An accomplished mechanical engineer, Alex interviewed for a coveted opening at a cutting-edge engineering firm. Although he was used to accepting offered salaries in the past, this time, he decided to use the skills he learned from the steps below.
Alex researched salaries for mechanical engineers with seven years of experience and found that salaries ranged from $80,000 to $110,000 annually. So, when the employer offered $82,000, he knew asking for a higher salary was appropriate.
Although he was nervous, he conveyed his excitement about the job and the research he had done and, based on this, asked for $100,000. To his delight, the employer, impressed by Alex’s diligence and awareness of market values, agreed to the revised salary. This success gave Alex new confidence in negotiating his salary and other aspects of his compensation. You, too, can learn and implement the salary strategies outlined below.
A recent Journal of Organizational Behavior study reports that failing to negotiate on an initial job offer could mean missing out on over $600,000 in salary during a typical career. While it may feel uncomfortable or even stressful, using the keys below can increase your salary for a job offer or in your current job during a performance review.
Secrets of Salary Negotiations
1. Know the salary range you can expect for the position you have targeted.
Not knowing this information is like negotiating a new car without knowing the dealer’s costs. You must know this to negotiate effectively. Here are methods for researching appropriate salary ranges.
2. Remember that pay is negotiable.
Employers usually do not have one particular dollar amount in mind for a position. Instead, they typically have a range (for example, $60,000 to $70,000 a year) within which they will be willing to negotiate. An employer aims to get the right employee for the least amount possible. Their first offer, therefore, is usually not the top dollar they are willing to pay.
3. Only discuss salary (and other benefits) once the employer is interested in hiring you.
The time you have the most power to negotiate is from the time the employer wants you to the time you accept the position. If salary questions are raised early in the interview, attempt to defer the question. However, if the employer insists you answer at that time or are asked after the employer has indicated that they are interested in you, be ready with a response strategy that leaves you room to negotiate.
Here are examples of employer questions and suggested responses:
Employer: “What are your salary requirements?”
If possible, delay the salary discussion until you understand the job responsibilities and the company’s expectations. You can say, “I would like to learn more about the role’s responsibilities before discussing compensation. Could we revisit this topic later in the process?”
Here is another more direct option: “I’m excited about the opportunity to contribute to the team’s success. Before discussing specific numbers, I would like to know more about the responsibilities and expectations of the role. However, based on my research and experience, I’m targeting a salary of $X to $Y. If I’m the right fit for the job, I’m open to negotiating, and I hope we can find a compensation package that reflects the value I can bring to the company. What is the salary range for this position?”
Employer: “What is your salary history?”
(Here are additional responses to this question.) Politely shift the conversation toward your future salary expectations rather than your past earnings.
You can say something like, “While I appreciate the question, I believe my previous salary may not accurately reflect the market value for this position. I am more interested in discussing the value I can bring to the role and the salary range you have in mind for this position.”Here is another option:
You: “My salary has increased steadily. I can give you specific figures if necessary, but it would take me some time to figure it out.”
Employer: “What did you make in your last position?”
Here are a few options for how you can answer: Politely deflect the question and emphasize your focus on the current opportunity.
“I’m seeking a salary that aligns with my skills and the current market value for this role. Could you share the budgeted salary range for this position?”You: If pressed to answer, you can say, “While I’d prefer to discuss the specific requirements of this role first, based on my research and experience, I’m targeting a salary in the range of $X to $Y.”
You: You can politely decline, saying, “I hope you understand, but I prefer to keep my past salary information confidential. However, I am very interested in this position and confident we can agree on a mutually beneficial compensation package.”
You: If you have a lower salary working for a non-profit, you could say, “My salary was approximately $_____ (per hour or year, whichever is more appropriate for the position). I was working at a non-profit organization that is dependent on donor support. My labor market research indicates that the typical range for this type of position is approximately $____ to $____.” (You can add a question such as, “What is the salary range for the position in this company?”)
Employer: “Would you be willing to take less money?”
You: “If you and I feel I’m a good fit for this position, we can agree on an appropriate compensation package.”
Employer: “What is the salary you are seeking?”
You: (Option 1: Ask the employer to state a range first): “I am looking for a salary that is appropriate for the level of skill and experience that I would bring to the job. What is the salary range for this position?”
You: (Option 2: Give a direct answer that allows room for negotiation): “Mr. Employer, depending on the company, the job, and the responsibilities of the position, I’m looking for a salary range between $65,000 and $75,000.” What is the salary range for this position?”
4. Negotiate an appropriate salary.
Once you are given a firm job offer, and the company has offered you a specific salary amount, if needed, you can negotiate. For example, if the offer is $60,000 per year, and based on your market research, a more appropriate salary is $70,000 per year, this is a suitable time to negotiate.
It is essential to negotiate with questions, not ultimatums. For example, you could state, “Mr. Employer, I appreciate your job offer. I am excited about the duties of the job. The company seems to be a good fit for me, and I believe you and I could work well together. Based on my research and experience, I’m targeting a salary of $70,000 to $75,000 annually. Would you be willing to come up to $70,000 per year?”
The employer may say, “Yes, we can do that.” If this happens, you can add several thousand dollars to your starting salary by conducting salary research and asking powerful questions.
The employer may also say, “We can’t do $70,000, but we could do $65,000.” If this occurs, you could say, “I appreciate your flexibility and willingness to work with me on this. I will carefully consider your offer of $65,000.”
You could say, “I understand budget constraints, and I’m open to finding a solution that works for both of us. Can we explore other aspects of the compensation package or discuss performance-based incentives?”
Asking this question may lead to negotiating the length of vacation, insurance, or other incentives.
The employer may also say, “No, I’m sorry, we can only pay $60,000.” If this occurs, you are still in a position to accept the job if you so desire.
You can also say, “I appreciate your offer. I am excited about the opportunity to be a part of your team. I have flexibility with my salary and would like to accept your offer of $65,000.”
You can then add, “Mr. Employer, after a six-month review of my work, would we be able to revisit my salary as I prove my value and contribution to the team?”
5. Other benefits (vacations, insurance, etc.) may also be negotiable.
When analyzing an offer, consider the overall compensation package. If you have had several weeks of vacation time, you could, for example, ask that the company match the vacation time.
6. Getting a salary increase before you accept a job is easier than after.
Your negotiating power is strongest when an employer wants to hire you until you accept the position. Do your negotiating within that window of time.
7. Practice answering salary questions and negotiating with friends or family members.
Like any new skill, it will seem awkward at first. However, you can learn to negotiate like a pro and earn a thousand dollars a minute with some practice.
Summary
It has been said, “If you don’t ask, you don’t get.” It is amazing what can happen when you learn to ask questions. Asking questions could add several thousand dollars to your salary.