Best Salary Negotiation Strategies
For most students, and even for more experienced employees, salary negotiations can be quite a nuisance and a very emotional experience.
Sure, you want the job, yet you would like better pay, or you just want to get paid what you think the position is worth, but you may be a little hesitant or not assertive enough.
And what’s more, how would you negotiate higher compensation or better bonuses or fringe benefits if you just graduated and have virtually no experience on this matter? Well, the proper answer is that, although you won’t at all times get what you wanted, it is crucial that you understand the process of negotiating, feel how it goes, and begin to start getting yourself into that more assertive role. Read on to get the feeling of being in control, and you may end up getting better perks and get a better salary deal in the process.
Understand the process
Let’s first take a look at the definition of negotiation. Well, simply put, it is the process of discussing a subject in a meeting with another person with the objective of reaching an agreement. The game (or art) of negotiation is founded on the idea of mutual agreement on specific issues, not on confrontation.
Though salary negotiations usually start after your interview, they actually already begin for you at the time of the initial interview. What you are telling the company representative about you as a person, about your accomplishments, and what you can contribute to them, is important and will increase your value when they will offer you a job. At the interview, make use of ‘active’ words to describe your accomplishments.
I mean, use words like I created, I initiated, I contributed to, I oversaw, I took charge of, I developed, and so on. Your ability to deal with multiple projects simultaneously, to recognize and handle details, or your excellent time-efficiency management, or some other skills, are definitely contributing to your value.
The process of negotiation is not just saying ‘I need to have more money’. You are required to have an answer to specific questions before you can negotiate your salary. You must know whether there may even be the slightest chance to get more. Questions that you must have the answers to are for example:
- What exactly is the pay range for the job you want that employers and/or the industry are using?
- What is your lowest acceptable salary?
- What are your qualifications that make you worth a higher pay?
You may very well obtain general salary information from the National Association of Colleges and Employers, the career services desk at your college, individuals who are working in the industry or are employed by a certain company, public libraries, employment websites, trade associations, trade publications, or the U.S. Bureau of Labor Statistics (BLS).
Now suppose you know the answers to the questions above, you will probably be confronted with some objections against your request for higher compensation. Mostly you will hear things like:
- you are not experienced enough
- other employees are not making more money
- the company’s budget is not permitting it, and, of course, the old song of
- this is what we pay new employees
Just give it a thought in what way you could respond to the above-listed objections in such a way that the discussion will continue on a positive note, but without cornering yourself. Keep In mind that you are asking a question, you’re not there to deliver an ultimatum. To give you an example: as to the objection ‘other employees are not making more money’ you may react by saying something like: ‘I see… (pause a little here) What exactly is the compensation range for the position? And what would be necessary to reach to a higher level within that specific range?’
Keep in mind that you want to reach a common agreement and in many cases, you will need to ask a couple of questions to find out if there is room for a compromise. In most cases, particularly at this level, the individual who offers you the job, has specific instructions and little room to move, so you’ve got to give him a darn good reason for going back asking for more financial negotiating room.
The job interview
There are specific skills and considerations that may help you a lot at the job interview when discussing the issue of salary. Take a closer look at the following:
- Well-developed listening skills are crucial if you want to understand what exactly the needs are of the hiring company and the person who does the hiring. Giving answers at the interview in a way that your interviewer or prospective supervisor will feel that you are the right person to solve their problems, is a great way to try to make them pay you top dollar. Listening well implies that you do not interrupt the interviewer and allow him to finish their way of thinking. Consider also to include part of what he said in your answer to make clear that what he said was heard. You should also include common communications skills like establishing proper eye contact, nodding when the interviewer makes a statement to indicate that you did hear it. This sort of techniques are telling the interviewer: ‘I’ve heard you and I’m understanding the things you’re saying’.
- Try to avoid being the first person to mention money. The idea here is that you, inadvertently, may ‘low ball’ yourself with the effect that you may be settling for a salary that’s less than what the company had in mind.
- If you are asked what kind of salary you’re looking to get, just answer that you are thinking of a certain range but that your actual acceptable salary also depends on other aspects of the entire package, such as fringe benefits.
- If they push you on the salary subject, be sure to come up with a range with as bottom what you need to have, and at the top some 15% above what you think is appropriate. Something like ‘My range is in the $28,000-$34,000 area’. Your range should be based on common industry practices, on other people’s experiences, and in line with what you think you could be worth to the company, based on your market analysis.
- When you’re asked about your current pay, always tell them the truth, but when you are in for a raise anytime soon, do not forget to tell that as well.
The Job Offer
- If you are given an offer and if you are interested in the position, you may point out that you’re highly interested and very excited about the given opportunity, and that they can expect your reaction in 24 hours. In general, 24 hours will do to reflect upon the offer, to find out what else you want to know or to buy a little more negotiating room. If you have already made some other interviewing appointments, you may consider asking for some more time to get back to them.
- By the time the talking about your base salary is done, but before you will accept the job and the offer, ask about some other crucial fringe benefits that you may be entitled to. These may be:
- health insurance compensation
- vacation time extensions and pay
- salary review on a yearly basis
- pension savings plan
- bonus plans
- college tuition reimbursements
- stock options plans
- Try to avoid negotiations by phone, only call to accept an offer, and always politely request the offer in writing.
The Process of Negotiation
- Take a look at a few examples of how your salary discussion may go when you are trying to negotiate for higher pay when the offer is made, or after you’ve been considering the job for a day. One thing always works in salary negotiations, and that is that asking for higher pay (in a question style) is better than demanding it, as this is avoiding the risk of sounding arrogant.Company representative: We are offering you an annual salary of $20,000.Answer option 1: I’m very thrilled that you wish to hire me, and I would love to have the position. Based on my vast experience, and also due to all sorts of expenses I will have after graduation, I need for example to pay off my college loan and will need a car, I really would like to make around $30,000. How are you feeling about that?
- Answer option 2: I really do like this opportunity, and I’m sure I can make a great contribution, but there are a few other opportunities for me as well that all are in the range of $30,000 (never say this unless it’s really true). Is there any way to work this out?
- Answer option 3: I’ve graduated now and I’m on my own, and I really need a salary in the 30,000 range. Would there be any way we could work that out? I really love the opportunity and I very much would like to work here, but I need that number. What’s your opinion?
- If you are not getting the salary you like, but want the job anyway, it is wise to ask if they can review your request again in three or six months rather than a year.
- As all options above are indicating, you should try to make positive or reinforcing statements about how much you like the company or the position, before you will ask for other things. Your words should make clear to them that you appreciate their offer and that you’re almost ready to join the company and that this one final thing could make it perfect.
In summary, keep in mind that you are likely to spend the next four or five decades working and that it is crucial that you land a job that suits you and for which you have the right qualifications, so make sure your career choice and the salary meet your expectations.
If you receive an offer from a company you really like, or when you feel there’s sufficient upward potential though the pay is slightly less than you wished, keep in mind that accepting the offer may be worthwhile, particularly if it is a company where you have the chance to learn a lot so you may qualify for job advancement over time. The negotiating process is, however, a key skill which, if you learn it early on, may result in quite nice dividends during your career, not just in a financial sense, but also to enhance your self-esteem.