How to Negotiate Salary for Your Next Job
At Nelson, it’s our goal to make sure people are prepared, connected, and successful when taking the next step in their careers. To help do that, we provide interview tips, resume resources, and job search strategies to help people like you find dream jobs.
In this post, we explore one of the more sensitive topics that will be addressed during the job search process: salary negotiation. Many job seekers have questions about how to negotiate salary or when to even bring up the topic of compensation.
Why Negotiate Your Salary
Understanding the future impact of current salary negotiations is important. While a difference of a few thousand dollars may not seem like much, it can be significant because your future raises and pay rates may be based on your starting salary.
For example, let’s imagine you’re a 22-year-old entry-level accountant. Let’s also imagine you accept an associate accountant position making $50,000 and work consistently until you retire at age 65, receiving average yearly raises of 4%. If you had negotiated your starting annual accounting salary to $55,000 – just $5,000 higher – you would’ve made about $577,000 more over the course of your career than if you had accepted your original starting salary offer of $50,000.
Many people don’t understand this significance. According to recent research, only 37% of candidates consistently negotiate salary offers, and as many as 18% never do. If you break down those numbers by gender, it’s even more revealing. A university study concluded that only 7% of female MBA grads negotiated their salary offer while 57% of male grads did. That’s a whopping disparity! Though this gender gap has been reportedly closing in more recent years, a recent study found that men are three times as likely as women to succeed at getting more money when negotiating salary. However, the payoff of negotiating your salary can be huge; 75% of those who asked for a higher wage received some sort of increase.
Even for the most outgoing and confident people, negotiating a salary offer for a potential new job can feel overwhelming. Discussing earnings is uncomfortable and requires careful preparation; you want to secure a competitive offer but you don’t want to offend the hiring manager or appear too aggressive. Read on to learn more about the best ways to negotiate salary.
Tips for Negotiating Your Salary
Avoid Discussing Salary Specifics (Including Salary History) Until an Offer is Made
In most situations, you should avoid debating salary or compensation during the job interview process. But even if you don’t bring it up, the interviewer sometimes broaches the subject.
If you are asked a question about your salary expectations or requirements in an interview, try to politely deflect it by saying that your specific salary requirements would depend on the total compensation package offered and the specific role details, like supervisory responsibilities, that you may not yet have discussed in the interview process, if appropriate). It’s always ok to share that you expect a salary that is competitive with what others are paying for your level of experience and education.
If you are asked how much you currently make, let the interviewer know that you’d prefer to discuss compensation in relation to the potential new role and company. Feel free to point out differences between your current role and the one you’re interviewing for, especially if the new role would be a step up in responsibilities or position title. Don’t feel pressured to disclose your current salary if you don’t believe it will support your salary negotiation process.
Do Your Salary Research
Before you negotiate, do your research. It will help you feel more comfortable and confident in what you’re asking for and prevent fear and anxiety from standing in the way of negotiating what you deserve.
For most careers, salary information used to be a black hole. It was hard to know who was paid what. Thanks to websites like salary.com, payscale.com, and glassdoor.com, you can determine what someone with your education and experience can expect to make in a similar position, company, and location. These sites have brought transparency to compensation, so there’s really no excuse for not having at least a general idea of expected compensation for a position.
Have a Backup Plan When Negotiating Your Salary Offer
If you’ve done your research, should have a specific number in mind and evidence to back that number up. Before you make a counter offer with that number and evidence, have a plan B in case the counter offer is not accepted. Deciding ahead of time whether you want to make another counter offer or walk away will give you an edge in negotiations.
Be Realistic in Your Expectations
Although most employers expect you to negotiate your salary, you may not make the best impression if you’re asking for an increase that seems unreasonable. Asking for 5 to 10% more might be a good starting point. However, if you’re going to ask for 35% more, then you’d better have good reasons to support your request.
Don’t Be Afraid to Brag a Little
Though we’re all taught that it’s impolite to brag, negotiating salary offers is a time when it’s okay to chat about your recent accomplishments. What exactly do you bring to the table? How have you helped other companies generate revenue or reduce operating costs, and how will you translate that experience to this new role? Summarize the achievements you covered in your interview, or bring up new ones you didn’t yet have the chance to address.
By filing away your achievements for times like these, you can be ready to answer the question, “Why should we give you more than our offer?” Don’t assume that the person you’re talking to implicitly knows why you should be paid more.
Consider the Whole Compensation Package and Ask for Other Types of Increases
In addition to salary numbers, think of the total compensation package. Make sure you understand the benefits plan options, including out-of-pocket expenses for things like health insurance. If the hiring manager doesn’t point them out, ask about expected bonuses or retirement savings matches.
Not only will this help you understand how much of your salary will need to go to benefits, it will also help you understand what additional compensation package items may be negotiable. If you don’t know if something is negotiable, ask if it is! Negotiations don’t have to stop at salary; you may be able to negotiate time off, working remotely, bringing a pet to work, or performance-based bonuses (especially if you’re in a sales position).
How to Negotiate Your Salary? Practice, Practice, Practice.
From books to blogs, there’s a lot of advice on how to negotiate your salary. Provided that your request is reasonable – and that you’re asking politely – asking for more money in a job offer is just part of the whole hiring process. However, striking a balance between asking to be paid what you’re worth and not sounding greedy can be difficult and must be done tactfully.
After you’ve done your research, practice with a friend to sound polished, composed, and confident. Remember that negotiating your salary is less about using the right phrasing or tactics and more about being brave enough to ask for what you need. So instead of seeing the negotiations as some elaborate shell game with stare downs and face offs, look at them as just another part of the job search.
Work With a Recruiter
If you’re working with a hiring agency or recruiter, you can be more candid and direct when negotiating your salary. Always be open with your recruiter about your salary requirements. It’s possible they may be able to negotiate a better deal for you, but they don’t want to waste your or their clients’ time sending you out on interviews for positions that don’t match your salary expectations.
If you are working with a recruiter, that recruiter is usually responsible for negotiating on your behalf and will handle the discussion of salary and compensation with the hiring company. Reach out to a recruiter to take some pressure off your job search and ensure salary negotiations for your next position result in an increase.
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