10 Ways to Win a Salary Negotiation
Do you want 8% raises twice a year, instead of 3% raises once a year?
The war for candidates has never been stronger, unemployment stands at 3.7 % — a ten year low — but many candidates, a recent survey found, are fearful of negotiation a job offer. Avoiding salary negotiation can cost employees $750,000+ in lost income throughout their career.
Here is a breakdown of what you can do before, during and after salary negotiations to win the salary you deserve.
How to Prepare for a Salary Negotiation
- Learn How Employers Negotiate Salary – Learn employers negotiation tactics. Know how they evaluate salaries to present what’s important to them. Know company details such as competitors and industry trends. Read their annual company reports, including mission statement, to define how you help the company succeed.
Know your market value by researching the average salary range for candidates with similar experience and skills in your local market. Be familiar with their cost to replace you. The average cost to recruit, hire and onboard new employees is 20% of the employees annual salary.
- Know Your Minimum Acceptable Salary – Know the ideal salary you are willing to accept before starting negotiation before you begin negotiating. To gain leverage, state a range, not a specific number. When creating the range, use the low end of the range as the high salary you want. This will allow them to start the negotiations at the number you are satisfied with. For example, if your ideal salary is $90,000, tell the recruiter your salary range is $90,000 to $110,000.
Also, do not share your current salary. Often a recruiter will ask what you currently make in a phone interview. Again, this is used as a screening question to eliminate candidates or to form your new salary based on your previous salary. While most people give this information freely, as a former recruiter, I would caution you against it giving it up at all. Stick to a range that you want your new salary to be if the question comes up.
How to Win During a Salary Negotiation
- Be Ready to Negotiate Benefits – According to Bankrate, the average value of a benefits package can add up to 30% of your total compensation. For example, if your salary is $80,000, your benefits package can add an additional $24,000, marking your total value of your compensation $104,000. Know how to negotiate benefits, such as working from home, and be ready to request them. Benefits can act as a strategic bargaining tool.
Pro Tip: If you requesting work from home, companies will often cover expenses such as internet and phone, make sure to ask.
- Proving Your Value: Who doesn’t love a good story? Learn how to craft your story to give the greatest impact. What makes you amazing? Use specific examples of how you added value. Be sure to include measurable metrics to prove success. How did you get involved in this role or industry? Why is it meaningful to you? Sharing why you are passionate about the role can help your personality shine.
- Leverage Multiple Offers for Higher Salary – You’re in demand, make sure the recruiter is aware you’re considering multiple offers. After investing in a costly interview process, recruiters now want to close the deal. By politely sharing that you are considering multiple offers, recruiters become more willing to work with your requests. Check out these salary negotiation email scripts for responding to salary offers.
- Pick the Right Time to Negotiate Salary – Know the best times to discuss salary, such as your annual performance review, to give you added leverage. For new job offers, wait until the end of the interview process to discuss compensation and do not share numbers up front. Sharing numbers too early can put you at a disadvantage as the recruiter can calculate their offer regardless of the other facts.
Pro Tip: If the company can not give you what you want today, ask if you can revisit the discussion in the future. “No” simply means they can not offer it today. Request to revisit the offer in six months, with the expectation that your performance will prove your value. Don’t forget to add specific and measurable metrics to track. Also, get them in writing.
- Prepare a Script to Counter Objections – You will get objections, be ready. Being prepared for objections will help you keep your eye on the prize and be politely persistent. Write a list of potential objections and answers you will expect to address. Being prepared will help you navigate objections, but also will give you confidence to present you case, increasing your ability to get the salary you want.
Pro Tip: Create a bank of email templates you can use for different situations. Here is a list of Top 10 Email Scripts for Salary Negotiation.
- Know Your Rights – Spotting illegal tactics that the company may try to use to gain leverage is critical. Know which states ban salary history questions before your negotiation to be able to identify foul play, such as arrest record and social drinking habits.
Here is a list of nine questions that are illegal to ask.
- Have you ever been arrested?
- Is English your native language?
- Are you a US citizen?
- Are you planning on having children?
- Have you ever been injured on the job?
- How many sick days did you take last year?
- Why were you discharged from the military?
- Do you like to drink socially?
- When is the last time you used illegal drugs? (But not: Do you currently use illegal drugs?)
What to Do After a Salary Negotiation
- Take Control – According to Forbes, candidates that stay in the same job more than two years earn 50% LESS than candidates that take the leap to a new position. It can be daunting to find new opportunities and go through interview process, but those that do are rewarded with higher earnings over the course of their career. Bottom line: it pays to take control of your career. Evaluate your opportunities and plan your career path to grow professionally and personally. Your wallet will thank you.
- Be Prepared to Walk – You gain a strong advantage if the recruiter risks losing their star candidate. They’ve invested time and money in the hiring process to find you. Gently and politely let them know which points that are important to you and are not negotiable.