How to Make Money

The Ultimate Guide to Negotiating Your Salary in 8 Not-So-Scary Steps

Updated July 7, 2016
by Jamie Cattanach
Contributor

Landing a job is hard enough.

After poring over your resume (and LinkedIn, and Facebook, and Twitter…) for hours, you’ve only scratched the surface.

You still have to pen a personalized cover letter, hope your name will float to the top of the slush pile and make not-too-eager-but-not-too-lax follow-up contact to encourage your resume’s buoyancy.

In the best case scenario, you’ll next undergo a stressful, and potentially lengthy, interview process. You might even have to travel.

So after all that, it’s a gigantic relief when your hiring manager makes an offer. You’ve got it! They want you.

And because (good) jobs are so precious, it feels way easier — and way safer — to just take the money and run.

But you’re doing yourself a serious disservice if you don’t negotiate.

Even if you only talk your hiring manager up by 5%, that’s still an instant 5% raise. If you took the job outright, you might have waited six months or longer for that pay increase, losing out on the extra income in the interim.

But it’s hard! And scary! And I don’t know how!

All that may be true. But you do want a better salary, right?

Time to bite the bullet and learn how to make an offer they can’t refuse.

Negotiation Skills: Yes, You Can!

It’s not just about the money you’re leaving on the table if you forego a hard conversation with your new boss.

Negotiation skills will help in all aspects of your life.

For instance, this guy split his San Francisco rent in half, and this family saved $5,000 on bills — all thanks to their savvy negotiation tactics.

You can also negotiate within a job you already have. This guy got himself a 45% raise by doing just that. You might also be able to land better benefits, a more flexible schedule or responsibilities that better suit your interests.

Even though it can be a little scary, negotiation is totally learnable — and practice makes perfect.

So we’re here to help you get a handle on this valuable skill.

Here’s the ultimate guide to negotiating your way to a better salary in eight achievable steps.

1. Actually Do It

Almost half of us take the first offer we get and skip negotiation entirely, according to a study by CareerBuilder.

The number of women who accept the first offer is slightly higher at 54%. Their reluctance, no matter its cause, is a huge factor in the gender pay gap.

Although it may not seem like much, the money you’re missing out on adds up.

Say you’re offered an entry-level job at $40,000, and you take it right off the bat. If you’d successfully negotiated a modest 10% raise, you’d have an extra $4,000 over the course of your first year.

That $4,000 probably means a lot more to you than it does to your company.

Plus, your subsequent raises will be based on your existing salary. The higher your salary starts out, the more quickly it will grow.

So if you’re staring down an intimidating conversation, crack your knuckles and get ready. It’s one worth having.

2. Know Your Work’s Worth

Check how much people in your new position actually make. You can quickly and easily use resources like Glassdoor to do this, so there’s no excuse not to be informed.

Try to find local averages as opposed to national ones. If you ask a Midwestern company for a New York salary — or a senior-level salary when negotiating an entry-level position — you might be in for a bad time.

Luckily, in many cases Glassdoor actually lists salary information down to specific roles in specific companies, so you’ll have a better understanding of how much you can reasonably expect.

Get familiar with these numbers as early as possible in the application process. They might keep you from shooting yourself in the foot.

“If you’ve already said you’re looking to make $50,000 and they offer you $50,000, it’s bad form to attempt to negotiate from there,” HR expert Suzanne Lucas told CBS.

So inform yourself before you fill in that “Desired Salary” box on the application, or you might find yourself locked into a lower rate than you could have gotten had you known better.

3. Have a Good Argument

If you’re asking a company for more compensation, you need to have some leverage. It’s easy for a company to invest in something it needs, but if you can’t explain why you should earn more, it’ll be a tough sell.

In fact, if you think your negotiation is gonna be rough, check out this college student who negotiated her way into a job that didn’t even exist before she pitched it.

A huge part of her success? Identifying and fixing tangible problems the company was experiencing, which proved her value as an employee.

Research your new company thoroughly and figure out its weak points. Then, apply your skill set to the company’s pain points in specific, actionable ways. Make yourself an asset the company can’t function without.

Maybe you notice the company’s blog could use some traffic. Good thing you have SEO training!

Would your proficiency with spreadsheets allow you to automate down the workload in your new department? Let your hiring manager know.

Knowing how your skills qualify you for your new position will also boost your confidence, and it’ll set you up for a much easier — and more successful — negotiation.

4. Look at the Whole Package

Salary is one thing.

But the very best part of working for someone else usually has more to do with the sideline benefits, which can offset pricy items you’d otherwise have to pay for yourself, like health care.

When you’re planning your negotiation, make sure you keep your whole compensation package in mind. What’s its monetary value — and what’s most important to you?

If you’re missing out on something you’d really like to have, it might give you more motivation to negotiate aggressively.

Or if there’s a specific perk you can negotiate for, maybe taking a bit less money wouldn’t be so bad. (Remote work, anyone?)

By looking at all of the ways you’re compensated, you’ll be more prepared to have a reasonable conversation about what you expect and what your employer is able to provide.

5. Have a Plan

Planning to negotiate at all is a great start, but you should come to the table with some specifics.

At minimum, you need to have two numbers in mind: a target — the ideal number you’d like to secure — and the lowest salary you’ll accept without walking away.

Your target will probably be close or equal to the top end of your job description’s average bracket. You can shoot for the moon beyond that… but if you’re too aggressive, you do put your offer at risk.

Your walk-away number is fairly self explanatory. What’s the minimum amount of compensation you’d need to happily perform this job’s requirements?

If you can, avoid selling yourself short. Unless you’re in desperate need of a job right now, you might be able to find a position that’s a better fit, better paid or both.

6. Be Confident…

Part of the reason it’s so difficult to negotiate is that creeping, vulnerable feeling you’re completely replaceable… which is especially easy to fall into after a long and arduous job hunt.

After all, if you ask for too much, there’s bound to be another guy who’ll do the job for less right around the corner. You don’t want to get cut loose.

But even though it might feel scary and presumptuous, negotiating may actually improve your appearance to your prospective employer.

“Negotiating is a demonstration of your leadership and signals to your potential employer that you’ll have the company’s back,” writes professional coach Lisa Gates, who co-founded She Negotiates.

“When you’re working with vendors, clients, and other partners, the company will want you to get the best deal possible for your team, right?”

So be confident in both your decision to negotiate and in the negotiations themselves.

When your hiring manager makes an offer, make a reasonable counteroffer — and don’t feel compelled to stop after her first rebuttal, either.

Keep going until you find a reasonable solution somewhere between your target and your walk-away number.

This is your job — and your life! You should be firm about wanting the best you can get.

Your employer will thank you for your perseverance later.

7. … But Know When to Stop

Obviously, don’t be pushy, rude or entitled.

Don’t ask for a salary you know is well outside the range the company is willing to extend.

Most of all, don’t be caught unprepared. (Asking for too much pretty much amounts to the same thing.)

Don’t make extreme counteroffers without any facts to back them up.

Gates writes, “Each counter offer you make needs to be backed up with credible reasons — stock phrases you develop in advance that are designed to express the value you bring to your potential employer.”

Some examples:

“My research shows the market value of this position is between $85K and $95K. With my experience in X and my training in Y, I think $95K is a more appropriate place to start the conversation.”

Or:

“Your offer is exactly what I’m currently making, yet this position has more responsibility and requires the specialized experience I have to help you accomplish your strategic plan.”

Be firm and concrete about what you want, but reasonable about what your employer can offer.

Pay attention to clues in your hiring manager’s body language and speech. If she’s uncomfortable, you should probably call it off.

Bottom line? Stop when you have an offer you’re happy with, but before you ask for too much.

That fine line will depend on your industry, role and a thousand other factors — but you’ll be able to sense it as you approach it.

8. Practice, Practice, Practice

Like any other new skill, negotiation takes time to learn, perfect and become comfortable with — so take your negotiation skills for a spin whenever you can.

You can start with low-stakes stuff: Ask for a dollar off the tomatoes at the farmers market, or see if you can haggle for a deal next time you hit the bookstore (yes, really).

Once you’re feeling more comfortable, you might negotiate for new benefits or better pay within your current position. Maybe you could use your skills to convince your boss to let you work from home.

The possibilities really are endless once you’re comfortable. You can negotiate the price of your next rental home, your cell phone bill or your car insurance.

You could even haggle about whether you or your partner is taking care of the dishes tonight. Or this week.

Or maybe forever.

… so just make sure you’re using your newfound powers for good.

Your Turn: Will you negotiate your next salary… or your next bookstore purchase? Let us know in the comments!

Jamie Cattanach is a staff writer at The Penny Hoarder who totally fell into that 54% statistic when she took this job. Her writing has also been featured at DMQ Review, Hinchas de Poesia and elsewhere. Feel free to reach out to her on Twitter: @jamiecattanach

by Jamie Cattanach
Contributor for The Penny Hoarder

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