Whether you are a tenured employee or a new hire, it is critical that you prepare for salary negotiations. Although most people dread this aspect of looking for a new job and performance reviews, understanding how to negotiate your own worth is a valuable professional skill that can help you leverage your career goals and earning potential.
Understanding how to negotiate your own worth is a valuable professional skill that can help you leverage your career goals and earning potential. @celiathewriter #SmartTalkHR @RiseSmart https://bit.ly/32YFJAA
Learning the best practices for salary negotiation should happen well before you need to use the skill. Before interviewing for a new role or attending a performance review, be prepared for salary negotiations to avoid getting tripped up or feeling unprepared. And as with most things, practice will help you hone your skills.
When helping individuals during career transitions or career development, RiseSmart career coaches follow a simple three-step formula: appreciation, evaluation and negotiation. Here’s what is looks like.
Step One: Showing appreciation and confidence:
Always set a positive tone by expressing appreciation for the offer and the company. If you have points to negotiate, gratitude and an upbeat attitude breeds goodwill and can help as the framework for the conversation.
Start by stating your appreciation for the offer and your excitement for the opportunity. For example, you might say, “I appreciate the offer and am excited at the prospect of working for your organization. I'd like to take some time to review the offer. When can I get back to you?"
Once you’re in this stage, it’s important to remember that you and the employer already invested time into the process so it is integral to thank them for consideration and share reasons why the job excites you: mission, vision, culture, product, service, etc.
Appreciation is also important in this step for future planning. If you don’t reach an agreement, you decline the offer or they decide to move forward without you – you have already set the stage for professionalism and having a friendly, polite attitude which can draw them back to consider you for future opportunities.
The confidence piece is something that you absolutely need when delivering negotiations. You are selling yourself and your “brand” on how much value you can bring to them, how unique you are, why you are better than your competition. You must know your Professional Value Proposition and believe in it.
If the employer offer is below your value you need to be confident in your decision to negotiate a better salary. You can calculate your value by researching several elements that impact compensation including:
- Career level
- Industry experience
- Transferable and hands-on skills
- Geographic location
- Professional Development: licenses and certifications
- Associations and subsequent contacts
By writing down and practicing these influential factors, you will become more firm, persuasive and serious in justifying your demands.
Step two: Evaluate your offer
Once you have an offer, it is time to do your homework and identify your worth; while evaluating your negotiation strategy.
Rate and understand your compensation values by researching the marketplace. Your worth is what the market will realistically pay for your background and skills, regardless of what you were paid previously.
This type of data can support you and provide you a good baseline in understanding the market value of the job and how much someone will pay to get it done optimally. What is the company willing to give?
You can perform this type of research on sites like glassdoor.com, salary.com, indeed.com and even by doing Google searches: “Job title + Salary + Geographic location”.
To define this number, conduct research:
- Talk to Recruiters: Use prior and new relationships with staffing agencies to have conversations about the average salary or 'going rate' for someone with your experience and education.
- Conduct Online Research: Research salary averages using these resources: Glassdoor.com, Salary.com, Payscale.com and Indeed.com/salary.
- Schedule Informational Interviews: Connect with people who hold similar positions to the one you are looking for (title, geography and company type). Ask them what they think is a fair salary range. Do not ask what their salary is, but rather for their opinion.
- Assess Your Uniqueness: If you have a very unique skill set, extensive industry contacts, or an unblemished record of being a top-performer, you may be able to achieve the higher end of the salary range.
- Know Your Bottom Line: It is important to know the lowest possible number you would accept for the type of position you are targeting. Creating a cash flow chart of incoming and outgoing expenses can help identify this number and allow you to negotiate more effectively and also know when to turn down an offer that doesn't meet your needs.
In outplacement, we use the term “becoming whole again” which refers to impacted employees finding a new role with a salary that is comparable to what they were making at their last role, before the layoff. In many cases, the impacted employee was earning market rate for the role they were performing. However, there is a great possibility that an individual has not kept up with the market rate. In these cases, program participants often land roles with a higher salary. Whether you’re already making market rate, or if you feel you’re a bit underpaid for the job that you’re doing, the concepts of “Value, Research and Market” can be used to make a compelling, factual case to the employer for better compensation.
Evaluate for fit
As you move through your job search, you evaluate the market as well as your strengths, skills and interests to determine your best job fit and expected compensation. Now it’s time to evaluate whether this job meets your career goals or is a stepping stone to that goal.
During this phase, you can do market research or also speak with an insider at the target company. The questions you’re considering at this point could center around:
- What impact can I make in this job? Does this job utilize my key skills and talents and engage my passions?
- What is the national average salary for the position?
- How much do comparable organizations in the same geographic location pay employees for this type of position?
- What learning and development opportunities does the job provide?
- What are the possibilities for advancement?
- What is the average salary in my geographic location and in cities nearby? Are the salary and benefits in line with or higher than my expectations and requirements?
- How will I fit with this culture: pace, process, work environment (hierarchical, collaborative, competitive, remote, virtual, slow-moving, face-paced, casual, reserved, etc.)?
- How well will I fit in with my key stakeholders: director, manager, team, reports and clients?
- Is this company stable or growing? (review financial reports for revenue and profits)
- Will this job increase my marketability in the industry – will I develop stronger skills, gain additional credentials and/or enhance my network?
Online research and networking can help you answer some of the questions, but a hiring manager can answer the rest regarding responsibilities, authority, performance measurements, compensation, advancement and learning and development opportunities.
This type of non-financial option completely depends on the individual and their work/life priorities.
Get ready to negotiate
As you move to the third step of salary negotiations, clarify your priorities by understanding your preferences. Identify things you would be willing to sacrifice if necessary.
It’s not only money that drives people to accept an offer. Sometimes it’s non-monetary perks! Any aspect of the job or compensation can be negotiated. Sometimes a hiring manager or recruiter might have their hands tied on the salary but have flexibility elsewhere.
Any aspect of the job or compensation can be negotiated. Sometimes a hiring manager or recruiter might have their hands tied on the salary but have flexibility elsewhere. @celiathewriter #SmartTalkHR @RiseSmart https://bit.ly/32YFJAA
I love to tell the story of how a participant of mine once could not negotiate a higher salary so he started thinking outside the box to make the offer and position more worthwhile for himself. Through preparation and practice, he was able to successfully negotiate every Friday off for the entire summer! For him, this was a great arrangement as he had a family and was able to have a 3-day weekend every single week for all of July and August to spend time with them and go on trips and not worry about working a slow Friday and the traffic coming home before the weekend. That deal overshadowed getting more money per year in salary.
A great plan of action is to go into negotiations with three to five key priorities. Now is the time to effectively develop your counter offer and have the conversation. Focus on how you can add more financial benefit than you cost and be able to concretely explain your worth with data, not your emotional connection to your previous salary or perceived worth.
Also advised: avoid countering an offer more than once and only submit your counter all at one time; decide exactly where you want to negotiate and make the first time count!
Step three: Negotiate skillfully
It is always best to negotiate your salary in person or on the phone as opposed to using email. Secure a date, time and method of response with the company representative, keeping in mind it is perfectly acceptable to require a few days for review. As you develop your strategy, keep in mind your negotiation has to be a win-win. The employer has to see the benefit to them in compromising just as you want to get the best possible offer.
Some negotiation tips: