Give Me More Money!
Smart Salary Negotiating Skills for Talking Money to Power
Are you underpaid by 10-15%? If you are, it’s probably because (1) you failed to properly negotiate a starting salary, and (2) you’re reluctant to ask for raises. If you’re a woman, your salary situation may be even worse.
Perhaps it’s time to correct this situation. Start by understanding the fine art of talking money to power. You need to develop salary negotiating skills before accepting a job offer as well as asking for raises. Being underpaid shouldn’t happen to you if you follow some basic tips for talking money to power.
Let’s get started by checking out 20 common salary mistakes to avoid in the process of developing smart negotiation skills.
Avoid These 20 Salary Mistakes
Job seekers make several salary negotiation errors, which often result in knocking them out of further consideration, or they receive a lower salary than what they could have gotten had they followed a few proven salary tips. Several of these errors also may leave a bad impression – you have a poor attitude, you’re “difficult,” or you’re a self-centered job seeker primarily focused on salary and benefits rather than on employers’ performance needs. Make sure you don’t commit these errors:
- Engage in wishful thinking – believe you’re worth more than you are worth.
- Appear to be a clever and manipulative person playing games.
- Neglect to research salary options and comparables.
- Fail to communicate accomplishments when talking about money.
- Reveal salary expectations on the resume or in a letter.
- Answer “What are your salary requirements?” before being offered the job.
- Raise the salary question before the employer does.
- Fail to ask “value” questions about the company and job.
- Ask “Is this offer negotiable?”
- Quickly accept the first offer without considering options.
- Accept the offer on the spot.
- Agree to the offer primarily because of compensation.
- Try to negotiate compensation during the first interview.
- Forget to consider benefits and thus only focus on salary.
- Negotiate a salary figure rather than discuss a salary range.
- Haggle over the telephone or by email.
- Focus on your needs rather than the employer’s needs.
- Play “hardball” by mentioning alternative offers, which may or may not be true.
- Express a negative attitude toward the employer’s offer.
- Talk too much and listen too little.
What’s Your Value?
So what are you really worth in today’s job market? Do you know based upon your research about “compensation facts,” or are your expectations a form of wishful thinking? What about benefits? What do you expect and how much are they worth on top of your salary? Will you accept an offer that’s too low or self-destruct by asking too much? Are you uncomfortable talking about money and thus tend to accept whatever is initially offered?
Salary and Benefit Flexibility
Just how negotiable are salaries? If you are interviewing for a job as a laborer or for an entry-level position, chances are salary and benefits will be set and you’ll have little room to use your salary negotiating skills. Since competition will be high for such positions, employers see no need to negotiate. It’s a “take it or leave it” situation. However, you may be able to negotiate the hours you work, including any overtime, but only if you have skills the employer needs. For higher-level jobs, salary is seldom predetermined. Most employers have some flexibility to negotiate salary and benefits. Indeed, the general compensation principle is this:
The greater the job responsibilities and experience required, the more flexibility you
and the employer have to negotiate salary and benefits.
When to Raise the Money Question
The question of wages/salary may be raised anytime when talking to prospective employers. In fact, employers may want you to state a salary expectation figure on an application form, in a cover letter, or over the telephone. Most frequently, however, employers will ask about salary during the employment interview.
If at all possible, keep the wage/salary question open until the very end of the last interview. Revealing your hand early in the interview will not be to your advantage. Even with application forms, cover letters, and telephone screening interviews, try to delay the discussion of money by stating “open” or “negotiable.” After all, the ultimate purpose of your job search activities is to demonstrate your value to employers. You should not attempt to translate your value into dollar figures until you have had a chance to convince the employer of your worth. This is best done near the end of the job interview, preferably after you have received a job offer.
Although employers will have a salary figure or range in mind when they interview you, they still want to know your salary expectations. How much will you cost them? Will it be more or less than the job is worth? Employers prefer hiring individuals at their budgeted figure.
You, on the other hand, want to be hired for as much as possible. Obviously, there is room for disagreement and unhappiness as well as negotiation, compromise, and agreement.
One easy way employers screen you in or out of consideration is to raise the salary question early in the interview. A standard question is: “What are your salary requirements?” When asked, don’t answer with a specific dollar figure. You should aim at establishing your value in the eyes of the employer prior to talking about a figure. If you give the employer a salary figure at this stage, you are likely to lock yourself into it, regardless of how much you impress the employer or what you find out about the duties and responsibilities of the job. Therefore, salary should be the last major item you discuss with the employer.
You should never ask about money prior to being offered the job, even if it is one of your major concerns. Try to let the employer initiate the salary question. And when he or she does, take your time. Don’t appear too anxious. While you may know – based on your previous research – approximately what the employer will offer, try to get the employer to state a figure first. If you do this, you will be in a stronger negotiating position.
Reach Common Ground and Agreement
After finding out what the employer is prepared to offer, you have several choices. First, you can indicate that his or her figure is acceptable to you and thus conclude your final interview. Second, you can haggle for more money in the hope of reaching an acceptable compromise. Third, you can delay final action by asking for more time to consider the figure. Finally, you can tell the employer the figure is unacceptable and leave.
The first and the last options indicate you are either too eager or playing hard-to-get. I recommend the second and third options. If you decide to reach agreement on salary in this interview, negotiate in a professional manner. One way to hone your salary negotiating skills is by establishing a salary range from which to bargain in relation to the employer’s salary range. For example, if the employer indicates that he or she is prepared to offer $50,000 to $55,000 (or $15.50 to $17.00 per hour), you should establish common ground for negotiation by placing your salary or wage range into the employer’s range. Your response to the employer’s stated range might be:
“Yes, that does come near what I was expecting. I was thinking more
in terms of $55,000 to $60,000 (or $17.00 to $19.00 per hour).”
You, in effect, place the top of the employer’s range into the bottom of your range. At this point you should be able to nego
tiate a salary of $55,000 to $60,000 (or a wage rate of $17.00 to $19.00 per hour), depending on how much flexibility the employer has with money. Many employers have more flexibility than they are willing to admit.
Once you place your expectations at the top of the employer’s salary range, you need to emphasize your value with supports, such as examples, illustrations, descriptions, definitions, statistics, comparisons, or testimonials. It is not enough to simply state you were “thinking” in a certain range; you must state why you believe you are worth the salary you want. Using statistics and comparisons as your supports, you might say, for example:
“The salary surveys for this position indicate a salary between $65,000 and $70,000. Since I have extensive experience, I would not need training in the job duties themselves – just a brief orientation to your operating procedures. I’m sure I could be up and running in this job within a week or two. Taking everything into consideration – especially my skills and experience and my projected future contributions – I believe $70,000 is fair. Is that possible?”
Another option is to ask the employer for time to think about the salary offer. You want to consider it for a day or two. A common professional courtesy is to give you at least 48 hours to consider an offer. During this time, you may want to carefully examine the job:
- Is it worth what you are being offered?
- Can you do better?
- What are other employers offering for comparable positions?
If one or two other employers are considering you for a job, let this employer know his or her job is not the only one under consideration. Let the employer know you may be in demand elsewhere. This should give you a better bargaining position. Contact the other employers and let them know you have a job offer and that you would like to have your application status with them clarified before you make any decisions with the other employer. Depending on how much flexibility an employer may have to accelerate a hiring decision, you may be able to go back to the first employer with another job offer. With a second job offer in hand, you should also greatly enhance your bargaining position.
In both recommended options, you need to keep in mind that you should always negotiate from a position of knowledge and strength – not because of need or greed. Learn about salaries for your occupation, establish your value, discover what the employer is willing to pay, and negotiate in a professional manner. The salary negotiating skills you are able to use here will affect your future relations with the employer. In general, applicants who negotiate well will be treated well on the job.
Carefully Examine Benefits
Many employers will try to impress candidates with the benefits offered by the company. These might include retirement, bonuses, stock options, medical and life insurance, and cost of living adjustments. If the employer includes these benefits in the salary negotiations, do not be overly impressed. Most benefits are standard – they come with the job. When negotiating salary, it is best to talk about specific dollar figures. But don’t neglect to both calculate and negotiate benefits. Benefits can translate into a significant portion of one’s compensation. In fact, the U.S. Department of Labor estimates that benefits constitute 43 percent of total compensation for the average worker. For example, a $50,000 offer with Company X may translate into a compensation package worth $60,000; but a $50,000 offer with Company Y may actually be worth more than $70,000 when you examine their different benefits.
If the salary offered by the employer does not meet your expectations, but you still want the job, you might try to negotiate for some benefits which are not considered standard, such as longer paid vacations, some flextime, or profit sharing.
Take Time Before Accepting
You should accept an offer only after reaching a salary agreement. If you jump at an offer, you may appear needy. Take time to consider your options. Remember, you are committing your time and effort in exchange for money and status. Is this the job you really want? Take some time to think about the offer before giving the employer a definite answer. But don’t play hard-to-get and thereby create ill will with your new employer.
While considering the offer, ask yourself some of the same questions you asked at the beginning of your job search:
- What do I want to be doing five years from now?
- How will this job affect my personal life?
- Do I know enough about the employer and the future of this organization?
- How have other people in this position done? Why did they leave?
- Are there other job opportunities that would better meet my goals?
Accepting a job is serious business. If you make a mistake, you could be locked into a very unhappy situation for a long time.
If you receive one job offer while considering another, you will be able to compare relative advantages and disadvantages. You also will have some leverage for negotiating salary and benefits. While you should not play games, let the employer know you have alternative job offers. This communicates that you are in demand, others also know your value, and the employer’s price is not the only one in town. Use this leverage along with your salary negotiating skills to align your salary, benefits, and job responsibilities.
If you get a job offer but you are considering other employers, let the others know you have a job offer. Telephone them to inquire about your status as well as inform them of the job offer. Sometimes this will prompt employers to make a hiring decision sooner than anticipated. In addition you will be informing them that you are in demand; they should seriously consider you before you get away!
Some job seekers play a bluffing game by telling employers they have alternative job offers even though they don’t. Some candidates do this and get away with it. I don’t recommend this approach. Not only is it dishonest, it will work to your disadvantage if the employer learns that you
were lying. But, more important, you should be selling yourself on the basis of your strengths rather than your deceit and greed. If you can’t sell yourself honestly, don’t expect to get along well on the job. When you compromise your integrity, you lower your value to others and yourself.
Your job search is not over with the job offer and acceptance. You need to set the stage. Be thoughtful by sending your new employer a nice thank-you letter. This is one of the most effective letters to write for getting your new job off on the right foot. The employer will remember you as a thoughtful individual whom they look forward to working with.
The whole point of these job search methods is to clearly communicate to employers that you are competent and worthy of being paid top dollar. If you follow this advice, you should do very well with employers during interviews, while using your salary negotiating skills, as well as working on the job.
Useful Resources for Sharpening Your Salary Negotiating Skills
For more information on salary negotiations for both job seekers and employees, see my three salary negotiation books – Give Me More Money!, Salary Negotiation Tips for Professionals, and Get a Raise in 7 Days (Impact Publications). These books outline various steps for calculating your worth and conducting face-to-face negotiations, including numerous sample dialogues. For online assistance with salary information and negotiations, be sure to visit these useful websites: