Whether we’re starting a new job or gunning for a promotion at our current one, we all know that we should be negotiating the salary. Or do we? A survey by Salary.com revealed that only 37% of people always negotiate their salaries—while an astonishing 18% never do. Even worse, 44% of respondents claim to have never brought up the subject of a raise during their performance reviews.
The biggest reason for not asking for more? Fear. And we get it: Salary negotiation can be scary. But what’s even scarier is not doing it.
Here’s a good example: A famous study done by Linda Babcock for her book Women Don’t Ask revealed that only about 7% of women attempted to negotiate their first salary, while 57% of men did. Of those people who negotiated, they were able to increase their salary by over 7%. That may not sound like much, but as Stanford negotiation professor Margaret A. Neale puts it: If you get a $100,000 salary and your co-worker negotiates up to $107,000, assuming you’re treated identically from then on, with the same raises and promotions, you’d have to work eight years longer to be as wealthy as them at retirement. So, whether you’re male or female, in your first job or your fifth, it’s time to learn how to negotiate. And we’re here to help, with a roundup of expert tips and further reading to get you totally prepped.
Negotiation is a two-way street
You might think you’re the only one negotiating, but the truth is that everyone has to think about money—what’s the most they can take home before they start getting into debt? And everyone has an opinion about how much money they should get. So it pays to listen up. Whether it’s the hiring manager or a prospective employee, if you don’t know the answer to this question, get on it. No one is expecting you to have all the answers on your first day, but in an interview, you should have all the answers you need to convince a company to give you the job. From asking for a significant signing bonus to talking about other perks you’ll receive—like 401(k) match—you have to tell the company why it’s worth making you an offer.
Ask for a raise, not a salary
It’s vital to remember that you’re not trying to negotiate a salary. Instead, you’re focusing on getting a raise. Start the conversation with a question like: “I’d like to make X more per hour and a similar level of growth than the last few years. Do you think I can make that happen?” That’s a pretty safe question, and your target will immediately feel more motivated to help you. Skip the big numbers Instead of asking for a $100,000 salary, the smart move is to ask for $75,000. The reason for this is that your first raise will typically be lower than your last one, and you should actually be aiming to get a raise the next time around—not just hope for one. If the numbers seem too far off, consider asking for a reasonable increase, such as 5% or 10%, instead.
Back up your points with data
Sometimes the single biggest thing holding people back from negotiating is that they think they won’t be able to back up their points with statistics. If you’re nervous about what you’ll need, let’s start with one fact that should put your mind at ease: If you’re making more than a quarter of what the CEO of your company makes, you’re making a good salary—a lot better than the national average, to be sure, but nowhere near as well off as CEOs. Researchers at Columbia University, San Francisco State University and the University of Michigan asked more than 1,700 people to evaluate the performance of 340 CEOs and then asked what they’d think of those CEOs if their compensation were $1,000,000 a year higher than the highest possible.
Know your market worth
First things first: Know what market value you’re bringing to the table. That means getting a handle on what you’re doing and who you’re doing it for, and using that to figure out how to go above and beyond. Alison Green, HR professional and author of “ Ask For It: How Women Can Use the Power of Negotiation to Get What They Want ” and “ How to Negotiate Your Salary: 8 Proven Steps to Your Equal Pay Day ”, notes that employers who recognize that they have employees who are passionate and dedicated will be more receptive to “ask[ing] for a little bit more.” You could easily give a presentation to show your employers why you’re valuable. Use your strengths and your expertise, and don’t limit yourself to your title.
Know when to hold back
Negotiating salary is a delicate dance, and your goal should be to set a figure that is as close to what you’re worth as possible. But there are certain situations in which it’s best not to pull the trigger and ask for more. One way to approach negotiation is to “bargain the first number to a number you’re willing to settle on,” says Todd Ashley, a personal finance consultant. “This isn’t just about getting the minimum salary you want, either. This is about getting a salary that you’ll be happy with for your entire career.” In other words, if you’re not sure what you’re worth in the first place, it’s time to find out—but don’t ask for something you won’t be satisfied with forever.
Know when to ask
The first step to negotiating a raise or promotion is knowing when it’s appropriate. If your boss offered you a promotion or raise earlier this year, it’s unlikely she’ll do it again soon—but she will be inclined to do so in the future if you put forth good performance. You don’t have to know what your performance measures are for your boss to know when you’ve earned one. You just need to ask for it. If you want your boss to give you a raise, you can figure this out simply by asking for an increase in the numbers that are listed in your performance review. If you’re only getting a small raise because you’re a “good enough” employee, it’s time to raise your performance if you want a bigger raise. Also keep in mind that you don’t need an extensive career track to ask for a raise.
Negotiation is never personal
It sounds so basic, but it’s a big piece of the negotiating puzzle, and one that’s often overlooked by all the “I’m an independent contractor! I deserve this!” chatter. “People make things more personal when they have something to gain,” says Liz Diller, an etiquette expert and professor at Pace University. If you’re a consultant looking for a pay raise at your current job, then “asking for $5,000 a month instead of $3,000 is neither personal nor worth the aggravation,” she says. “The same holds true for asking for a promotion when you’re already being offered it.
How to ask
Of course, there are no surefire strategies for negotiating better salaries. No one strategy is going to work for everyone and every situation. But there are a few steps you can take to put yourself in a better negotiating position: Step 1: Find out what you’re worth. “Most job candidates don’t know what their current salaries are, but they do know what they expect to earn at their current jobs,” says career coach Karen Maezen Miller. So, find out now. You can do a quick Google search to find out your salary history, or you can use this list of common job titles to identify your equivalent salary based on your job title and role. Or, you can use sites like Glassdoor to see what the average salary is in your field.
Conclusion
Negotiating salaries can be scary, and sometimes, you need to save up and take a lower salary so you can get the company’s benefits package and an ongoing 401k plan for when you do negotiate. However, there’s no question that people are doing it less and less—even though studies show we know we should. If you want to stay relevant in your industry, you should ask for more. Get to work on that.
P.S. More than a few people have noted that, despite what some may believe, it’s not only female leaders who dole out salaries to their employees. Do yourself a favor: Do not assume that if a man is the boss, his employee will be offered the same pay as she would be offered if she was a woman.
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