By now you’ve probably heard that you should always negotiate your salary. You might have read a statistic about the total lifetime earnings you’re losing out on, or the importance of negotiating for women. The only problem is…how exactly do you go about? What should you say? When should you say it? How much do you ask for and when do you accept?
We’re going to dive into the nitty-gritty details, but before we do, it’s important to put your salary, and the job itself, into perspective. Yes, you should definitely negotiate, but remember that paychecks are just one aspect of the total job package.
When you search for a new job, your first priority should be a position that represent a true career move. A step forward, not a step to the side. Culture, fit, quality of life, relationships, and opportunities for growth are all part of the job’s package. Focus on these first, and when you’re ready to negotiate the salary, it will be a lot easier.
Do your research
The first step to successful salary negotiation is to pull together the key information you will need:
What is the normal salary range for the position you are applying to? There are plenty of websites like payscale.com and Glassdoor that can help you research the current market rates in your area. You can also ask for information from your educational institution, or other professionals in your field.
What is the company like? Is it a top private school in a major city or small school in a remote rural area? A hot start up, or an established multinational? Do they advertise a corporate culture with lots of perks, or offer a steady benefit package? All of this information will give you a sense of what to expect, and what you can ask for, when negotiating.
What are the living costs of the area? If you’re relocating, this will be key for determining your salary requirements and negotiating other perks like moving costs, transit passes or accommodation.
What opportunities are there for growth? This is probably the most important piece of information, besides the salary itself. If the company offers a clear career path with regular raises or performance bonuses, it may be worth it to accept a lower starting salary. Remember, you are looking at your total career trajectory, not just your first paycheck.
Decide on your minimum acceptable salary
Based on your research and where you are in your career, decide on the lowest amount that you would accept for your base salary. This number is an important tool for negotiations. If the employer offers a number lower than this, you have a target to aim for. If they can’t meet your number, it may be time to walk away from the table.
You should also consider your priorities in terms of benefits and other ad-ons. If you have young children for example, you might want to focus on flex-time, remote working options, or more vacation time.
Both you and the hiring manager are busy people. You don’t want to nitpick every part of the deal, and you certainly don’t want to go back on what you’ve already said. Know where your boundaries lie, and what is most important to you before the conversation even starts.
Don’t talk about money too early
In any salary negotiation, you want the employer to be the first to give a number. This gives you the ability to negotiate a higher salary while staying within the ballpark of what they are willing to pay. If you give a number first, there’s always a risk that your number is lower than what they were going to offer, or far higher.
The key to any question about either your past salary or current expectations is to avoid discussing numbers until the employer is ready to make a formal offer of employment. It you’re asked the dreaded salary question during an interview, there are a couple of ways you can reply:
- Ask for their number. “I’m sure you have a number that fits the requirements of the position and the pay scale of your company. I’d be interested in hearing it.”
- Delay. “I would like to wait until you’re sure I am the best candidate for the position. Until then, I think a salary discussion is premature.”
- Decline. “I would prefer not to disclose that information. I am confident that we will be able to work out a number that is acceptable to both of us, once you have made a formal offer.”
- Give them a range. “Based on my research, a typical salary for this position would fall between $50-70,000. I would be willing to discuss an offer in that range.”
Any of these responses should be enough to satisfy most interviewers. However, some companies may insist on a number, and some may even demand documentation of your previous salary. You will have to decide if that is acceptable in your field, and if the job is worth it to you.
Whatever you do, don’t lie about your past salary. It’s illegal, and you could be dismissed if the employer finds out.
Take your time
Once you’ve received an offer of employment, you might feel pressured to accept it quickly, or jump straight into negotiations. Take a deep breath. It is always acceptable to ask for a day to consider the offer.
If they have only given a verbal offer and you are uncertain about the details, you can also ask for a formal written offer outlining the salary and benefits.
Your Initial Counter Offer
You’ve reviewed the offer and you’re ready to negotiate. But how much should you ask for?
A good starting place is to ask for 10-20% more than the initial offer. This is why it’s so important to get the employer to give you a number first. With this rule, an offer of $50,000 becomes $55,000-$60,000. This is generally a reasonable increase, and the employer will also have some leeway to counter-offer.
If the employer offers you an amount beneath your minimum acceptable salary, then the game changes a bit. You are now trying to get their offer up to, or above, your minimum. Once again, you can use the 10-20% rule to help you out. If their offer is 20% or more below what you’re willing to accept, it might be best to tell simply tell them your minimum number. If their offer is only slightly lower, you can apply the 10%-20% rule and try to get a bit more.
For example, if your minimum acceptable salary is $50,000, and they offer $40,000 (20% below your minimum), you may wish to tell them that you cannot accept a number beneath $50,000. If however, they offer you $45,000, you could counter with $51,000-54,000, while still staying beneath a 20% increase.
Back and Forth
On a basic level, a negotiation is a matter of each side making offers, counter offers and concessions. But while the employer expects you to negotiate, you will still have to give reasons for your numbers.
Consider preparing some short statements that you can use to explain why you want a specific amount. Some of your reasons may include:
- Your research of the market
- Your experience and training
- The value you can give to the company
- A comparison with your previous position – for example if the job has more responsibility or requires more specialization than your last job.
Avoid discussing anything personal, like the cost of your rent or that loan you have to pay off. Focus instead on what you will do for the company and what you deserve based on your accomplishments and the market.
Negotiate the Full Package
Negotiation isn’t just about salary. Many hiring managers have a fixed amount that they can offer, but they might have more leeway with benefits. Improved flexibility, a better title, vacation time, remote working, and corporate discounts are all relatively inexpensive add-ons that can make a big difference in your quality of life.
One benefit you should always ask for is educational opportunities. This shows that you are serious about your profession and makes you more useful to the employer as well. This could take the form of paid tuition, training time, or a subscription to an online learning site.
Know when to accept and when to walk away
Part of being a strong negotiator is knowing when to walk away. Occasionally this may convince the employer to come back with a better offer, but never bet on it. Know your minimum requirements, and have the confidence in yourself and in your needs to walk away if they are not being met. If the salary is too low, it’s likely that the job doesn’t represent a true career move anyways.
At the same time, remember to look at the total job package, not just the money. No one wants an employee who only cares about their paycheck, and you probably won’t be successful if that’s your first and only priority. Aim for a job that represent a total career move, and the money will follow.