So often, job seekers assume salary is 100% tied to something as simple as how well they perform their job. We think the job market is a fair place, and our hard work will pay off. And, why shouldn’t we believe that? Our parents and grandparents taught us that we should find a good company to work at for thirty or more years. As long as we worked hard, the company would give us a generous retirement and we’d never have to worry.
Unfortunately, this is often not the case in today’s job market. Compensation is more of a reflection on two things that are not at all related to hard work. The first is your skill at negotiation, and the second is your willingness to change jobs. Almost always, you will receive much larger raises over time if you switch companies than if you wait for your current company to recognize you for your hard work.
When you decide you’re ready to look for a new job and make more money, your negotiation ability will strongly influence how much you walk away with. The good news is negotiation is easier than you might think. Even if you’ve never tried it, you can learn. And, to become better at it, the number one thing you need is practice.
But, there are a few guidelines you should know before you get started:
- Do your research – Before you begin a negotiation (or really, an interview), do your homework! Find out how much your new job should pay. Websites like Salary.com and Glassdoor.com often allow you to research as far down as a particular position at a certain company in a specific city. Realize that companies can offer a wide range of pay for one particular position. For example, project managers can make anywhere from $50,000 per year to $150,000 per year. Understand the range for the job you’re considering.
- Don’t reveal your number first – Providing your salary history to the company you’re interviewing with is almost never helpful to you. If you make less than the company is planning to offer, they will give you less. If you make more, they may walk away too quickly, assuming you’ll be expensive. In early conversations, the hiring manager, recruiter, or human resources representative will often ask you how much you are currently making. Do your best to sidestep the question of salary. If possible, ask the company to share their range with you.
- Know your limits – If you are currently unemployed, you may feel desperate to find a job right away. If you have a great job, you may be able to wait a year or more to find your next gig. Take into account your personal situation, including your family and children. Determine ahead of time how risky you want to be. The more you’re able to risk, the more you may gain. But, if you don’t have anything to risk, you may want to play your negotiation on the safe side.
- Keep fear at bay – Fear is one of the biggest reasons many people don’t negotiate for more money. All sorts of questions will run through their heads. What if the company says no? What if they take the offer away? What if they laugh at me, or think my request is too much? Keep this in mind – it doesn’t surprise employers that you want to negotiate. As long as you’re respectful in your request, they will respond with an equal amount of respect. Companies cannot always honor your exact request, but they won’t take the offer away from you. If you ask for more and they say no, it will be up to you to decide if you would like to accept their original offer or not.
- Be willing to walk away – If your risk tolerance is quite high, this can be one of the strongest and most effective tools in negotiation. Be willing to turn down an offer if it’s not right. If you cannot come to an agreement with your future employer, thank them and move on. Just having this mindset will let the company know you’re not desperate for work. You’re a top performer, and you expected to be compensated as such. If something doesn’t work out, avoid hard feelings and move on. Your next big offer could be right around the corner, and you may find another opportunity to work together in the future.
At the end of the day, companies expect you to negotiate. Frankly, they respect it. A hiring manager will never give you their best offer first. They leave wiggle room, so they can move up when you ask for more.
Before you negotiate, be sure you know your facts. Take notes about the reasons you feel you deserve more money. Focus on things like the revenue you’ll add to the bottom line, and stay away from personal arguments such as the number of children you have.
Practice your negotiation in the same way you would practice your elevator pitch. The more you try it, the less nervous you’ll feel and the more prepared you will be. And, remember – practice makes perfect. If your first few negotiations feel rocky, learn from them and move on. Your next negotiation will be that much better!
Although this process can be an uncomfortable one, you will find the five or ten minutes required for a negotiation can add thousands of dollars per year – and possibly hundreds of thousands over the course of your lifetime! Take the time to learn to negotiate; you won’t regret it.
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