If you work a full time job as an employee, at one time or another you've probably had to deal with one of the most uncomfortable, but also one of the most important of discussions. The salary negotiation discussion.
Going into a salary negotiation unprepared can mean that you don't get what you deserve when it comes to your paycheck.
By the same token, going in prepared can lead to thousands more in income over the years.
So what are some things you can do to ensure that you get top dollar for your position?
Here's a Money Mastermind Show where we talked in depth about salary negotiation with guest Jason Hull of MyFinancialAnswers.com.
Be Prepared – Know Your Contribution
When going into a performance review, it's your reponsibility to come prepared.
Be ready to delineate just how much your completed projects, increased sales and other projects have meant to the company's bottom line.
After all, companies are in business to make money, and if you can show just how much your contributions have meant to the company, you're much more likely to come out of the office with a raise.
You know they'll be asking about your performance, and what you've meant to the company, so be ready to provide them with an answer.
Providing that answer may mean that throughout the year you're keeping a running tally of your contributions to the company, putting dollar figures on projects, and concrete figures for dollars saved, dollars earned, time saved and so on.
Have A Minimum Salary In Mind
When going into your interview, make sure to have a minimum salary in mind that you want to accept.
Do your research and know what range of pay jobs like yours have.
Sites you can use in your salary research:
Use the numbers you find as a starting point, and a jumping off point when discussing your true value.
The Negotiation Purpose? To Show Your Value
Something to keep top of mind when going into a salary negotiation is that your success may depend on you being able to show your employer your true value to the company.
- The purpose of the performance review for you as the employee is to sell yourself and to talk about why you deserve to be paid more.
- Focus not on what the company can do for you (in increased salary), but what value you bring to the company.
- When asking for a raise note your accomplishments, and make them more concrete by giving them a value, be it in time saved, money made, etc. (X project saved 20 man hours/week. Y project increased monthly revenue by 10%)
- In some cases it may even pay to create a list of achievements and talking points you can give to the interviewer to help make the case for a higher salary. The key is to first deliver value, and then claim it at the salary negotiation.
Ask Humbly For A Raise (Don't Demand)
One way to have your salary increase request rejected out of hand is to come in with the wrong attitude.
If you come in with the attitude that you deserve it, and demand the raise without providing sufficient reasoning behind it, you may come off looking entitled and as not a team player.
Instead ask humbly for a raise and be prepared to show how you've done your job as required, and even how you've gone above and beyond – excelling at your job. Anticipate your bosses interests, and show how you can improve things for them. Show just how invaluable you are to the team.
Finally, don't just ask for a raise because you've heard that a coworker has received one. It can come across as whining in that scenario, especially if the other person has come in well prepared for why they should receive a raise, and you haven't.
When it comes time to do the actual salary negotiation, after you've made it clear just how valuable you are to the company, there are some things you can do to improve your chances of getting a raise.
- Let the other side make the first salary offer: When it comes time to talk about an actual salary, it's almost always better to let the employer offer the first number. When the first number is put out there, it sets an anchor price around which you'll end up negotiating. If they go first you can do your best to earn the higher end of the range. If you go first and set the number too low, the employer will say nothing and you'll earn less than you could. It's best to Here's a good post talking about how to answer when they want you to give the first number.
- Repeat the offer, then be quiet: Some have suggested that it's best to listen to the first offer by the employer, to repeat it and then remain silent. They call this “the flinch”. More often than not they'll come back with a higher offer. If not, nothing is lost.
- Make your well researched response: Make a counter-offer that is based on what you know about yourself, the market, and the company. Again, make sure you have done your research ahead of time.
- Close the deal—add some extras. After you've locked in a salary offer, don't forget to negotiate additional benefits. Think about things like extra vacation days, tuition reimbursement, company provided mobile phone or a company car. Getting added benefits can effectively raise your income as well.
Be Thankful No Matter The Outcome
If your salary increase request isn't successful, don't let it cause you to become bitter or immediately start looking for a new job.
Be thankful for the opportunity, and do your best to show your employer that you intend on improving in your job performance.
Take the time moving forward to make sure you're providing true value to your employer, and to keep a tally of your achievements on the job.
Provide value, and then claim it at your next performance review.
Have any of your own salary negotiation tips? Tell us what they are in the comments!