Did you get a new job this year? One important aspect of starting a new position is negotiating the salary. Sometimes, we are so excited to be offered a job, that we will say yes to any salary offer we are given. In a healthy job market, doing so might hurt your earning potential, both in the short term and in the long run. Instead, you should negotiate. Gary with Financial Fives has some great insight on why you should negotiate your salary, and how to go into negotiations prepared.
How to Negotiate Your Salary
Timing is Important
You have the most leverage to negotiate a higher salary in the time between when an offer is made and accepted. The company has made an investment in time and money in recruiting you (especially if they had to fly you out) so know they are interested. Sure, there are countless ways to save money, but getting a raise is one of the few ways to make a lasting and considerable bump in your income.
So, now that you know when to open negotiations, Here are five tips on how to get the biggest boost in a starting salary in a professional manner.
1) Know What You’re Worth
You need to know what others are getting paid in this position with relevant experience and qualifications. Ask around, check online at sites such as salary.com, and know the range. Know if they pay more for certain designations, licenses, certifications or other experience that makes you more valuable to that specific company. There is nothing worse than accepting a position out of excitement, only to find out later most others in your position are earning more simply because they asked for a higher salary or know the right people! Another thing to note is if you live in a higher cost of living area, or the company is asking you to relocate for work (which they should always pay for), use a cost of living calculator. You can generally ask for a COLA, or cost of living adjustment, to compensate for a higher cost of living area.
2) Prepare a Counteroffer
Have you ever been jealous when an ex wound up with someone else, especially if that someone else was a rival? Well this is like that on a less dramatic scale (hopefully). When you’ve got other options, you’ve got more leverage to negotiate, because the recruiters are now in a position where they have to win you over from another company. Try to know the hiring timelines of the companies with whom you are interviewing ahead of schedule so when your prospective employer makes an offer, the others make them around the same time.
3) Set Yourself Apart
Even though you meet the job qualifications, point out what you have done in previous roles that set you apart. Perhaps you have a Masters’s degree, a certain designation, or certificate. Always have specific examples and statistics of successes you have had in the responsibilities the role asks for. Also, anticipate the questions you will face. Research these online, on forums, or on alumni job boards. Be sure to know about the company’s values, why people work there, and other notable facts. Roleplay your interview or practice in the mirror. Just as you want to brag about yourself, you also want to impress the interviewer regarding what it is about that company that compels you to work for them.
4) Show Them how You will Add to Their Bottom Line
No one wants to hear an entitled person list why they deserve more money, but when you position it in such a way that you will make the company money or reduce expenses, well, now, you’ve got their attention. You can demonstrate what you will do that will add value and ask for a commensurate increase. For example, if in your last job you lead a project to increase the efficiency of an HR process or created an imperative software program used by the travel and events department, talk about how much this saved the company in money, improved productivity, reduced overtime or eliminating the need to hire an outside vendor to troubleshoot the problem. This is real money that can be in your pocket instead of some miscellaneous expense account.
5) Give Up other Perks
If you plan to bike to work, ask them to waive the parking/public transit stipend. Tell them you don’t want the wellness reimbursements if you work out at the gym in your apartment complex, or if you have other options. Do you have insurance through a parent or spouse? No reason to for benefits that are being duplicated through other methods. Tell your recruiter or HR liaison that these benefits are appreciated but you would rather see it translate to a higher salary. Further, before you are hired, consider asking for an annual benefits summary. Those packets usually contain information that will help you discern which voluntary benefits you want to take advantage of and which ones you can waive. That, in turn, can also increase your take-home pay without any negotiation.
Negotiate Your Salary and Start Earning More!
So, there you have it! There are a number of ways that you can negotiate a higher salary, and some methods work better than others depending on what kind of company you are working for. Use your best judgment, ask around, and be kind. No one likes an entitled, vaguely created pitch for more pay. These days, there is so much transparency on pay and information readily available online, so creating a professional, concise, and polite pitch on why higher pay is warranted, you would be surprised at how you can increase your take-home pay. Start documenting your contributions now in your current role, so if you jump ship or have another review, you can be ready with tangible, revenue-related accomplishments that will build your case for a raise.
One last thing to note, before you go into an annual review, ask your colleagues who have already had their review if they were successful in securing a raise. The last thing you want to hear is “It’s just not in the budget this year” and leave empty-handed. If that still fails, revert to bullet # 5 to increase your take-home pay as much as you can, and start your job search. You can only save so much, however, earning more is virtually uncapped. Just remember the saying “Ask, and you shall receive!” What’s there to lose?