3 Ways to Negotiate A Better Salary -- Even In A Recession
$5,000 More Now, $600,000 More Later
A study by Michelle Marks of George Mason University and Crystal Harold of Temple University surveyed employees in a number of jobs/industries, and found that those who chose to negotiate (rather than merely accepting the company's first offer) got an average of $5,000 more in annual pay. And that starting pay has a compound effect. Say two people start at the same time, both getting offers of $50,000. One accepts the $50,000, and the other negotiates up to $55,000. Now, further assume that they each get the same percentage raises throughout a career, and the one who started at the higher salary ends up with $600,000 more over a 40-year career. That's right: $600,000.
Now do you see why negotiating is a good idea? Here are three tips to ensure the negotiations go smoothly.
1. Have a valid business reason for asking for more.
While your true reasons for wanting more pay are personal, the company isn't going to see its way to give you a bump in starting salary unless you can show them why it's in their best interest.
Example: A CareerHMO client of mine got offered a job where the starting pay was $7,000 less than what she needed to be able to live. She loved the company, but if she took the job at the proposed salary, she would have to find a second, part-time job to cover the rest of her expenses. We discussed the best way to present this problem to the employer. When she contacted the hiring manager, she cited the fact that she wanted to be 110 percent committed to the company and not worry about having to leave work for a second job. The hiring manager agreed that she was far too valuable and appreciated her honesty. Better still, the company agreed to a $7,000 increase.
2. Show gratitude first and last.
If you've ever been in customer service before, you know it's far easier to help someone who is being grateful than someone who is being ungrateful. If you get an offer that is disappointing, the last thing you should do is show your disappointment. Before you introduce your request for more pay, be sure to open the conversation with your gratitude for the offer and excitement about working for the company. The employer needs to hear that you see yourself as a member of the team. Then you can introduce your valid business reason for needing more pay. After which, you should again stress how much you are looking forward to joining the team. This will make investing in a higher starting salary more palatable to the employer. In a time when unemployment is at an all-time high, not showing respect and appreciation for receiving an offer will kill any chances of you getting more pay.
A CEO I know recently told me about a 30-something who was offered a job with his firm at $70,000 a year. The candidate was making the same salary at his current job, but he was making a lateral move to the CEO's organization, which was much larger and had a lot more employee benefits and perks. Additionally, the opportunity for growth was significant for this candidate in the coming years. However, instead of showing gratitude, the potential employee said, "Wow. That's not what I was expecting at all. Why is the pay so low? Can't you go any higher?" Needless to say, the CEO rescinded the offer.
3. Be prepared for a 'no.'
Even with the valid business reason and gratitude, you may get 'no' for an answer. I always coach candidates to have contingency options ready to discuss with the employer. The reality is that some companies just can't offer more in salary, but they may have other ways to offer compensation. For example, when the employer couldn't meet her starting salary needs, I once helped a client negotiate the ability to bring her dog to work, as well as the opportunity to work one day/week from home. Your potential new employer wants you to feel good about the agreement you are entering in with them. It's not hard to figure out that hiring someone who isn't satisfied with the arrangement will only result in the employee leaving the first chance they get. So, now is your chance to see if alternative ways to compensate you are possible; if not now, then perhaps in the near future.
Example: If the company has a set salary for the position they've offered you, see if they can give you a three- or six-month review for a salary increase instead of a one-year review. Ask them to put it in your employment contract so you can be sure the review occurs. Then, it's up to you to make sure you prove your worth in that time frame!
Negotiating a higher starting salary can be done. The tips above can help you do it successfully. Just remember: If you don't ask, you won't receive.