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5 Key Steps To Negotiating a Great Salary

Business meeting - salary negotiation

If you’re not already familiar with the process of negotiating your salary, it’s time to change that. Salary negotiation can significantly impact your pay and increase your overall satisfaction with your job. 

Talking about money can be challenging, whether negotiating your starting salary or asking for a raise. Many people don’t negotiate their salaries or ask for a raise. A recent survey of 3,000 employees in the UK found that 55% of people are unwilling to ask for a raise because they don’t know what to say, are worried about appearing greedy, or are simply afraid to approach the topic. 

In this article, we will teach you how to negotiate your salary for your next position successfully. However, you can also use these tips to negotiate a raise in your current job as salary negotiation doesn’t just happen at the beginning of your employment but can occur at many stages throughout your career progression.

Table of Contents
Why salary negotiation is important
5 steps to negotiating a great salary
The bottom line

Salary projections - why salary negotiation is important

Why salary negotiation is important

Salary negotiation can significantly affect the amount of money you make over time and, as a result, your overall satisfaction with your job. Research suggests that in the US, workers could earn approximately $7,500 more per year if they better negotiated their salary when hired (this could amount to $600,000 over a career). 

Why is this the case?

Initial salary negotiation is when you have the most bargaining power. Typically, employers are willing to give employees an annual raise of between 2% and 4%. When workers switch positions within the same field, they can often get a 10% to 20% raise

Forecasted salary

5 steps to negotiating a great salary 

Get prepared

If negotiating your salary sounds scary, the best way to mitigate that fear is to go into the negotiation prepared. 

Start by determining the market rate for the position. You can do this by searching online (with Payscale or Glassdoor) or by asking others in the field. Knowing the market rate for the job gives you a good starting place when it comes to negotiation and allows you to determine the target range you would like to ask for. It can also be helpful to research the specific company to see how they are doing financially, how well established they are, and what types of salaries they offer current employees, if you can find out. 

Note: When negotiating your salary, you should ask for a specific number, according to researchers at Columbia Business School, i.e. $64,750 rather than $65,000. This is because the employer will know you’ve done your research, so you’re more likely to get a final offer closer to what you were hoping for.

Once you’ve done your research, take some time to prepare your presentation. This process could look different person-to-person and may include: writing out some of your talking points, building your confidence, and practicing your negotiation with others. 

Building confidence before negotiating your salary can make a big difference in the conversation. Remember that the employer is bringing you in for this conversation because you have the qualifications they are looking for, and you deserve to be fairly compensated for your work. Consider writing out your qualifications and accomplishments to build confidence. 

Practice with a trusted friend or family member. Practicing what you want to say out loud can make it feel less scary. You may even want to practice overly exaggerating the amount you ask for so the number you actually ask for sounds much more reasonable. For example, have your friend ask about your expected salary and say ‘$1,000 per hour’ or ‘$800,000 a year’.

Plan the right timing

As we mentioned previously, salary negotiation doesn’t only occur when you’re hired for a new position. Salary negotiation can and should take place at various points in your career, such as at yearly performance reviews, when your job title or position changes, or when the market changes. 

When negotiating your salary, timing can make a big difference. Many people wait until performance reviews to ask for a raise in their salary, but by that time, your employer has likely already decided what raises will be doled out to the team, so you have less negotiating power. Instead, start talking to your boss about negotiating your salary three to four months before your expected review – this is when they’re likely to decide the budget. 

When you book the meeting can also make a difference when it comes to negotiating. Psychology Today reports that most people start off the week more hard-nosed and disagreeable but become more flexible as the week goes on – so the best time to set a meeting is Thursday. Thursday is more ideal than Friday because people are eager for the weekend at the end of the week. 

Time of the day can also make a difference in negotiation. Around 10 or 11 am is early enough that people are not yet fatigued by work but late enough that they’ve had their coffee, feel settled in, and have likely dealt with any pressing issues for the day. 

Starting the conversation

Before you go into the meeting, do a few final things to boost your confidence and set yourself up for success:

Confidence going into a business meeting

How to negotiate

Even if salary negotiation is one of the main goals of the meeting and something you’re nervous about, don’t jump right into salary negotiation right at the beginning. 

Start with questions

Start with questions to understand the other party’s needs, desires, fears, preferences, and priorities. For example, asking, “What are your biggest priorities right now?” can help you better understand where the other party is coming from and offer solutions that will help.

Take the time to discuss your qualifications, previous accomplishments, and what you’re looking forward to achieving in the new position. 

Give a number

When you talk about money, always start with the higher range of the value you researched and more than what you want to allow for room to negotiate. Remember to provide a specific value and not a range. 

Don’t forget to listen during the negotiation. Hearing what the other person says in reaction to your request can help you understand their needs, and you can use this to help find a solution that makes all parties happy. 

If you’re starting a new position, outline your qualifications. If you’re seeking a raise, reflect on what you’ve achieved in your role and your value to the company. This is the best way to convince your employer you deserve the salary you’re seeking. Focus on your performance and achievements – don’t mention your personal needs.

Counter

Once you’ve given the number you’d like for your salary, this is where the negotiation begins. 

If they provide a number first and it’s lower than you thought, give yourself time to consider their offer without answering – don’t say ‘ok’ right off the bat. 

Be kind but firm when negotiating. For example, “I’m excited to work here, and I know I will bring great value. I appreciate the offer of $55,000, but I expected it to be in the $65,000 range based on my experience and performance. Can we discuss a salary of $65,000 for this position?”

The employer may say no initially or counter you with a lower number. Don’t be afraid to counter back – however, balance persistence with flexibility. For example, “I understand where you’re coming from. I want to reiterate my enthusiasm for the position and for working as part of this team. I think my skills are perfectly suited for this position and worth $65,000.”

Giving a number first can sometimes be advantageous as you won’t have to attempt to negotiate them up if they present a number lower than your initial range. However, if you provide a number first and you’re new to negotiating, you may feel inclined to give a lower number – this could result in an immediate acceptance because they expected to pay more. 

If you do your research, know the market rate for the position and understand the company, you should have a good idea of their budget and a good starting place for negotiation. 

Hopefully, by the end of the conversation you can agree on a number within the range you started with and that both parties are happy with. 

Hand shake

What if you get a no?

If you can’t find a salary that you are both comfortable with, you may need to walk away. It’s essential to go into conversations like this, knowing that walking away is a valid option. 

Remember that this is a negotiation process, and you should prioritize your request by countering your employer’s offer or attempting to convince them by showing them your value if you initially get a no. 

If the employer is unable or unwilling to meet your salary expectations, you can try negotiating for flex time, remote workdays, more vacation time or other paid time off, a better title, or stock options. But it’s important not simply to take these possible perks because you feel pressured to. Take some time to think about what you would be willing to settle for before you enter the negotiation process. 

The bottom line

Salary negotiation is challenging for most people, so don’t worry if you’re nervous or if the negotiation doesn’t go as smoothly as you’d hoped. All you can do is research, prepare your presentation and be confident in what you bring to the company. 

Also, remember that if you are dissatisfied with your current position or your attempts to get a raise were unsuccessful or did not meet your expectations, you are more likely to get a larger pay increase by changing jobs.

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