The lifetime cost for avoiding salary negotiations is about one million dollars. That’s a lot of money to leave on the table. Most people avoid salary negotiations because they simply don’t know how to ask for the money they deserve.
This is one of the most common struggles I see with my career coaching clients. Most of us were not raised talking about money, instead the subject was often a tabu. We were told it’s impolite to ask how much money someone makes – and it is. But it’s not impolite to talk about how much money you should be making at your job.
You need to learn a salary negotiation strategy whether you’re interviewing for a job or asking for a raise. One study described five types of negotiation strategies: collaborating, competing, accommodating, compromising, and avoiding. Those that negotiated their salary increased their starting wage by an average of $5,000. The competitive strategy was more effective than collaboration; however, those that used collaboration strategies were happier with the results. Compromising and accommodating strategies did not result in higher salaries, and of course, avoiding did not either. This study shows the importance of assertively negotiating your salary.
Here are three effective salary negotiation strategies.
- Know your worth before you begin.
All too often, when we finally get the nerve to ask for a raise or talk about salary during an interview, we just want to dive in and get it done and over with. Slow down. Do your research. It could be worth thousands of dollars. Use internet resources like Glassdoor or professional organizations to find out what people are making with similar job responsibilities. Ask colleagues for insight on salaries. Your goal is to uncover what you should be making for the job you are doing – not your job title. For example, a manager’s salary will range dramatically depending on where they work, what they do, and what region of the US they live and work in.
- Select your timing carefully.
If you’re interviewing for a new position, wait until at least the second interview before talking about salary. It’s OK to find out if the salary is within the ballpark of something you can live with after the first interview, but this should be done tactfully. If you’re using a headhunter, they should be able to give you a reasonable salary expectation. If not, contact human resources. Avoid getting into a salary negotiation. You’re simply trying to establish that the salary is within a range you can live with should be offered the job. You’ll further negotiate later.
If, on the other hand, you’re employed, you’ll still want to carefully select your timing. Aside from choosing the best day and time of day (hint: earlier in the week and mid-morning), you will also want to choose the best time based on how long you’ve worked for the company. If you’re within your first 90-days, wait until your first review. If you find the job you’re doing is significantly different than what you were hired to do, it’s appropriate to ask for more money at your 90-day review. If you’ve been with the company for a while, it is OK to ask for a raise.
Don’t forget to evaluate the financial health of the company. If you work for a publicly traded company, you will be able to find this information readily. If the company is losing money, you’re unlikely to get a raise.
- It’s in the details.
When negotiating your salary, numbers matter. No one is going to give you a raise because you’re a nice guy. Be able to quantify the reasons you deserve more money. Even if you’re interviewing, you can still quantify your response: “Under my leadership in my last role, I boosted productivity in my team which saved the company X amount of money.” Be prepared with several examples to demonstrate your value.
These are just a few salary negotiation strategies. Of course, you will want to make sure you’re talking to the right person, that is, the person that can actually give you a raise or determine your salary. Ask in person, not over email or the phone. Never bring up personal reasons that you need more money! Standard cost of living raises range between 3% and 4%. If you are worth more, ask for more.
Don’t live a million dollars on the table! Ask for the salary you deserve.
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