Effective Strategies for Salary Negotiation

Salary Negotiation - StartupStorey.com

Everything is negotiable. But be prepared to hear “no” and decide when you are and aren’t okay with that. Salary negotiation is one area where most people need to work on. 

We previously wrote an article, How to Ace Job Interviews Like a Pro, and received comments on how to negotiate salaries.

It’s your job to do the research for your particular position and it’s even more important for you to do your research on the company itself.

 

Salary Negotiation depends on the size of your Company.

Compensation is only one of several possible items that are up for negotiation. However, some companies will have less flexibility than others to make changes to an offer letter.

Some large companies in particular are generally going to be far less flexible in areas like benefits and vacation time because these are things built into the corporate structure of an egalitarian society.

Large companies are typically less likely to be able to make changes than smaller companies. For large firms, salary and bonus are the easiest things to move around and perhaps the only moving parts of an offer.

When negotiating with a smaller company, there are several things you may be able to negotiate.

Smaller firms may find it easier to give you extra vacation days, flexible schedules, remote work options, a more attractive job title, or perhaps a handful of other items that might make a job appealing.

Salary Negotiation - StartupStorey.com

What are your main motivations to negotiate your salary?

Try to find out what drives your motivations for a pay raise. If it’s primarily money, that will usually be the focus of negotiation.

For some it might be learning, where you might be able to get a training or conference budget provided to the employee. If work-life balance is a motivator, we’ll go for more time off or less required time in the office.

Think about what your main motivators are, and when negotiating try to maximize those items.

The following things are the most negotiable in order of most flexible to least:

  • Work perks like flexible hours, working from home, modified work schedule
  • Sign on bonus
  • Equity
  • Salary
  • Bonus, Vacation, Benefits
  • Title

 

Get Another Offer

The only thing better than getting another offer is…GET TWO MORE OFFERS!

There is absolutely nothing more powerful than having multiple offers.

Generally, people are followers, and when the hiring manager of a company sees that a) other companies want and value you and b) that you can easily walk away from their offer – they tend to want you even more and will raise their offer to be competitive.

It is kind of like an auction – when done right.

Barring other offers, or in addition to…I would recommend following these simple steps:

 

Do your research on what your worth is

Take a look at Glassdoor. Check Reddit. Ask some colleagues in the space. Do not just look at the hiring company, look at all their competitors too.

Research the industry, the company, the job.  How big is the pie (the industry), what slice of the pie does this company own (market share)?  What is this company desperately trying to grow?  

How does this job help them achieve their growth?  How critical is this job for the company?  For the industry?  What are the items that is negotiable within the job?  Salary, benefits, vacation, office vs cubicle, personal chef…what?  

If you don’t understand what is negotiable, you cannot negotiate well.

 

Identify Leverage

If this is a high demand job and is critical to the future of this company – you have more leverage.  

If it is a job that has plenty of candidates and needed, but not important to the company – you have less leverage and the company has more.  At this point, is there a way you can create leverage?

 

Use leverage – be tactful but not naive.  

If you have a high demand job, a competitive offer from another company can work to your advantage.  I was called by a “headhunter” is definitely a leverage squeezing tactic.

 

Use anchoring to your advantage

It doesn’t matter who gives the first number.  In fact, you are better giving it than they do.  How?  Check out the salary range of the job.  

Then, look at the top paying people.  So if the salary range for your job, experience level and competence is $70,000-$90,000, it is worth mentioning that you have a friend who makes $90,000.  

Anchor them to the higher number. Drop it off tactfully and hesitantly, but get it in the conversation.

Salary Negotiation - StartupStorey.com

Know when to stop negotiating

If the range is $70K-$90K and you got the a salary of $100,000 offer with all the benefits, don’t push for more negotiation on salary!  

Leave salary alone.  

In fact, your sole focus at that point should be to refocus on future.  What is the next promotion?  What kind of skills and mentors will you need to get there?  Ask for mentors, ask for reviews based on those skills sets.

 

Be a gracious winner or loser.  

Negotiations is a poker table.  Sometimes you win, sometimes you lose.  But you often come back to the table so don’t pound on the table and tick the players off.  Say “I look forward to starting” or “not at this time”.  Keep your cool at all times.

 

Understand what the hiring company values in this role and how you fit those value:

In your interviews, listen carefully as to what the hiring company is really looking for, what they really value.

Ask plenty of questions during your interview process to be sure you have clarity around this. From here, put together a list of how your unique set of skills and experiences can meet those values.

Have an open, balanced discussion about the offer with the hiring manager/recruiter about the offer, about what you research shows your worth, and engage them in helping you get there.

 

Talk to people who have held a similar position in the past.

They’ll be more likely to divulge salary info since it’s not currently relevant to them, and then you can use this to get an idea of where you stand.

Also check for a baseline salary range on payscale.com and glassdoor.com for jobs similar or the same as yours. This is also dependent to some degree on location as well, but it will give you a starting point for pay range.

Armed with this, I think you’re within your bounds to ask to discuss how they arrived at their compensation amount.

The hiring manager is likely to be willing to discuss this to some extent with you (worst they can say is no).

Then, if the amount is below average based on your research (talking to other people who have worked that position, glassdoor, payscale, etc.), you can discuss whether your performance was at or above average and negotiate for a commensurate salary based on your research.

Finally, if you get the feeling that the employer can’t or won’t negotiate the starting salary up, you should discuss other options such as extended vacation time, insurance, employer match on 401K, and other benefits.

In addition, be sure to indicate you are looking to increase your salary and work with the hiring manager to get specific criteria for what it would take to receive a raise, and possibly even what kind of a raise or promotion could be expected.

By specific, I mean if in X months you have achieved X, Y, and Z, then you will have a followup where you will discuss an increase in compensation/promotion.

All of this should reflect positively on you, showing that you take your work serious and are willing to work hard to move up. If the reaction you get to this is one of denying you future opportunities or refusing to discuss options of enticing you to work there that work for both of you in the long-run, the company probably isn’t going to provide you with many opportunities elsewhere either, and it’s time to start looking elsewhere rather than end up in a position where limited upward mobility.

Salary Negotiation - StartupStorey.com

Show respect throughout the process

Start by thanking your prospective employer for the offer. Ask for time to review it.

Compare the offer you received to your ideal offer. If the offer does not match your ideal offer you want to say something like, “I have reviewed your offer, based on my experience and the industry standard for this type of position, I feel that $XXX with YYY benefits is more in line with the value I will bring to the company. Will that work for you?”

Some people will ask for more money/benefits than they want because they are prepared to accept less. Others will ask for exactly what they want and respond to counter offers by restating their expectations.

You need to do what is most comfortable for you.

 

The key to successful negotiating is knowledge and practice.

Don’t start the process until you know what you need to maintain your lifestyle and what the company and/or their competitors offer people in the position you are being offered.

Spend time with a salary negotiation coach or a friend practicing what you will say and how you will respond to counter offers.

 

What is the worst mistake you can make in salary negotiations?

‘Give a man enough rope and he’ll hang himself’.

Standard CIA interview technique.

‘Just let them talk and they’ll undo themselves eventually or get caught out in their own lies/details’.

Think about your own life, and the people that you know. Those that yammer, those that are measured in their words, and those that say nothing at all.

Who’s the gossip? Who cannot be trusted? Who tells stories riddled with inconsistencies? Who is a man of talk but not action?

Most times, during interviews, people often commit suicide by talking themselves out of any potential increase in salary by revealing too much information.

Salary Negotiation - StartupStorey.com

From then on, once you’ve dug yourself a hole, you’re trying to climb your way out of darkness. And it’ll be a deep hole you’re in.

Practically:

  • Don’t whine. Please god don’t whine:
    • I have medical bills
    • Transport costs
    • Living costs
    • Am getting old
  • Don’t Demand:
    • I need this as a minimum
    • This is what I used to get
  • Do WAIT
    • Deflect
    • Defer
    • Let them MAKE THE FIRST MOVE

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Main Takeaways:

During the interview process

  • Do Your Research
  • Don’t Talk Turkey Too Early
  • Avoid the Salary Requirements Trap

At time of offer

  • Strike First
  • Don’t Commit Too Quickly
  • Make Them Jealous
  • Articulate Your Expectations
  • Negotiate Extras
  • Quantify Your Value and Performance

 

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