asked what increase I felt would bring me closer to what I felt I should be earning. Being a non-profit, I didn’t want to shoot too high, so I asked for a 4-4.5 percent increase instead of our standard yearly 3 percent. She told me that they “would see what they could do,” and that I would know a few weeks after my review.
The increase I received was 5%!
Definitely a major place where most of us need work. Thanks JD!
Another person I read (Herb Cohen?) suggests the opposite on who goes first. Since we all succumb to anchoring (the tendency to fixate on the first price heard), you can put the negotiations in a higher bracket by going first if you have the research and confidence.
“Well, a friend makes/I’ve seen jobs like this going for/I used to make/elsewhere I could make …”
Don’t undervalue the power of benefits – especially paid time leave//vacation. example – at $60K salary, if moving from a company in which you have built up seniority to 4 weeks leave to one in which your clock is reset to 2 weeks, you could be costing yourself $2500 by not negotiating this point. $1000s per minute of time addressing this issue! Compare the Short Term Disability & Sick time policies – make sure they are comparable, if not, suggest and offset in your compensation…i.e., if current company offers STD that kicks in at 5 days, but no sick leave, but future company offers no STD but 12 days sick leave – assess the ‘risk’ and ask for additional $$ to cover an independent STD policy.
$1000 in a minute is a bit exaggerated 🙂 But these tricks really work, in fact employers use almost the same tactics!
I just wanted to add that all the comments on the economy are somewhat irrelevant in certain fields. I’m a highly skilled engineer, and there are more employers looking for people with my skills than there are people with the skills. Obviously, this puts me in a strong negotiating position. I have a job I like right now, but agreed to interview with a market leading company that is looking to expand in my area. I would expect a 15-20% bump in pay to leave my current (good) job, and will have no problem turning down the position if the employer won’t offer that.
Did you mean to link Salary Scout because the last post on that site was made in 2007, seems like a dead end?
“Negotiating Your Salary: How to Make $1,000 a Minute” is a winner. I just landed a new job, asked for and received a bigger compensation package. I highly recommend this book.
These are great but won’t work when they ask you for your salary range upfront on your application, especially online applications that require this questions to be filled.
Great tips, but I disagree that you should let the employer give out the first number.
Instead, YOU should be the one to set the salary anchor (the “anchor” is the number around which the negotiation takes place), and make that number significantly more than your currently (or offered) salary, but completely justified by your value to the company. Maybe a 40% increase is warranted, so ask for 50% (since it’ll likely be negotiated down). Whatever the number, say it matter-of-factly, and don’t blink. Lay out your case and you know your value. Don’t be emotional. Practice your meeting with a friend or spouse.
Back when I had a corporate job, I did this, and boosted my salary about 25%, when the typical salary increases at the company were 2%-4%.
People are often reluctant to ask for more–especially if it’s a big jump in salary. That reluctance boils down to not valuing yourself; it’s common, creeps into other situations and life choices, and is extremely limiting.
This is probably one of the most helpful,valuable posts,thanks for the post
Salary negotiation is such an intimidating thing for a lot of people but can have huuuge implications. I think too many people consider this a once-and-done thing too but raises and such can be negotiated as well 🙂
Another tip – if they’re firm on salary, try to negotiate other things. My brother just switched companies and negotiated an extra week of vacation time, for example.
These are great tips. I was horrible at negotiating my salary when I was working full time. Now that I’m self employed part time, life is much easier. Negotiating with other companies is more natural to me. I still have a lot to learn on this topic.
Thank you for this post. It couldn’t come at a better time. Tomorrow, I have a second interview for a full-time management position after 20+ years of self-employment. Because the job is at a large medical institution and they published the salary range, I’m not sure how much I can negotiate salary-wise (I’m not going to settle for less than the top number in their salary range). But, I do plan on negotiating extra benefits (vacation).
Karen, I would LOVE to hear how your negotiations go, whether good or bad. I’ll be GRS readers would love to hear it too! 🙂
I second that!
So, here’s how my negotiations went. On Monday, I was offered the job. Because this is a large medical institution and the second biggest employer in my state, I have several friends who work there. They were able to give me a lot of valuable advice. The first number that I was offered was a low-ball number. Because I did my homework, I was able to go back and gave them a number that was a little higher than I wanted. I also had in my mind the lowest number I would accept. In the end, I didn’t get exactly the number that I wanted, but higher than their original offer. I did negotiate and got in writing that they would evaluate my performance in 6 months for a merit increase that would get me to the number I was hoping for, and we spelled out, in general, what the parameters would be for judging my performance. It was an exhausting experience, but I’m excited about the job and the opportunities that await me.
Before my last annual review I asked a male colleague for advice on how to negotiate what I wanted. And then I practiced it. I knew I was going to get the usual song and dance about how they couldn’t give me the amount they knew I deserved, blah blah blah. But what I really wanted was more vacation time. And even though I was nervous, I stated my request. I didn’t ask for it in my usual way, “What do you think about giving me more vacation time?” insert passive-aggressive raise in speaking tone at the end. I just said, “Okay, I understand your position. I would like 3 more vacation days.” I was very specific and direct and quaking on the insides. And it worked. And, to boot, I got a raise too. Not much, but better than nothing.
One recent thing to keep in mind: it’s now illegal for employers in California (and a few other states) to ask about your salary history. This is a huge tactic employers use to take advantage of low prior wages, so don’t offer that data and depending on where you live, recognize that being asked about it is now illegal.
Not strictly relevant to the post, but I found out from my buddy over the weekend that you were back here at GRS. We occasionally discuss the “golden age” of PF blogs and how much we enjoyed this one. I’m glad to see it. Incidentally, he found out because he had one of your old posts bookmarked that he goes back to reference from time-to-time, and I think that’s pretty awesome in and of itself this much later.
Most of this is good advice, but I pause at the suggestion to say “You’re in a much better position to know how much I’m worth to you than I am.” A candidate should have conducted enough research to know the going rate for the position they are applying for, and if they throw out a sentence like this, it will make them seem like they don’t know their own worth.
A good question I’ve used to deflect “what are your salary expectations?” is to simply throw the question back to the interviewer. I say “I’m hoping you can share the salary range you have in mind for this position.” They have a range, so ask for it! Most times, I get an answer, and then I can say “great, my expectations are in that range so we should continue to talk” or “thank you. I’m actually looking to be closer to $x-$y for ABC reasons, and I understand that it might not make sense to continue talking if we are too far apart on salary.” It doesn’t have to be a game, it can be a conversation.
Negotiating salary was so awkward for me when I was interviewing this past fall. I had 0 experience with it. The majority of the positions told me I was asking for too much even though I knew it was the going rate for my education/ experience. I ended up going with a job that gave me and offer with a disclaimer that they weren’t willing to budge on the pay, and that it was a take it or leave it type of deal. Since I really wanted the job, I took it, and have been happy so far. I still wonder what would have happened it I would have tried to negotiated despite the firm disclaimer.
I think that by far the most difficult part of using tactics like this is developing the balls of steel it takes to actually use them. Forcing the employer to make the first offer sounds easy, but when you’re actually in the negotiation situation, you might find it’s a bit more difficult than when you had imagined it in your head!
The book “Never split the difference” offers unexpected tactics that absolutely work!