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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