By Emily Elmore | 6 May 2020
This month is all about navigating careers. As COVID-19 uncertainty drags on, you may be looking to boost your compensation in an existing profession. You might want to brush up on your salary negotiation skills as you prepare to take on a new opportunity. Honey, we got you.
First, let’s break down compensation.
You may receive a regular paycheck. You may also receive other wages, bonuses, or benefits. Which of these counts as compensation?
Compensation is the total cash and non-cash payments an employee receives in exchange for their work. Types of compensation can include:
- Base pay (hourly or salary wages)
- Sales commission
- Overtime wages
- Tip income
- Bonus pay
- Recognition or merit pay
- Benefits (insurances, standard vacation policy, retirement)
- Stock options
Keep this in mind if you’re negotiating your salary and the company can’t offer a higher paycheck. You may be able to discuss these other forms of compensation.
Going into the negotiation: know your value.
You can bet that your employer knows how much your position is worth, and you should too. Do your research and determine the range of compensation for a position with your level of experience and accomplishment.
You can do this by searching sites such as Payscale or Glassdoor. Or, ask others in your field (ideally both men and women, to avoid falling victim to the gender pay gap).
Once you know your value, you’re ready to meet with HR to negotiate your salary.
Pick a number at the top end of your range.
“What if I’m not worth the value at the top end of the range?” you ask.
Your boss (or HR) will let you know. Then, you do your best to convince them why you are. Depending on how convincing you are, they’ll accept or counter. If they aren’t willing to change their initial offer, the company could still sweeten the deal by including the additional forms of compensation listed earlier.
It’s critical to avoid giving a range when negotiating. “I’m looking for $45,000 – $50,000,” tells the other party in five words that you’re willing to concede. Instead, consider using a phrase like, “Based on my prior experience and ability to solve X problem, I believe I’m worth an annual salary of $48,750.”
Pro tip: Impress HR professionals by using an exact number. This demonstrates that you’ve done your research. Multiple business studies show that new hires are more likely to receive a salary closer to their desired figure when they used an exact number that was within the range for their position based on location and experience.
Asking for a raise? Prepare a brag sheet.
If you’re a new hire, your brag sheet is your resume. If you’re asking for a base pay raise or requesting an additional form of compensation, you’ll want to prepare a brag sheet. This sheet should be a single page demonstrating exactly why you’re awesome and deserve higher compensation. It should include accomplishments, awards, projects, leadership, etc.
You can get more tips and tricks for asking for (and getting) the raise you deserve here.
New hire? Ask questions.
Often, new hires arrive and wait for the litany of interview questions to begin. What’s your biggest strength? Weakness? List a time you succeeded when leading a team. Do the same for a time when you failed.
If you can answer these questions framed to meet your employer’s needs, you’re more likely to get the job and your desired compensation. Set yourself up for success by asking your own diagnostic questions to understand more about their needs, desires, fears, preferences, and priorities. Take it from Professor Leigh Thompson of the Kellogg School of Business at Northwestern University. 93% of all negotiators fail to ask these “diagnostic questions” in circumstances where getting them answered would significantly improve negotiation outcomes.
Asking questions like, “What are your biggest priorities right now?” can help you understand where your negotiation partner is coming from—and offer solutions that will help. Start with these questions. Then, use the responses to bolster your value when you make your ask.
Prioritize Your Requests
As part of your conversation, rank everything you’re looking for and lay it on the table in that order.
Wharton professor and author Adam Grant explains, “In a job offer negotiation, for example, you might say that salary is most important to you, followed by location, and then vacation time and signing bonus. Research shows that rank-ordering is a powerful way to help your counterparts understand your interests without giving away too much information. You can then ask them to share their priorities, and look for opportunities for mutually beneficial tradeoffs: both sides win on the issues that are most important to them.”
If they’re unwilling or unable to increase their salary offer, you may have an opportunity to discuss more vacation days or a bonus. Both are additional forms of compensation and should be clearly identified and considered as part of your compensation package before negotiation.
Be willing to walk away.
In addition to considering an acceptable salary range, you should also determine a number that is NOT acceptable: your walk-away point. You’ll reach this point when the final offer is so low that you must turn it down. This could be based on financial need, market value, or the amount you’ve deemed necessary to feel good about your take-home salary. You know your worth, and saying “no” is a powerful tool to use judiciously. It’s important to be confident in your ability to walk away, even if it isn’t easy.
Related Reads:
10 Ways to Start Over in a Career You’ll Love
Ask the Money Coach: What Money Lessons Should I Know By 25?
What Should I Know For My First Job
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