Negotiate Pay

Asking for more money can be nerve-racking and scary for a lot of people. It’s easy to get up in your head about having a job offer rescinded or being reprimanded by your boss. Take a deep breath and don’t worry; pay negotiation is a common and normal part of accepting a job offer or asking for a raise and the worst that happens is they say “no.” Remember, negotiation is a two-way street. It’s important to listen, see things from your employer’s perspective, and be flexible while you’re pushing for a raise or higher starting salary.

Steps

Negotiation Tips and Sample Emails

Doc:Salary Negotiation,Email Negotiating Starting Salary,Email Negotiating Raise

Assessing a Reasonable Baseline Amount

  1. Look up the industry standard pay for your position or role.[1] Start with a basic online search for “(occupation) salary.” If you’ve been at a position for a few years, add “senior” or “experienced” to your search. Find salary information on Glassdoor, PayScale, Indeed, and Salary.com to get a sense for the average salary for people in your position.[2]
    • It is impossible to negotiate effectively if you don’t know what the standard pay is for your position.
    • You can also look at government data if you’re applying for a position in the public sector. Depending on where you live, that salary data is usually public.
  2. Adjust your market value based on your experience and qualifications. If everyone else in your field has a master’s degree and you don’t, assume your salary base will be a little less. If you have a training certificate or you used to manage people, assume your standard salary should be a little higher. Search online to see how experience and unique qualifications influence the industry standard pay in your field.[3] You can use a salary tool, like PayScale or Salary.com to enter your experience and degrees and see how they should impact your market value. Figuring out how your salary is impacted by your experience and qualifications depends on a variety of factors. It also changes from industry to industry.
  3. Add or subtract insurance benefits from your salary to see what they’re worth. If you already have a job, figure out what you save (or spend) on insurance. If you don’t have a job yet, consider the value of the insurance attached to your offer. In most cases, getting insurance through your job will save you $200-600 a month. If you’re negotiating and your company doesn’t offer benefits, add 5-10% to whatever salary you’re going to ask for. A lot of your research is likely showing you salaries that come with benefits.[4]For example, if one company offers you $60,000 a year with insurance benefits but another company offers you $70,000 without benefits, the job with the benefits is probably a better deal.Dental insurance typically covers up to $1,000-2,000 a year in dental work. If they aren’t offering dental, point this out and ask for an additional $1,000-2,000 a year.[5]Some insurance benefits may not matter to you. For example, if your vision is fine and you’re never going to visit an optometrist, you may not care about vision insurance. If you wear glasses, you may deeply care about these benefits.
  4. Include the pension, retirement options, and 401k when assessing an offer. If a company has a matching 401k program, calculate how much you plan on saving a month. Add this number to your offer, since you’ll see the money eventually. If there are no retirement options or 401k matching contributions, add 5-10% to your base value when assessing an offer.[6]
    • For example, if a company matches up to $400 a month in contributions, they’re basically paying you an extra $4,800 a year—it just happens to be going to a retirement account.
    • If a company isn’t offering any retirement accounts, pension options, or 401k, point this out during negotiations. This is a good point to gesture toward when negotiating. You may say, “I understand you’re offering a competitive salary, but there are no retirement options. Is there any way we can explore a higher salary to compensate for this?”
  5. Adjust your target salary based on the location, company culture, and schedule.[7] If a company asks you to travel for work, you work at an inconvenient location, or your schedule is kind of tough, the job may not be worth it if they don’t offer you more money.Similarly, if you have flexible hours, an easy commute, and the company treats you well, it’s likely worth it for you to entertain offers that are a little under the industry standard. Take these personal elements and preferences into account when considering the pay you want.[8]If you’re moving, calculate the cost of a moving company, temporary housing, and airfare or travel. You can either ask your employer for a signing bonus, or ask them for a relocation package.[9]A job in San Francisco should be paying more than that same job in Wyoming. Make sure you take the cost of living and geography into account when assessing what you’re worth. Some of these elements are entirely a matter of personal preference. You may not care about your commute, company culture, or hours the same way other people do.For example, if you have an offer for $50,000 a year and you get to wake up later, stroll in whenever you want, and work from home five times a month, it may not be worth it to take that offer for $55,000 at another company. Maybe it would be worth it at $60,000. It’s entirely up to you.
  6. Practice asking for a raise with a friend so you don’t feel overwhelmed. Ask a friend to sit down with you and practice negotiating. Explain the position you’re applying for, and pretend like they’re your employer. Running through your pitch a few times is a great way to get used to the feeling of asking for more money. This will make the actual negotiation much less daunting and intimidating.[10]Treat this activity like a real simulation. Walk into the room, shake hands, and say, “I’d like to explore a higher starting salary with you…” or, “I’d like to discuss the possibility of a raise…” Let your friend counteroffer and walk through the conversation.Then, ask for feedback and do it 2-3 more times. You may feel awkward doing this, but it will really take the heat off when it comes time for the real negotiation.If possible, practice with a friend that holds a management position. They’ll be able to offer you feedback on how you can improve your body language, scripting, and negotiating tactics.

Getting a Higher Starting Salary

  1. Start the conversation after you’ve been given a job offer. If you start negotiating the salary before you’re offered a job, they may go with another candidate they think they can pay less. You may also seem a bit unprofessional if you do this.Wait for an active job offer to begin negotiating your salary. They may offer you more than you would be asking for anyway.[11]Avoid asking for a higher salary if the job offer explicitly mentions the salary being nonnegotiable. You can still negotiate vacation time and benefits, thoughYou hold an important bargaining chip once they offer you a job. They’ve shown that they think you’re the best candidate for the job! This is good leverage when negotiating because you already know they want you.
  2. Compare the salary they offer you to the data from your research. Once you get an offer, they’ll provide you with what they’d like to start you out at salary-wise. Compare the offer they give you to the industry standard. This will give you a sense for how much more you can ask for.[12]
    • If they offer you a salary and you’re happy with it, there’s nothing wrong with accepting it! Still, you may be able to get more even if you’re happy with the starting salary.
    • If their offer is below the industry standard, you have solid data to back up your argument for more money.
    • If their offer is above the industry standard and it’s more than you expect, it’s probably a sign that your research was a little off. Unless you’re applying for a unique position with no other candidates, it’s unlikely that they’re offering a lot just to convince you to say yes. It’s more likely that you’re worth more than you think.
  3. Ask for 5-10% more than what you actually want. Reply to the person that gave you the job offer. This will usually be a hiring manager, but it may be your future boss or someone at HR. Ask for 5-10% more than what you actually want.If they say yes, you’ll get more than you originally wanted. If they say no, you can compromise in the middle and come out looking reasonable while getting what you want.[13]Say something like, “I am excited about joining the team and I am grateful for the opportunity. After looking at the industry standards for the position, I hope we can explore a higher starting salary. I am hoping we can discuss a potential starting salary of $65,000 instead of $55,000.”If they’re already at the industry standard, emphasize your experience if you have any in the field. You may say something like, “Given my prior experience selling farming equipment to major companies, I believe that a starting salary of $75,000 is appropriate. Is there a way we could discuss this further?”Don’t demand anything. If you come off as demanding, rude, or inflexible, they may just retract the offer. Stay away from saying “I need,” “This is unacceptable,” or anything along those lines.Be careful about overreaching. If you ask for way more than the initial offer, your employer may assume you’re unreasonable and rescind the job offer.
  4. Prepare a pitch to justify your proposed salary based on your research. You are very likely to be asked a question like this after you ask for more money. If you are being offered less than the industry standard, make this your prime focus. You can also point towards your experience, background, or a unique perspective you have.[14]
    • You may say something like, “I believe my experience in the field is valuable enough to warrant a higher starting salary,” or, “I’m coming from a competitive company that operated in a more cutthroat market and I believe this experience is valuable.”
    • If they’re firm on their offer, don’t push it. Either accept it if you can live with the offer, or apply to another position.
    • Avoid talking about your personal expenses—they’re irrelevant to the duties and role you’re applying for.
    • Don’t talk about how hard you’ll work. A good employee will fulfill the requirements of the job in the time they’re given, so offering to work weekends or stay late isn’t particularly helpful.
  5. Wait for the counteroffer and accept it if you’re happy with it. In all likelihood, they’ll ask for a day or two to consider your request. When they come back, they’ll likely have a counteroffer. If you’re happy with their counteroffer and they land relatively close to what you were looking for, thank them and accept the offer.[15]
    • Don’t forget to thank the hiring manager. Say, “Thank you for getting back to me on this. I really appreciate you looking into it for me.”
    • If they say they can’t offer you what you’re asking, don’t fight it. Either accept the position or move on.
  6. Continue negotiating if you think they may budge. You can counter their offer with another counteroffer if you’d like. Choose a salary in between your initial request and their counteroffer to appear reasonable. If they won’t budge, accept their counteroffer or go elsewhere. You may need to repeat this process one more time to land on a salary you’re happy with.[16]
    • So long as the conversation remains professional and cordial, there’s nothing wrong with continuing to negotiate.
    • For example, if you asked for $18 an hour and they counteroffer with $16, you may say, “I understand that you don’t have a lot of room in the budget, but I’m really hoping we can land in the middle here. Would $17 an hour be possible? I appreciate you working with me on this.”
    • Try to be flexible. If you keep demanding more money when they’re already at (or past) the industry standard for the position, you may come off as unprofessional if you keep pushing for more money.
    • If you have multiple offers on the table, say something like, “I would much rather work here, but International Exports is offering $76,000 a year. Is there any way you can match this?”
  7. Ask for more benefits if they won’t budge on the pay. If the company won’t offer you a higher starting salary you may still be able to ask for more benefits. Insurance packages are usually fixed, but you can often ask for more PTO (paid time off), or flexibility in your schedule. If you’re relocating, you can ask for a stipend to cover your moving costs. If you’re travelling far for work, ask if they can partially cover your gas costs or get you a public transit card.[17]You may say, “I understand that you don’t have any room in the budget for a higher starting salary, but is there any way we can discuss the PTO package.Asking for benefits after you’ve been told that there’s no money available for a higher salary demonstrates that you’re flexible and open. This is a great way to appear sensible and make a good first impression while getting more out of a job offer.Insurance is typically fixed by whatever plan the company has purchased ahead of time, so they won’t be able to offer you more insurance options. You can try asking, but it may not be the best area to focus your energy.

Discussing a Raise

  1. Ask for more responsibilities and feedback 5-6 months in advance. If you can, find a way to take on more responsibilities at work a few months before you plan on asking for a raise. Ask your manager for feedback on how you’re doing and work to improve on anything they say you could improve upon.This will demonstrate that you’re capable of taking on more at work and you know how to take feedback.[18]For example, if you’re a software developer, ask your manager if you can work on a larger portion of a project. Say, “I’m hoping to take on a bigger role for this project. Do you think I could dedicate some time to working on the implementation and debugging after I’ve finished writing the code?”To ask for more feedback, say something like, “What do you think I could have done better in the last project?” Do your best to implement all of the feedback they give you.
  2. Broach the topic when it’s time for your performance review. If you have a performance review coming up, let them know you want to discuss compensation 2-3 weeks in advance. If you don’t have a scheduled performance review, ask your manager to sit down with you and discuss your performance. Bring the raise up at the end of the review and let your manager know what you’re looking to make.[19]You may say something like, “Given my performance at the company and the role I’ve been fulfilling, I’d like to discuss a potential raise at my next performance review.”At some companies, managers have absolutely nothing to do with pay. Still, it’s best to broach the subject with your manager.If your company isn’t doing well or your performance hasn’t been particularly stellar, they may just say “no.” If this happens, at least you tried! Continue working hard and try again in 6-12 months.Some companies have designated timelines for budget changes and pay raises. If this is how they do it in your company, wait a few weeks before the raise schedule to talk to HR.[20]
  3. Develop a pitch and ask for 5-10% more than what you want. Ask for a raise that’s higher than what you want. Either they give you a raise higher than you were originally looking for, or they’ll counteroffer with a raise that’s relatively close to what you’re actually looking for.You will be asked to justify this raise, so prepare a pitch ahead of time to justify your request.[21] Focus on your performance, consistency, and reliability at work. If you perform a unique function or you’ve been at the company a long time, these can be valuable talking points as well.You may say, “I completely understand that there’s no room for a raise, but what about more vacation days? I’ve proven that I can complete my work on time and it won’t cost anything, so is this something we can discuss?”If you travel frequently for work, you can ask for better accommodations or a higher travel stipend. You may say something like, “I have exceeded our target numbers for two consecutive quarters and I am yet to miss a client meeting. I’ve been consistent, reliable, and I have never received a customer complaint.”If it’s been a long time since your last raise, you can mention this as well. Don’t focus too heavily on this aspect, though.
  4. Continue negotiating or accept the raise based on what they offer.[22] If they come back with a raise offer and you’re happy with it, take it! If they’re a little under what you were expecting, feel free to counter their offer with a new raise request. Once you’re both happy with a reasonable raise, accept it and thank your manager or HR rep for their time.[23]If you’ve been offered a position at another company, you have leverage. You can say, “I’ve been offered $54,000 at Business Associates Incorporated, but I don’t want to leave if I don’t have to. Is there anyway you can match that?”If you aren’t given the raise but you know that you’re being paid less than the industry standard, it may simply be time to start looking for a new job.You may say, “I understand there are limitations based on the company’s budget, but I’m hoping we can meet in the middle here.” If the answer is still no, don’t forget to thank your manager or HR rep for their time. Say, “I appreciate you taking the time to look into it for me.”
  5. Ask for more vacation days or flexibility if they can’t offer a raise. Depending on the financial health of the company, they may simply not be able to offer you a raise. The good news is that your vacation days and schedule have nothing to do with their budget. If your company mentions monetary restrictions as a primary reason they can’t pay you more, ask for more vacation days, freedom to show up later or earlier in the work day, or the ability to work from home on occasion.[24]You may say, “I completely understand that there’s no room for a raise, but what about more vacation days? I’ve proven that I can complete my work on time and it won’t cost anything, so is this something we can discuss?”If you travel frequently for work, you can ask for better accommodations or a higher travel stipend.


Tips

  • Don’t ask for a raise if you’ve been at a company for less than 6 months. This just isn’t enough time to realistically demonstrate you value.
  • You can ask friends that have held similar positions what they made, but avoid asking your coworkers about their salaries. This is considered rude.

References

  1. ↑ [v161314_b01]. 27 March 2020.
  2. ↑ https://www.theguardian.com/careers/careers-blog/how-to-negotiate-pay-rise
  3. ↑ https://www.theguardian.com/careers/careers-blog/how-to-negotiate-pay-rise
  4. ↑ https://www.washingtonpost.com/news/get-there/wp/2015/05/06/always-negotiate-pay-even-on-your-first-job-out-of-college/
  5. ↑ https://www.moneyunder30.com/is-dental-insurance-worth-it
  6. ↑ https://www.uncp.edu/sites/default/files/2018-12/Job%20Offer%20Negotiation%20Workbook.pdf
  7. ↑ [v161314_b01]. 27 March 2020.
  8. ↑ https://www.washingtonpost.com/news/get-there/wp/2015/05/06/always-negotiate-pay-even-on-your-first-job-out-of-college/
  9. ↑ https://www.ama-assn.org/residents-students/transition-practice/relocation-bonus-after-residency-what-expect-what-ask
  10. ↑ https://www.nyit.edu/box/features/know_your_value_how_to_negotiate_salary#
  11. ↑ https://money.usnews.com/money/blogs/outside-voices-careers/2013/02/21/the-exact-words-to-use-when-negotiating-salary
  12. ↑ https://money.usnews.com/money/blogs/outside-voices-careers/2013/02/21/the-exact-words-to-use-when-negotiating-salary
  13. ↑ https://hbr.org/2017/07/10-myths-about-negotiating-your-first-salary
  14. ↑ https://www.washingtonpost.com/news/get-there/wp/2015/05/06/always-negotiate-pay-even-on-your-first-job-out-of-college/
  15. ↑ https://money.usnews.com/money/blogs/outside-voices-careers/2013/02/21/the-exact-words-to-use-when-negotiating-salary
  16. ↑ https://money.usnews.com/money/blogs/outside-voices-careers/2013/02/21/the-exact-words-to-use-when-negotiating-salary
  17. ↑ https://careerwise.minnstate.edu/jobs/benefittypes.html
  18. ↑ https://www.forbes.com/sites/elanagross/2016/06/27/8-managers-share-the-best-way-to-ask-for-a-raise-and-get-it/#ec49bb274ff2
  19. ↑ https://www.theguardian.com/careers/careers-blog/how-to-negotiate-pay-rise
  20. ↑ https://www.cnbc.com/2018/10/29/this-is-the-exact-right-time-to-ask-for-a-raise.html
  21. ↑ https://hbr.org/2017/07/10-myths-about-negotiating-your-first-salary
  22. ↑ [v161314_b01]. 27 March 2020.
  23. ↑ https://www.cnbc.com/2018/10/29/this-is-the-exact-right-time-to-ask-for-a-raise.html
  24. ↑ https://careerwise.minnstate.edu/jobs/benefittypes.html
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