Salary Negotiation: The Only Guide You’ll Ever Need

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Ready to be a salary negotiation master?

A salary negotiation is quite possibly the best way for anyone with a typical career to earn more money. Think about it. Where else can you land an extra $10,000 or more from 5 minutes of conversation?

Taking the time to execute a salary negotiation the right way will provide you with an earnings boost that you can enjoy year after year.

There’s just one problem. No one ever tells you what to say!

Well that’s about to change.

I spoke with some of the world’s leading experts on salary negotiation. We covered the absolute best salary negotiation tactics and strategies and I’ve laid all of them out for you in this article.

I’ve condensed everything you need to know into 5 simple steps.

1. Do your homework and practice.

No one wants to hear this, but most salary negotiations are won long before you walk in the door. Everyone wants a secret line or a magic phrase to earn an extra $10,000, but it doesn’t matter what you say if you haven’t practiced beforehand.

Mock interviews, practice answers, and whatever other preparation you can do is critical because you will be better equipped to adapt during the interview. You can pay more attention to what the recruiter is saying — and thus discover what is important to them — if you are already comfortable with your own answers.

Know what you’re willing to accept before you walk in the door.

Many candidates never give themselves a chance to negotiate a better salary because they don’t spend enough time thinking about it beforehand.

Take some time and consider the compensation that you would be happy with receiving. What number would walk away from because it’s too low for you?

Don’t get locked in a bad position because you’re not sure what you are willing to accept in the first place.

Know what you’re worth.

Whether you’re thinking about interviewing for a new job or not, it’s always a good idea to know what the going rate is for your position. Spend some time researching the average salary for your job.

Go to PayScale or Vault and get as much data as you can on the current salary range. Salary surveys from the National Association of Colleges and Employers are another great resource.

Reach out and talk to people at similar positions in your industry. If they are willing to tell you, find out what they make. Keep the conversation relaxed and simply ask, “What kind of salary could someone like me expect at your company?”

Plus, it’s good to network with people in your industry anyway, right?

Keep track of what you have done well.

The greatest tool that you have in any interview is proof.

Keep examples of your best work, thank you notes from clients, awards or recognitions, and positive work evaluations. Once you discover what is important to the company and how your skills can meet those needs, you can then use these items as proof of the value that you can provide.

It’s a lot easier to get a higher salary when you have proof of why you deserve it.

2. Realize what it’s like on the other side of the table.

The primary goal of any business is to stay in business. That means what any company is capable of paying you is directly tied to their overall financial performance.

The financial position of the company matters.

Let’s say that both Apple and General Motors have positions that they need to fill. You can be sure that Apple will have much more flexibility with what they can pay for those new positions.

Where are you interviewing? How is that company doing financially? Some companies simply don’t have much flexibility.

Personality is a crucial characteristic.

Yes, your education and experience matter. So do a variety of other factors like company size, geographic location, and the industry. However, your personality and the way you approach the interview can be the most important of all.

You goal should be to come across as friendly and reasonable. If you live in Milwaukee and request a salary that would be on the high end in San Francisco, then you’re going to come across as egotistical and insulting. The type of person that makes unreasonable requests is more likely to be a high maintenance employee. That’s exactly what managers don’t want. (As we will see later, you can still negotiate for huge gains without seeming unreasonable.)

The company is worried about base salary.

There is usually some wiggle room in base salary (perhaps $5,000 or $10,000), but not a ton.

Here’s why:

If two current employees are getting paid X, then the company doesn’t want to pay you Y. Salary information is rarely kept a secret for long and it’s a serious risk to the culture of the company to create large gaps in salary pay at the same position. From the company’s position it’s a recipe for jealousy.

The recruiter has less control that you think.

The typical recruiter almost never has the ability to make the final decision on your compensation package. After you negotiate with them, they will need to go back and confirm the package with a hiring manager or another supervisor.

In other words, the recruiter is going to sell you to the hiring manager. It’s up to them to communicate why you deserve a higher salary. You want their support because they are going to need to sell you.

You can help the recruiter out by giving them justification for the items you are asking for and by not coming across as greedy or egotistical.

In short, be nice and give clear reasons for the salary increases you are requesting. You’re not battling against them. You’re working with them.

3. Discover how you can provide value.

It’s going to take some time and effort, but if you can find out how you can address the specific needs of a company, then you will have significantly more leverage when you start to talk about your salary.

A great way to find out what the company really needs is to talk with a few current employees at the company. Even if you’re out of town, you can easily find many of them on LinkedIn.

When doing preliminary research like this, don’t spend too much time talking about yourself. Let them know that you are interested in working at the company and you’re curious about the types of projects they are currently working on. Focus on finding out what’s important to them.

Once you know what they need, you can highlight the benefits you provide and not simply the skills you have. You need to understand their needs so that you can frame your abilities in a way that shows the value you can provide to the company.

The more specific you can get with this process, the better off you will be. Clearly outline the relationships that you have, the projects you will lead, and the experience you bring and how that solves a need for them.

One way to find out what they need (and you can even do this in the interview) is by using the following phrase.

“What’s really important to the company within the first 90 days of me joining?”

Questions like this hone in on specific pain points for the company. All you need to do then is show how your experience and skills can solve those pain points.

4. Never be the first to budge.

The single biggest mistake that most candidates make when comes to salary negotiation is telling the recruiter what they would be willing to accept.

Most candidates don’t like being pressured, so they simply blurt out a number they are willing to take — but you should never be the first one to name a number.

One way to avoid this common mistake is to ask about the salary range the very first time you meet a recruiter or hiring manager.

Here are some phrases to help with this:

“What is your salary range for someone in this position?”

If you meet the recruiter at a networking event or during some type of preliminary recruitment phase, then you can ask them right away, “What is your salary range for someone in this position?”

If you don’t have the chance to ask beforehand, then you can bring it up at the start of your interview. Recruiters will typically start off with a phrase like, “Do you have any questions before we begin?” That’s your cue to ask about the salary range before the conversation gets more serious.

After you get an answer keep it in mind for later and move on to the rest of the interview. When the time comes, it will be much easier to negotiate your way to the top of the salary range because you know already know where it is.

The recruiter may ask something like, “Will that work for you?” or “Does that sound like something that will work?”

Unless the range is too low for your tastes, you can just play it slow at this point.

“Do you have any flexibility in that number?”

Using phrases like this one allow you to make some progress without revealing your expectations. Here’s an example of how it might play out in an interview.

You: “What is your salary range for someone in this position?”

Recruiter: “$30,000 to $35,000. Does that work for you?”

You: “Perhaps, do you have any flexibility in that number?”

Recruiter: “Possibly.”

You: “If we decide that I’m the right person for the job, I’m sure we can agree on compensation.”

… And off you go to the rest of the interview.

If you haven’t asked about salary beforehand, then it’s likely that most employers will try to get you to state a number before they do.

Don’t do it.

You are under no obligation to reveal what you made at your last job and you should not name a number first. In fact, naming a number or referring to your previous salary is actually irrelevant because this is a new job with new circumstances.

Plus, if you say something too high, then they will think that they can’t afford you. If you say something too low, then they will think you’re unqualified — or they’ll jump at the chance to underpay you.

Do yourself a favor and avoid naming a number first, even if they pressure you.

“I’m going to need more information about the job…”

Ask for more information if the hiring manager asks something along the lines of, “What is your current salary?” or “What type of pay do expect for this position?”

For example, “I’m afraid I’ll need more information about the job and the total benefits before I can name a number. What type of range has the company set for this position?”

Remember, this isn’t an argument. Your tone should be curious, not stubborn.

It takes courage, but you are not required to reveal any information about your current salary.

5. Ask for more than they can give.

[Give credit where credit is due. Many of these tips are courtesy of the genius of Chuck Csizmar of CMC Compensation Group]

There is low hanging fruit in every salary negotiation. Sometimes the recruiter will try to sell you on what these “gold mines” are without giving you all of the information necessary.

For example, they might try to sell you on an unquantified dollar amount. “We’re giving you 5000 stock options.”

“That sounds really good. What’s the present value of that?”

Make them quantify all aspects of the compensation package that they provide you.

If they tell you about the annual incentive plan find out the monetary details. “How does the plan work? What’s the typical payout?” If they tell you that it pays 20%, then find out more. “Is that the average? Can you give me an idea of what the usual payout has been over the last 3 years?”

Don’t settle for general percentages or figures. You can be sure that every single piece of the package has a dollar amount assigned to it … and they know what that number is. Just ask and then you can add everything up in dollar amounts.

Some perks will be easy for the company to give, while others they won’t be able to budge on.

A great way to land these easy bonuses is to ask for more than the company can give.

For example, companies often have strict policies about annual incentive plans or vacation days. (If they started making exceptions in those areas, then they would have some jealousy employees on their hands.)

On the flip side, most salary ranges have a bit of flexibility and adding a boost through a signing bonus is a pretty easy adjustment for a hiring manager.

As an example, let’s say you’re offered $70,000. In your first counter offer you might ask for a salary $5,000 higher than what was originally offered, a signing bonus of $10,000, 5 more vacation days, and no waiting period on 401k matching.

In all likelihood, the recruiter will counter by saying that while the 401k and vacation can’t be offered, they will be able to provide a higher salary and a $5,000 signing bonus. Done and done. You just made an extra $10,000 from a few minutes of conversation.

Other perks that you might have success with include:

  • Ask to start at a higher pay grade. For example, $60,000 might be at the top of your current pay grade, but at the bottom of the next one. Ask to start one level up and you can get a raise without getting a promotion.
  • Accept the lower salary, but ask for a raise after 6 months instead of the typical yearly cycle.

Here are some phrases to help you as you make your counter offers.

“I’m a bit disappointed…”

This is a good one to use when revealing your initial thoughts about a compensation package.

For example, ”I’m really excited about the position and the upcoming projects. I’m just a little disappointed with the offer. Can we talk about a few of those items?”

“We ___”

Using the word “we” is a great way to make a negotiation more pleasant. Your goal should always be to have a cooperative discussion, not an adversarial argument.

For example,

Recruiter: “We’ve decided to offer you $30,000 starting out.”

You: “That sounds like a good starting place. What can we do to get to $35,000?”

“Let’s review this after 3 months.”

Let’s say that you’re confident that you should be paid more, but they just won’t budge.

If you know that you will do a great job then you can offer to work as a contractor at their proposed rate for a few months. Then, you can have another salary review (after you have proved your worth) and typically you can land a higher salary.

This tactic isn’t as risky as you might think. Yes, you’ll need to work very hard for those few months, but you will also be making it very easy for them to see why you should be paid more. Additionally, they have much more invested in you (three months of training, relationships, etc.).

That means you’re in a better position to ask for more money.

“Can we get that in writing?”

If you negotiate for any significant win, then make sure you get it in writing.

This is especially true of any upcoming events. For example, if you negotiated for your first raise to come after 6 months instead of a year, then make sure that you have proof of that.

Things to remember

If you don’t ask for a higher salary, then the answer is always no.

Yes, it’s work. Yes, it requires some courage to push back with a recruiter. However, it’s far better to ask and be turned down than not to ask at all.

Getting what you want doesn’t mean you need to act like a jerk. Furthermore, you’re not going to lose an offer because you tried to negotiate for a higher salary. The recruiter is expecting you to negotiate.

If you want to keep it really simple, then just smile and ask for what you want while offering some proof to back up your request.

Money can’t buy you happiness.

If you’re deciding between two jobs and the one you want pays less … don’t chase that extra $5,000 or whatever it may be. Over the long term you’ll be able to make up the difference by doing excellent work in an environment you love.

You’ll always find a way to make the money work. Stick with happiness.

Looking for more?

I put together a full list of more general negotiation tactics and strategies that you might also find useful.

For advanced negotiation strategies and tips on earning more, join Passive Panda’s Free Newsletter.

A special thanks to Chuck Csizmar, Jeff Goldberg, Jim Hornickel, Layne Kertamus, and Keesha Parsons who were all consulted for advice for this article.

19 Responses to Salary Negotiation: The Only Guide You’ll Ever Need

  1. Prashant BalaDhanvi says:

    A little too idealistic in terms of the content.. on the field when you are negotiating compensation.. the situation is surely different.

    • James Clear says:

      Thank you for your input, Prashant.

      Not all these tips will work in every situation, but limiting beliefs such as “the situation is surely different” are often more of a barrier than actual tactics.

      I think if you give some of them a try, then you’ll find more success than you might expect.

      • Capt Oscar Sequeira says:

        Great inputs James… I agree with you on your tips,that you have given. Would like to add that today employers are a bit belligerant and downright annoying right at the start of negotiations, and it requires a mature prospective candidate to endure and come out successful.

      • Boxerman says:

        One could get rejected if he/she demands more salary and could lead to a situation where even working at a lower salary becomes impossible. (i.e., he cannot even work for an initial amount put forward by HR Manager) Hence it is tricky to talk anything with recruiters and the best way to hit them is by showing your client appreciation letters if you got any.

  2. Talent DO shape what happens in a salary discussion and what this article outlines is very realistic. I think what Prashant may be referring to is that the effective words to use to say these things are not fully detailed in this post. If you know when and how to speak your part, you can as much as double the initial offer, and the company is happy to do it. But the basic points in this article are absolutely correct, and match what I as a 20-year expert advise my clients.

  3. Also, what I have found is that telling people what to say or even the stages of a salary negotiation and the whys behind it all, doesn’t mean they go implement well. They need encouragement and practice. Then they understand and they go do it. I may work with someone four times during a salary negotiation.

    Your perceived value starts being formed way before the offer phase. Every phase is under the candidate’s control, right from whether the boss has heard of you before, to what he thinks you do well, to whether he believes you can produce the outcomes he values. Salary talks are too late to start practicing using your career communication powers. Salary negotiations are much more comfortable if you become accustomed to asking questions of and talking shop with the bosses you intend to go work for, before you ever need the new job.

    It seemed almost like you were quoting my playbook with this article so I was so excited this good stuff was being publicly shared, I had to write in!

  4. Kapil says:

    Hi James,

    Hows it going my friend? Nice to read the article, but a couple of days late for me – I just negotiated a new job and salary! :)

    Anyway, I think you make some good points..ultimately good preparation using your network / resources, displaying your value during the interview process and trying to get to a win-win situation when talking numbers are the three main components – and I think you cover them well.

    Some practical tips will differ from industry to industry and market to market I think, but overall an interesting article indeed! :)

    Cheers,
    Kapil

    • James Clear says:

      Kapil! Great to hear from you buddy. Congrats on the new job! You’ll have to fill me in on the details.

      I need to get across the pond again soon. Maybe we can come with an excuse to visit the pub?

      • Heather says:

        What about when you’ve already done the online application and gave away exact numbers of your previous salary and salary expectations? Does that leave any room for negotiations?

  5. Shaleen Shah says:

    Now, you’re giving away the secrets of those who are into hiring people for their team. I have to agree on all your points here, especially item #4. Sometimes, employers are just waiting for you to give out a number and most often, applicants are doing it at their own risk. Someone really needs to be good at an elevator pitch to pull off a successful negotiation when it comes to how much one should be paid for.

  6. James, I think this article is well written and gives several good points. I work with clients as a Career Counselor, and I have given several of these nuggets of wisdom myself. I really want to specifically point out the fact money does NOT buy happiness – I could not agree more emphatically. You should be looking at the fit with the organization long before salary negotiations. No amount of money makes “that guy” any easier to work with or for….

    Mary made a great point, that knowledge and skill are separate items. I mention the fact you learn to ride a bicycle by getting on and trying, this is no different. Practice, measure your mistakes, and accept you will make some mistakes along the way.

  7. Razwana says:

    James,

    Interesting post. It is definitely easier to negotiate salary when you are offered a job, than when you are in a job and looking for an increase. A lot of people (including me) make the mistake of naming their price first. I didn’t do that in my last interview and was pleasantly surprised.

    - Razwana

  8. Lovely Chu says:

    Yes. You nailed it. It’s been a while since I looked for this kind of article-salary negotiations. Very big help to us, especially with the right script you mentioned above. Tip #4 says it all. Thank you.

  9. This is very helpful post for everyone because everyone has to face the salary negotiation in any kind of firm. So with this post you can easily deal with issue. Nice work.. Great Job..

  10. Ellen says:

    Love how thorough with sample statements this article is! Thanks for sharing your ideas. I would also add that practicing the negotiation conversation is super important.

  11. Melissa says:

    Very, very helpful. I’m in the middle of negotiations and the work day ended and no phone call back. I’m really freaking out. Any advice?

    Also what are the odds that they pull back and retract the offer altogether? I was given advice by the two people interviewing me about negotiations and I have been following
    it by the book, but I think they are low balling me because I made the huge mistake of naming a number first. Sorry, I really want this job so badly however I also want a fair salary. Any advice?

  12. Bagus says:

    Thanks a million times for sharing this. I started a new job search shortly after I first read this. I like my job but not my pay packet. I have been told I’m almost certain to be promoted in the next round (April). I still have difficulty with not providing a number within a range when asked. I know many of you will jump that I am putting myself at a disadvantage.

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