Negotiate a Salary

Whether you’ve just gotten a job offer or are looking for a pay bump, here’s the question: how do you get paid what you’re worth?

In salary negotiation, people often make the mistake of underestimating their leverage and power. That may be why 40% of Americans feel like they’re underpaid.

As negotiation expert Jessica Notini, JD, puts it, people forget about what they bring to the table and end up “almost [negotiating] against themselves when they're in a lower-status position.”

So how do you actually negotiate? We’ve put together a comprehensive guide to help you prepare and know exactly what to say. Read on to find out how to get the salary you deserve–and to learn why you might have more of a negotiation advantage than you think.

Steps

Negotiating Your Salary

1. Delay discussion of salary. If you are interviewing for a job, then postpone for as long as you can any discussion of salary. The key is to make sure that prospective employers fall in love with you before you begin to discuss money. If the employer asks you what your salary requirements are, try to re-direct the conversation. Say, “Before getting into that, I’d like to hear a little more about…”
   • You should certainly wait until you have a job offer before discussing salary. However, the employer may require that applicants put their required salary in a cover letter. If required to do so, then follow the directions. But be sure to list your preferred salary as a range, e.g., $40,000-50,000.
   • If you subsequently discover that the salary you listed on your cover letter is too low, then you can adjust it during the negotiations by stating that you didn’t realize the full job responsibilities when you wrote your cover letter. By saying this, you can give yourself a reason for increasing the amount you want.
2. Let the employer offer the first number. By following this strategy, you can avoid naming a number that is too low. If the employer asks you to give a number, you can counter in several ways:
   • ask what the typical range is for employees in this position at the company
   • ask how much has been budgeted for the position
   • say you’ll consider any reasonable offer
   • say that they have better information as to what would be a reasonable offer
3. Make a counter-offer. Once an initial offer is made, you should not accept it. Employers expect negotiation, so their initial offer typically includes some room for them to move up.
   • Instead of accepting the first offer, counter-offer by asking for your ideal amount. If your ideal is $48,000 but the initial offer is for $35,000, then ask for $48,000. The employer is not going to move up to $48,000 on his or her own. You need to be prepared to ask for it.
4. Justify your counter-offer. You can benefit by offering a few quick reasons why you think you are justified in asking for the salary. For example, you may have led your prior company to record growth in the previous year. You can say, “I appreciate the offer and am really excited to work for you. But given my drive and history of performance, I was expecting something in the $50,000 range.”
   • Also be direct. If you want more money, then say that. Do not try to convey that you want more money by talking about your expenses. For example, don’t state, “Well I just bought a new car, so my expenses are really high.” Instead, say, “I need more than that” or “I need a higher salary.”
5. Don’t make demands. You should negotiate with confidence, sure of your worth. If the employer cannot meet at least your minimum, then you should be willing to walk away. However, you do not need to boast of that fact or issue ultimatums.
   • Don’t say, “Forty thousand is my final offer!” Instead, say, “I need at least $40,000 to make switching jobs worthwhile.”
   • Always negotiate with professionalism and respect. Often, salary negotiations are initiated after an informal offer has been made but before a formal offer has been extended. You don’t want anything you do in the salary negotiations to cast doubt on the employer hiring you for the job.
6. Negotiate more than just salary. Remember that base pay is only one topic of negotiation. After you have taken care of it, move on to the following:
   • minimum severance pay
   • performance expectations
   • perquisites and benefits
   • the schedule for future salary increases
7. Do not take negotiations personally. To effectively negotiate, you need to mentally separate yourself from the process. Remember that you don’t know everything about the business’s financial health, so perhaps the company is constrained in what it can offer you. Also, companies are under pressure to reduce overhead, and salaries are a big part of expenses. A salary offer that is lowering than what you would hope for is not a judgment on you personally.
   • Always remember that negotiating a salary is a business transaction. You would not be terribly offended if someone offered you less than you wanted for vegetables that you grew in your garden or a craft that you made in your spare time. Similarly, don’t be offended if the employer is resistant to offering you the salary that you want.
8. Ask for time to consider a final offer. Once you receive a final offer, you should ask for a couple of days to review. You want the time to clear your mind and look at the offer objectively. Most employers should give you a few days to a week to consider the offer.
   • Even if your first instinct is to decline because the salary is too low, you should take the time to review the offer. Maybe an increase in benefits will help offset the low salary. Only by giving yourself time to review the whole offer can you make a sound decision as to whether to accept or reject the offer.
9. Get the offer in writing. Once you have agreed to a salary and a benefits package, ask for everything in writing. Your employer should have no problem memorializing the offer in writing.
   • If the employer does resist, then you should reconsider working for this company. It is standard business practice to reduce contract offers to writing.

Preparing to Negotiate

1. Research salaries. Before you can negotiate, you need to know how much people in comparable positions make. You can find this information in a variety of ways.
   • Talk with colleagues. Co-workers may be hesitant to talk about their salaries. Nevertheless, you can still ask. If you are negotiating a pay raise at your company, then your coworkers remain your best resource for finding out your company’s pay scale.
   • Research at Glassdoor or PayScale. Both of these website provide salary information for particular companies. You can find out what the average salary is for the position at your target company.
   • Research companies of comparable size. If no information exists about the company you are interviewing at, then you will want to find salary ranges for companies of comparable size in the same city or geographic area. You can also find this information on Glassdoor or PayScale. You may also want to do a general web search.
   • Look online if you are working for a government agency. Many states will post this information online. For example, you can view California’s state worker salary database by clicking here.
2. Decide on your salary range. Effective negotiation requires that you know two numbers: how much you would ideally get, and the least amount you would settle for. You negotiate with the first number in mind, and you walk away from the job (or stop negotiating) if the employer cannot meet the second number.
   • Don’t set the range too low. Research shows that women in particular tend to undervalue their worth. Instead, look at the salary ranges already offered in the field and location and consider what unique skills or experiences you can bring to the company that will increase your worth.
   • Also think through any trade-offs that you might settle for. For example, you might be willing to accept a slightly lower salary for increased vacation time or personal days.
3. List reasons why you deserve the salary you want. Effective negotiation involves more than simply spouting out a number to someone across the table. You also want to give a few short reasons why you think that you are worth the amount that you are asking for. You should come up with your reasons ahead of time.
4. Prepare for different types of negotiators. There are a couple different kinds of negotiators. One is hard-style and likely to say, “No.” The other type is a “soft-style” negotiator who comes across as agreeable. You need to prepare for both, because both present different challenges as you negotiate.
   • To negotiate effectively with the hard-style negotiator, you have to be in the right frame of mind. Do not get rattled by an assertive “No.” Instead, be prepared to justify the amount that you are asking for. You must also maintain a positive attitude, even in the face of resistance.
   • To negotiate effectively with a “soft-style” negotiator, you must focus on not trying to get the negotiator to like you. Instead, you must approach the negotiation as a bargaining opportunity. Soft-style negotiators can be problematic especially when you already know the negotiator—for example, she may already be your boss and you are negotiating a raise. You need to stop worrying that you might harm the relationship and instead focus on getting a salary you deserve.
   • In some cases, you may be asked by email to send an indication of your desired salary amount. This removes the face-to-face negotiation but can be just as difficult to know how to respond appropriately, so check out How to Answer Expected Salary in an Email for some guidance.
5. Practice. If you don’t like to negotiate, then you should practice various scenarios before speaking to the employer. One way to practice is to look in a mirror and state out loud what your ideal salary is and why you think you are worth it. Imagine the employer saying “No” and practice your counter-offer.
   • You can also enlist the help of a friend. He or she can pretend to be the boss. Work out different scenarios. For example, have the friend be a firm negotiator, saying “No” repeatedly, so that you can become accustomed to hearing that kind of resistance. Then alternate, and have the friend be open to negotiation.
   • Focus on keeping your enthusiasm up during the process, which is critical for your success in negotiations.

Tips

• Don’t lie about how much you made in a prior job. Employers can easily find this information out, and any misrepresentation during the interview process is grounds to rescind the offer.

Warnings

• Pay attention to whether or not you are making market rate in your current job. If you aren’t, then your prospective employer may want to know why you are paid below market. Have a couple reasons on hand. For example, you might work at a new company that isn’t established yet, or you took the first job you could get because you moved with a spouse to a new area.

Quick Summary

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