This month is all about nav.igating careers. As COVID-19 uncertainty drags on, you may be looking to boost your compensation in an existing profession. You might be ready to take on a new opportunity, and want to brush up on your salary negotiation skills. 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 that are received by an employee in exchange for the work they do. Types of compensation may include:
Base pay (hourly or salary wages)
Recognition or merit pay
Benefits (insurances, standard vacation policy, retirement)
Keep this in mind, because 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. You should too. Do your research and determine the range of compensation that exists for your position, with your level of experience and accomplishment.
You can do this by doing an online search on sites such as Payscale or Glassdoor, or by asking 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. And then you do your best to convince them why you are. Depending on how convincing you are, they’ll accept or they’ll counter. If they aren’t willing to change their initial offer, the deal may still be sweetened by those additional forms of compensation listed earlier.
It’s important not to use 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: Using an exact number demonstrates to HR professionals 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 raise in your base pay or requesting some other additional form of compensation, you’ll want to prepare a brag sheet. This sheet should be a single page that demonstrates exactly why you’re awesome and deserving of higher compensation. It should include accomplishments, awards, projects, leadership, etc.
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.
Before you get there, if you can answer these questions framed to meet your employer’s needs, it’s more likely to not only get the job but get your desired compensation. You can set yourself up for success by asking your own diagnostic questions to understand more about their needs, desires, fears, preferences, and priorities. Professor Leigh Thompson at the Kellogg School of Business at Northwestern University says that 93% of all negotiators fail to ask these “diagnostic questions” in circumstances where getting them answered would significantly improve the outcome of negotiations.
Asking questions like, “What are your biggest priorities right now?” can help you understand where your negotiation partner is coming from—and offer up solutions that will help. Start with these questions and use the responses to bolster your value when you make your ask.
Prioritize Your Requests
As part of your conversation, lay everything you’re looking for out on the table in rank order.
Explains Wharton professor Adam Grant on Business Insider, “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 unable or unwilling to increase their salary offer, this is where you may have an opportunity to discuss more vacation days or that bonus. Both are additional forms of compensation and should be clearly identified and considered as part of your compensation package prior to negotiation.
Be willing to walk away.
When considering the salary range you’ll accept, you should also determine a number you will NOT accept: your walk away point. This is the point where the final offer is so low that you have to turn it down. This could be based on financial need, market value, or simply what you need to feel good about the salary you’re bringing home. You know your worth, and saying “no” is a powerful tool. It should be used judiciously, and if it must be used it won’t be easy. However, it’s important to know when to do it and to use it when required.
If this feels like it’s a lot, well, that’s because it is. Don’t worry nav.igator. You’ve got this and we’ve got you. In fact, our (free!) app has a salary negotiation tool built right into it to help you establish the right number and set you up for negotiation success.