How to Negotiate Salary
Here are some of our favorite tips on how to negotiate salary. Negotiations are one of the trickiest parts of the hiring process. Even if the offer you receive is enticing, it’s always a good idea to have these conversations with a new company. In a lot of cases, it is much harder to negotiate salary increases when you are moving around within a company.
Research the company & understand the market
Before you even begin to have salary discussions know what the market pays for that type of position in your area. You’ll want to research the company as well. Organizations fall into three categories when it comes to salaries: market leaders, at market and below market. Google and Amazon tend to pay as market leaders, whereas non-profit organizations tend to pay below market. Glassdoor and PayScale are great resources to start doing some research. If you’re considering a job in a different location, be sure to use a cost of living calculator as well to get an understanding of the local area and ensure you’re able to maintain your current lifestyle.
Know your value and bottom line
If you’ve been in your current job for a long time and have been receiving a standard cost of living raises annually (between 1% and 5%), chances are you might be underpaid. During your salary negotiations, remember to mention additional training, certifications or education that you’ve gained while being employed. Employers often won’t increase your salary when you obtain certificates or complete a degree, but an outside company usually will take it into account.
Be confident & professional
The salary negotiation is not a win-lose proposition. These conversations need to be collaborative. Ultimately, both parties are trying to achieve the same goal; you as an employee. Work together to find a solution but keep emotions and feelings out of the discussions. Always assume positive intentions from the other side, but be assertive enough to know you’re boundaries. Sometimes it’s helpful to practice your negotiation tactics. Sound Interview Professionals can help with salary negotiation tactics during our interview coaching sessions.
Build a case
As you have these discussions, you need to be able to articulate precisely why you deserve more. I’ve seen negotiations go poorly when the applicant hasn’t provided a convincing case. Tell me about the value you add to the company and quantify it. There have been candidates in the past who try to negotiate based on their expenses, and while we can sympathize, I’m not going to give you a higher salary because you have a large student loan payment.
Provide a range (if asked)
More and more places are making it illegal to ask about past earnings during the hiring process. Instead, recruiters are asking about salary expectations. This tends to come early on in the process, sometimes even before the interview. They are trying to make sure that your expectations are within their approved range for the position. If you’re asked what your salary requirements are, it’s best to provide a range. If you’re asked to provide your salary expectations, always give a range. At the bottom of the range should be at least 5-10% more than you’re currently making and add 10-20% to get the top number. For example, if you’re bottom is $100,000, the top should be around $115,000. At the offer stage, you can then negotiate salary within the range that you’ve provided.
Start with the base
It’s in your best interest to negotiate salary before talking about signing bonuses or other allowances. Companies might try to offer a one-time signing bonus to bump up to your salary expectations. The base is significant because it makes everything else more valuable. It’s also the most difficult thing to move on. While signing bonuses are nice, they don’t compound year over year, and they don’t affect your retirement contributions. A higher base will lead to increased total compensation.
Negotiate other benefits
Sometimes hiring managers aren’t able to move as much as you’d like on the salary due to budget constraints. Be sure to ask for information on healthcare benefits, vacation, sick time, paid holidays, and other benefits before you make a decision. Our clients are often surprised to learn that vacation time is negotiable. Organizations usually have policies that outline a set number of paid vacation days based on service, but if you are mid-career, chances are you can negotiate additional days. Make sure you know about all of the perks that the company offers including modified work schedules, telecommuting, paid parking, on-site gym or childcare, employee discounts, etc. before making your final decision. Take all of those things into consideration when you make your decision.
Be prepared to walk away
This one is hard. Sometimes you aren’t able to agree in the negotiations, and you have to walk away. Before you begin, know what your limits are and stick with them. If both parties can’t agree, then the job is not the best fit. Walking away from a job offer is challenging, and you might feel guilty, but you need to make the best decision for your situation. Stay positive and be sure not to burn any bridges with the company.