Our mum says it’s always worth asking, the worst that can happen is someone says no. If you don’t ask, you don’t get.
Why should you negotiate your salary?
There is no guarantee that HR or the hiring manager will be fair or have the correct judgements about the value of your work. You don’t want to leave it to someone else to determine what you are worth. Unconscious bias is present and this will cause certain groups to be undervalued unintentionally. During raises, your manager may assume you are comfortable with what you’ve been offered. You may be too, until you find out someone else is being paid more than you for the same role and same experience just because they negotiated.
Over your career it will make a huge difference to your income. For example, imagine two graduates are offered the same salary at aged 21, and one negotiates for an extra £3,000. If the negotiator receives that extra £3,000 every year until they retire at age 65, putting that extra money into a low-risk investment account giving 4% interest they would have over £380,000 extra at retirement. That’s from negotiating once. Imagine if the negotiator did this at each opportunity. This will be also compounded as often your bonus, pension and salary increases are impacted by your current salary, particularly when in the same role at the same company. You should negotiate your salary every year, usually as part of a performance review, and definitely for every new job.
How do you negotiate?
1. Know your market value
The more information you have the more power you will have in negotiation and the better equipped you will be to stand your ground. You need external reference points to accurately determine your worth and not undersell yourself. You can do research from:
Speaking with recruiters, you could let them know you are considering options and looking to understand what you might get in the market
Leverage your personal and professional networks. It may not be appropriate to ask someone their salary directly, instead you could ask them to share their expertise by asking for the approximate salary range for X position, or what they would expect Y job you are applying for to be paid. Ensure you talk to both men and women.
Talk with a career counsellor or careers service. Many Universities offer continued support to alumni.
Evaluate recent job postings for similar role
Use websites such as glassdoor, salary.com. monster.com where individuals have shared salary information
There are also websites for specific careers such as guidestar.org for non-profit and TheLadders for law jobs.
Your government website on employment statistics may hold useful information
Review your company’s annual report, sometimes salary information is included
If you work for the government their pay is usually available online
Ensure to take location and experience/skills into consideration. You will need to do more research in industries without standard pay structures or with opaque “competitive salaries”. Once you have the evidence you can use these as reference points during your negotiation. Consider what you would pay someone else if they were in an equivalent position, as it can be easier to assess someone else.
2. Create a strategy – figure out what you want
Establish your target value, which is what you would love to achieve. It can be worth pushing the boundaries, if the other side gives in immediately then it is likely you could have asked for more.
Work out your best alternative to a negotiated agreement (BATNA). This is when you understand the alternatives to not getting what you are seeking. For example, if you ask for a raise and don’t get it your BATNA could be to stay with the same company or get a new job. Establish what your bottom line is, what the lowest amount you would be willing to accept before choosing your BATNA.
Remember everything is negotiable. This includes base salary, bonus, job title, holiday days, pension, shares, flexible hours, hiring a team or a parking space. You can include these in your negotiations.
There is a direct correlation between what you ask for in negotiations and what you get – typically you meet in the middle. It is very rare your employer will offer you more than what you ask for. Therefore, pick the top of the range, ask for more than what you want so there is room to negotiate and counteroffer. Even better if you can get the employer to state the first number, for example if they ask you what your expectations are, you can respond be stating you’d like to understand more about the role and it would be great to know what the range is for the position.
3. Be prepared
Assess what you know about who you will be negotiating with. For example, who is the decision maker, how are decisions made, what are they trying to achieve, what timing is best (when you have high bargaining power, they have time to listen and are in a good mood), when are decisions about raises made (usually 3 months before the performance review).
Don’t delay the negotiation you want to have, the longer the wait the worse the anxiety. Ask before you feel disgruntled and unappreciated, or these feelings could impact your negotiation negatively.
Evaluate how well the company is performing, this could be through public documents on companies gov house, in accounts of publicly traded companies, in annual reports, in online business forums.
Consider your unique skills that you bring to an employer and why you are qualified. Create a 1 page “brag sheet” on your performance to support your number. For example, certain connections, languages, in depth knowledge, leadership skills, knowledge of the organisation, sales targets. Demonstrate how you bring value with evidence, make is as quantifiable as possible.
List your items of request in order of importance, and then you can trade in the lowest priority. Also list what is driving the negotiator and rank these in order of priority as best you can to try to see where you align.
Practice with a mirror or a friend beforehand. Role playing will help you to play out different scenarios, get used to asking, and trying different techniques.
Get a mentor, friend or colleague to coach you through the negotiations, to remind you what you are worth and to stick to your plan.
4. During the negotiation
Have some key phrases or questions ready as responses to common questions (e.g. can you help me understand your reaction, why don’t we use some imagination to figure this out).
Make sure you are in the best frame of mind for you, (e.g. well rested, after exercise, in your best outfit). Just prior to going in recall a situation when you felt powerful.
Carry the negotiation out face to face where possible, ensuring to confirm an accurate written summary of what was agreed before leaving the meeting. If needed ask for extra time, clarification, a break or to return to the negotiation a little later.
Take in notes, your “brag sheet” or other useful documents.
Try to get a win-win situation, using cooperative bargaining, which tends to lead to better outcomes. Work together to find a mutually beneficial satisfactory solution. This may also lead to identifying additional resources or benefits that could be used to reach an agreement, for example extra holiday days or hiring a direct report. It is not all about the salary.
Use an interest-based approach – uncover what is driving each negotiator, and determine ways to meet those goals, particularly the goals in common (e.g. for employees to feel appreciated and therefore productive). Ask open ended questions or volunteer information which will prompt them to do the same, and listen carefully. This will involve behaving more like partners. Could you open with a more indirect approach, such as by stating you would like more challenges and have more ways to contribute. Ask what the thinking is behind the offer, or the background on how it was put together.
Be prepared to compromise. Remember if you have included buffer for negotiations you will have to room to come down. Be prepared to hear a no, smile and continue the negotiation.
Negotiate as savvy for yourself as you would for someone else. Often individuals are more effective and feel more comfortable advocating for someone else. Imagine you are negotiating for your sister or best friend. This does not mean being aggressive, particularly if you are female, it is important to be likeable. Frame your points in a positive way and avoid ultimatums. Use open and warm body language.