Salary negotiation can be one of the scariest parts of having a career — but it’s also one of the most important.
Nearly one out of five people never negotiate their salaries, according to a Salary.com survey. If you don’t negotiate their salary, you could miss out on more than $500,000 over your career.
Whether you’re starting a new job or requesting a raise, you need to know how to talk money. To help you prepare, here are the best tips from salary negotiation experts around the country.
1. Learn about your company’s budget
When asking for a raise, don’t just focus on your own job performance and qualifications. Lee Fisher, human resources manager of Poles Direct, suggests that we consider how the company is doing, as well.
“Your company will have a particular budget set out, and you can’t just waltz in and ask for a random figure,” says Fisher. Instead, you must consider whether your request is feasible. If the company is struggling, then they won’t be able to fulfill your request, regardless of how much you deserve higher pay.
Fisher encourages employees to think of more strategic factors, not just personal ones. Even if you deserve a raise, whether or not you get one can be all about timing and where the company is at financially.
2. Do your research
If you’re negotiating a higher salary for a new job or asking for a raise at your current one, be prepared to back up your request with cold, hard data.
“[First,] know what your competition is paying their employees with the same responsibilities as you,” suggests Sean Martin, marketing manager at Directive Consulting. Don’t necessarily research job titles. Focus more on positions that involve your same responsibilities.
Then, ask for a higher salary in a strategic way, Martin says. He suggests the following phrasing: “I know that our competition is paying someone like me $X. Is our company successful enough at the moment to match?” Phrasing your request in this way, Martin says, is a leveraging tactic that puts the ball back in the employer’s court.
To learn about average salaries, research job search sites. But before signing a contract, furthermore, speak with human resources about typical pay ranges at the company. With all of this research, you’ll be armed with realistic expectations.
3. Talk about your value
Before heading into salary negotiations, you need to build your case. Don’t talk about how more money will help you pay off your student loans or go on a cruise. Instead, focus on the value you bring to the company.
Hiring managers have a pretty straightforward goal. They aim to gather passionate, committed, and effective employees who will work together to achieve the company’s mission. If you’re asking for a raise, you need to show why you deserve it in terms of value you bring to the team.
“You need to convince them that the work that you’ve done and can do warrants greater compensation because of its value and your value,” says Jennifer Lee Magas, vice president of Magas Media Consultants. She suggests organizing your thoughts with the PAR matrix — Problem, Action, and Results.
“[Think about] a problem you dealt with at work, what specific action you took to solve that problem, and how your solution ultimately benefited the organization in terms of saved money or time,” Magas says. “[Instead of talking] about the money as it pertains to you, talk about the money simply as compensation for what you can do for them.”
4. Don’t be the first to name a price
When going through the interview process for a new job, Magas warns job-seekers against naming a salary. Requesting a specific number in salary negotiations can set you up for a low-ball offer.
Instead, try to get the employer to name the range first. Then you can negotiate later. Plus, the employer won’t think that money is your main priority in the job search. Demonstrate your value and passion for the company’s mission before asking about how much you’ll get paid.
Of course, many roles ask applicants to name their salary expectations before joining. If this is the case, then base your response on research from comparable positions. “If asked point blank, be respectful and professional with an answer ready,” says Magas.
5. Consider other types of compensation
Sometimes, a company sets a fixed salary and won’t budge on the numbers. If this is the case, you may be able to use salary negotiations to get better benefits.
“If your employer can’t elevate your salary then think of your compensation as a whole in terms of the benefits package,” says Kirill Bigai, CEO of Preply.com. You could negotiate for more vacation days, new hardware that will help you work, or more flexibility in your schedule.
Valerie Streif, senior advisor with The Mentat, echoes this sentiment. “Asking for more paid time off, or to have a day to work from home, could help an individual achieve a better life/work balance, which is arguably just as valuable as a larger chunk of money in a paycheck,” she says.
If your boss won’t budge on your annual income, negotiating other aspects of your contract can help get you to where you want to be.
6. Stay positive and confident
Talking about money can be awkward, scary, and stressful. To avoid getting overwhelmed, try to focus on the positive. If you’re a new hire, focus on how excited you are to join the company. If you’ve been working there for a while, communicate your enthusiasm for the role.
“[Money issues are] sensitive and must be dealt with in a calm and collected manner,” Streif says. “Avoid going on emotional rants, complaining to coworkers, or cornering your boss.”
Instead, be calm and confident. A little positivity can go a long way when it comes to salary negotiations.
How to negotiate a salary and make more money
So, if you aren’t sure how to negotiate a salary, these steps are a great way to start. Prepare thoroughly so you feel less stressed going into the salary negotiation. You’ll be armed with realistic expectations and ready to make your case.
Above all, stay positive and confident. Show that you’re excited to be part of the team and you have a lot to offer. If all goes well, the right compensation will follow.
Looking for even more tips on how to navigate a salary negotiation? Check out this guide to learn how to ask for a raise — and actually get one.
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1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.97% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on ourstudent loan refinance product.
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2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
APR stands for “Annual Percentage Rate.” Rates listed include a 0.25% EFT discount, for automatic payments made from a checking or savings account. Interest rates as of 11/8/2018. Rates subject to change.
Variable rate options consist of a range from 3.27% per year to 6.09% per year for a 5-year term, 4.64% per year to 6.14% per year for a 7-year term, 4.69% per year to 6.19% per year for a 10-year term, 4.94% per year to 6.44% per year for a 15-year term, or 5.19% per year to 6.69% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes. The variable interest rates are calculated by adding a margin ranging from 0.98% to 3.80% for the 5-year term loan, 2.35% to 3.85% for the 7-year term loan, 2.40% to 3.90% for the 10-year term loan, 2.65% to 4.15% for the 15-year term loan, and 2.90% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 3.27% per year to 6.09% per year for a 5-year term would be from $180.89 to $193.75. The monthly payment for a sample $10,000 loan at a range of 4.64% per year to 6.14% per year for a 7-year term would be from $139.65 to $146.76. The monthly payment for a sample $10,000 loan at a range of 4.69% per year to 6.19% per year for a 10-year term would be from $104.56 to $111.98. The monthly payment for a sample $10,000 loan at a range of 4.94% per year to 6.44% per year for a 15-year term would be from $78.77 to $86.78. The monthly payment for a sample $10,000 loan at a range of 5.19% per year to 6.69% per year for a 20-year term would be from $67.05 to $75.68.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.28% effective October 10, 2018.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.57% – 6.97%1||Undergrad & Graduate|
|2.47% – 6.99%3||Undergrad & Graduate|
|2.68% – 8.77%4||Undergrad & Graduate|
|3.24% – 6.66%2||Undergrad & Graduate|
|2.61% – 7.35%5||Undergrad & Graduate|
|3.01% – 9.75%6||Undergrad & Graduate|