How to Negotiate Your Salary (Negotiating Part 3)
You’ve finished up a round of interviews, and then you get “the call”....
They want you for the job! Congratulations!!!!!
But before you start celebrating, you need to take the time to negotiate the terms of the new job offer—especially the salary. Don’t just say, “Yes, yes, yes,” because you’re flattered!
Less than 50% of Americans bother negotiating a new job offer, and I have a hunch it’s because a lot of people don’t even realize that they can or should! [*]
When it comes to negotiating, and how you should do it, there is so much I could say! Do you realize that there are entire programs out there dedicated to teaching the skill sets? Yeah… there are skill sets.
Do you have “the skill sets?”
We don’t realize how much we use negotiating in our everyday lives: from buying a car, to selling our house, to determining our salary, to when our teenager tries to extend their Friday night curfew, or our toddler refuses to try their brussels sprouts. We are frequently trying to meet the needs and interests of not only ourselves, but another party.
So, the thing is, I’m limited in what I can teach you about negotiating in one sitting. But here are some of the most important points…. First off, when it comes to negotiating about terms of employment (especially salary) this is best left for AFTER the employer has extended a solid job offer to you.
While you are going through the screening and interviewing processes (so before you’ve been offered the job), they may choose to bring up salary expectations. But I would tread very lightly here with what you say before there is an actual offer on the table for you to come work for them. (Also, if they bring up your “previous salary,” I give advice later in this post about how to react to that question—which believe it or not—is actually illegal to ask in some states!)
Adam Grant, an organizational psychologist and researcher for Wharton’s school of business, says that negotiations are all about two things: results and relationships. [*] If you are actually seriously interested in a job that you’ve been offered, but you’re concerned you aren’t going to be able to live off of the salary, this needs to be expressed, but you also don’t want to come off so demanding that you make them (your potential future boss) feel like you’re a bulldozer.
There is an art to getting what you need.
What you must understand is that job negotiation is a “game,” and if you aren’t willing to learn the strategy, over the course of your career you are going to lose. Research says, somewhere around $750,000 over the span of your career. [*]
So, what are the rules?
What sucks about this topic is it has everything to do with what industry you are in. Even more than that, it has to do with what country you are in and what kind of gender-bias or potential discrimination may exist in your culture. Because I can’t cover everyone’s unique situation today, let me just help explain this from the “other” point of view, for a minute.
As a boss (which I’ve been for several years now), I know that a company has expenses and that to not only breakeven, but make a profit (and the goal has ALWAYS been to make a GOOD PROFIT), I have to be competitive and smart about what I pay people. I don’t go around overpaying people, but I also don’t want to give them a crapshoot of a deal by seriously undercutting them.
So, what helps is when someone who applies and interviews for a job already knows their “worth'' and has already researched what they should be making (what they can graciously demand) in the current job market.
[If you haven’t already read it, now's the perfect time to read the blog post I wrote called, “Know Your Worth Before Negotiating Salary.” In that post I give you the information you need to do the research on what you can and should be paid to do a particular job.
When it comes to negotiating a new job offer, it is also important to keep in mind that more money isn’t the ONLY thing you are likely going after (sometimes lower pay but better company culture, more autonomy, remote work, better work/life balance—ALL equals a happier you, more than just a fatter paycheck!).
I go over this in greater detail in this blog post: “New Job Offer? Here’s What to Negotiate On,” because a lot of job seekers don’t realize that salary isn’t the only thing up for negotiation when they are discussing a new job offer with their potential employer.]
Keep in mind that you need to know what the employer values and where their interests lie. If you are able to define (ideally, during the interview process) what they need out of the person who’s going to do the job, and you can confidently assure them that you can put your experiences and skills to work for them—adding the value and help solve the problems that need to be solved at their company—they will be more than happy to negotiate the terms of your employment. Seriously, employers EXPECT that you are going to want to negotiate with them. If you are their top choice for a position, they definitely want you there!
So, when it comes to salary…. We all know the primary reason why we work, right? It is first and foremost to provide for the basic needs of living. Therefore, you need to have done your due diligence by finding out what kind of salary range is realistic for the position, the company, and your geographic location (if it is 100% remote work, clearly you can negotiate the salary differently because you are not necessarily bound to the limits of what other competing companies pay within the same city). Once again, refer to Know Your Worth Before Negotiating Salary for detailed help on finding out what the company is currently paying people who do the job and your market value in the current job market.
How to Determine the Salary You Should Negotiate For
Based on the information you find as you do your research on your current market value (which has a lot to do with how in demand your skill set is) and what the company pays people who are already doing the job, you are going to want to come up with two numbers: a salary range.
It’s smart to have a range in mind instead of just one solid salary amount because it creates room for the actual negotiating. If you only have one number in mind, you could end up missing out on a salary increase that the company may very well be willing to give you!
Keep in mind, when you did your research, you should have become aware of about how much money the organization already pays its employees that are currently doing the job title. Knowing this dollar (or whatever currency they use in your country) amount will be your greatest help for determining the bottom number in the salary range you can ask for.
You know your own experience level, accomplishments, and what you uniquely could contribute to their team. Based on all of this, your bottom amount (the low number in the range) needs to fit within similar parameters to what the company pays people doing the job but should also be a number you honestly would do the job for.
Realistically, you NEVER want to make your potential employer aware of how little you would be willing to be paid to do the job (even if it is your dream job!). You want the low number in the range to fit in the ballpark of what they are already paying people who are doing the job, BUT…it typically should be a pay increase from what you were being paid at your most recent job.
The number should sound realistic.
The second number (the top end of your range) can sound a bit like a stretch (that is totally okay) but should still be within the normal range of what someone with your experience level is making in that same job role, perhaps at another company that can afford to pay more.
Because so much of this advice is subject to what industry and role you are going for, it is hard to say how close these two numbers should be to each other! You need to do your research, which should also include talking to people who do the role and find out what they and their colleagues make (even if it feels awkward to bring it up, it will help in the long run).
Now here’s the thing, when you get offered a job (officially) there are times when it is best for you to give them your salary range first, and there are times it is best for you to get a range from them first.
For example, women frequently get undercut in salary negotiations. (This is the sad truth about the world we live in[*][*]). So, if you are a woman, and you know your worth as an employee, there will be times you need to demand it, so they don’t *lowball you way short of that worth right in the beginning of the negotiation process. Yet, this advice is entirely circumstantial.
[*Lowballing is essentially when an employer makes a job offer and gives the initial salary amount, but it is much lower than a) what the employee was expecting to be offered, or b) what the employer has actually budgeted for the role, or c) the market value of what they should be paying for the role or experience level of the person to whom they are offering the job.
This (lowballing) happens for a variety of reasons; one could be that they (the employer) have a tight hiring budget. Another reason could be that they expect the job candidate to negotiate and ask for more pay. Lowball offers can also be signs of discrimination. Don’t assume that it is a sign of discrimination right away if you get a lowball offer, but the best thing to do is know your market value before they’ve even offered you the job, that way you know when you are being offered too low of a salary and can really push in negotiating!]
What Should I Do if They Ask About My Previous Salary?
When it comes to disclosing information about your previous or current salary, I want you to know that different countries and states have different laws about these things. It is important that you are aware of them. I strongly encourage you to read this article: Can Employers Legally Ask About Your Current or Previous Salary? Within the United States, in most areas they can, but in almost every instance, you would be wise to not disclose this information.
If your potential employer or a recruiter asks you a question like this in an interview or while you are negotiating pay, you can take whatever approach feels best to you. Here are a few different ways you could respond:
Cut and dry is saying, “My previous salary is personal information and with my current experience level and skills, I am only looking for a position between _______ and _______ salary range.”
If you want to be funny, make a joke of them asking by saying, “Well that is something I only disclose to two people: my spouse and my accountant.”
But honestly, if you were paid well at your previous position, and you expect them to match or exceed what you previously made, if you have ANY concern that they might lowball you, you might be wise to just disclose how well you were paid at your previous job.
Each of these ways of responding are circumstantial. Your gut and research will guide you in how to respond if they do have the nerve to ask you this question.
Other Aspects of The Job to Think About Negotiating, Besides Salary
Okay, so you’ve determined what kind of salary you are wanting/needing. Now you need to take the time to answer some other questions for yourself: What do you think about their work schedule and expectations? Do you want to try and negotiate a hybrid work model where you can work from home part of the week? Do they offer equity or stock in the company? Does their PTO sound realistic to you?
If receiving a certain amount of sick leave, maternity leave, bonus pay, commission, etc., are important to you, know what this specific employer offers and be sure it feels sufficient for yours and your family’s needs. Seriously, if you haven’t, you need to read New Job Offer? Here’s What to Negotiate On where I detail out several aspects of a new job that many job seekers overlook negotiating on.
Tips and Tactics for Negotiating Salary
- When you are offered a job, either they will bring up a number (salary or hourly rate) first or they will expect you to. You need to be prepared beforehand with what you are going to say (and how you will react). The information I gave in the previous sections will help you determine your ideal salary range for the position, as well as when and how to bring it up.
- Don’t be afraid to pause and think. It can feel like it’s a “high pressure conversation,” but the reality is, you don’t need to say “yes” to anything right away. You don’t need to respond right away. As you are polite, you can always say, “Thank you so much for this offer. I would like some time to think it over, if that is, okay?”
- You can (and should!) ask for the opportunity (typically a few days) to think an offer over!
Come back with a counteroffer (in person, over the phone, or via email, but I recommend talking to them versus emailing them).
Your initial counteroffer could be presented as your salary range or a solid number.
Here’s how to do it as a salary range:
Say something like, “I appreciate you giving me time to think over your initial offer. This is an incredible company and I truly believe that I can _____________, ___________, ____________ for your business.
I realize that your organization may be working within certain budget constraints for this position. But unfortunately, it’s difficult for me to make this call because __________ salary is not within the __________ to _________ salary range I was hoping or expecting with my current experience level, skill sets, and market value for this type of position.
If there is any way that we can negotiate getting my salary within/closer to that range, I would love to discuss it further with you.”
Here’s how to do it as a solid number:
“I appreciate you giving me time to think over your initial offer. This is an incredible company and I truly believe that I can _____________, ___________, ____________ for your business.
I realize that your company may be working within certain budget constraints for this position. But unfortunately, it’s difficult for me to make this call because I’m very interested in this position, but __________ salary is not as close to what I was hoping or expecting to be offered.
Based on my experience level, current market value, and further research I’ve done since we last spoke, I should be making closer to * ___________ for this specific type of role.”
*Research from Columbia University recommends when you counteroffer, you want to give a hard (very specific) number, for example $95,750 vs. $95,000, because it leads them to believe you did further research on your market value and are more informed on what you should be making. [*]
Counter offers that are a solid number should feel like a win-win situation (because the truth is, they typically have already budgeted that if they really want you, they are going to pay you above what your lower salary range number was).
- Before going into a negotiation, you want to have already thought up what some of the harder questions are they might ask you and practice how you would respond.
- Just like any skill, negotiation is something you should practice!!!
Feeling nervous is totally normal. Practicing will help alleviate your anxiousness!
I like to tell people, go take part in a bunch of small negotiations (asking for a discount on a minorly damaged good at a store or a service that you frequently use) because it can help you feel more comfortable when it comes time to do bigger negotiations.
Just like I recommend you do practice interviewing, you would be wise to practice negotiating pay. Practice extending a counteroffer. Practice how you will thank them for offering you the position and how you know you can add value and bring your best self to this position if they will pay you what you are asking.
Practice sharing what value you would bring to the role, what you are excited to begin working on and doing for their company, and saying some variations of “As I’ve done my research about this particular role, and what individuals with similar levels of experience to mine are being paid for it, I believe _______________ (amount of money) would be a realistic and acceptable amount of compensation for me to accept this position and put my best efforts towards helping your organization achieve its goals.”
- If they regretfully express to you that they cannot meet your salary expectations, be respectful, and decide if you legitimately can afford what they claim they are able to pay and figure out if other aspects of the benefit package, retirement, flexibility of schedule, etc., outweigh your desire for a certain level of compensation.
Good luck with all of this! Let me and my team know how it goes for you over at the Refer Facebook group! Feel free to bring up your questions and concerns about negotiating salary so we can help you out!
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